Yield Management in commercial television

Our programming managers are primarily influenced by the desires of the viewer when they draw up the programme schedule. But…we also have other customers, namely the advertisers. Since they account for most of our income, we must take their wishes into account. Advertisers invest at certain times more than others, they aim for well-defined target groups and they want as big a response as possible to their advertising messages.

The optimisation of our programming schedule as a function of the potential turnover is called yield management. It is an exciting but very complex exercise that is of vital importance in conducting an effective policy. Since mid 2006 we at VMMa have been following up the direct return from the programming schedule. Using a complicated algorithm we have succeeded in attributing the advertising income to the (cost of the) individual programmes.

But our yield management goes further still, because we have also designed a second application, which allows us to simulate programming schedules in the future.

In the meantime we are well into the next phase of this project. Naturally, we have no intention of taking over the work of the programming managers, but plan to give them as much support as possible so that we can make more focused decisions.