Why ad sales growth starts and ends with inventory management
More, more, more. This is the common mindset of ad sellers looking to grow their business. Seeking more advertisers, channels, and products is the obvious route to revenue. But, in a cruel twist of fate, it can actually lead to less efficiency, simplicity, and profitability. The reason? It all comes down to inventory management.
Each ad product brings its own billing nuances, costs, and delivery complexities. So adding products to an ad sales business amplifies all the repetitive day-to-day tasks involved in selling, booking, and planning inventory.
But inventory management doesn’t just dictate what’s available to sell. This central component of an ad sales operation touches everything surrounding pricing, cost-tracking, targeting, and activation. It connects the sales teams assembling proposals, the planning teams strategizing campaigns, and the ops teams trafficking ad placements downstream.
If an ad sales business doesn’t get inventory management and governance right, the consequences reverberate across the chain.
The leaky bucket of ad inventory management
Signs of ineffective ad inventory management can appear right from the start of the quote-to-cash lifecycle. Without clear, continuously up-to-date visibility of available inventory, ad sales teams can end up shooting from the hip when making proposals and planning decisions. This can include selling inventory that’s unavailable when multiple sellers claim the same inventory for the same period.
Manual error is also baked into the process. The handoffs between sellers, planners, and ops teams are the perfect opportunity for information to slip. Especially when those teams are trying to capture inventory management and cost-tracking information in spreadsheets, which aren’t easily shareable or updated across the organization.
Sooner or later, every inventory management issue bleeds into finance, putting major metrics at risk. If ad sellers can’t easily understand which inventory is available, sales velocity grinds to a halt. And if the cost of goods sold (COGS) is unclear, sellers can burn through budgets on inventory that doesn’t actually generate profit. Revenue can take a further hit if ‘make-goods’ and credit memos have to be issued as a result of a media plan underdelivering.
So without a robust inventory governance system, ad sellers are left with a leaky bucket. To fix the holes and successfully sell more inventory, ad sales businesses need a better way of managing all their disparate, complex product types.
Ad sales efficiency depends on a seamless inventory management solution
When you consolidate and standardize inventory management into one integrated platform, sales teams can sell more, planners can effectively manage what they sell, and ops teams can successfully push, deliver, report on, and ultimately bill for it.
An operating system for ad sales like AdSalesOS illustrates how this works.
At the heart of the platform is the product catalog, which pulls all your inventory management information into a centralized repository. Products might be sold, planned, and activated very differently. But an operating system for ad sales consolidates everything from an onsite display ad to a social extension ad into the same catalog, while still ensuring each product can have its own billing rules. And by setting rules and governance at the product level, billing issues and inconsistencies are caught or avoided altogether before they can reach finance.
Centralized inventory management software cuts the error-prone copying and pasting between tools, as well as all the spreadsheet-shuttling between stakeholders. The process immediately becomes more standardized, keeping everyone in the business consistently aligned on the same terms. And once it’s set up, the dynamic, templatized process automatically relays any campaign changes to downstream systems. Not only does that save the time-consuming hassle of daily management, it also means you only need to edit campaigns in one place, without the version-control nightmare of keeping various systems up to date.
This all adds up to huge benefits for sales speed and time to activation. Being able to bundle up all of these inventory offerings into different packages with robust pricing controls means you can sell multiple products at once, but with just one click of a button. Ad sellers can reinvest the time and effort recouped from box-checking and form-filling into strategic activities instead.
An inventory management solution drives smarter ad selling
Let’s turn now from the efficiency to the effectiveness of your ad sales operation. An operating system for ad sales fuels your teams with the insights and intelligence they need to manage inventory across today’s omnichannel landscape.
A solution like AdSalesOS features an internal COGS engine and rate cards that clearly show the costs associated with each type of inventory. The platform collates together all the information from your downstream systems around creative service fees, tech fees, audience extension fees, and the rest, to create a single source of truth with verified billable data. This helps ad sellers make more cost-effective decisions at the proposal stage, while finance teams can accurately invoice straight out of the tool without having to stitch together a bunch of information at the end.
The COGS management capabilities also help sellers easily identify higher-margin products. Together with historic data into product performance, they can build more effective campaigns, offer clients more predictable expectations, and uncover opportunities to upsell or tactically package premium inventory with placements that are harder to sell.
When it comes to yield management, sellers can see what type of inventory is available for the period they’re looking to sell it over. And if they run out of inventory during the campaign, the operating system allows them to fulfill the remaining delivery using offsite channels (served through a programmatic partner like The Trade Desk, for example), while keeping everything managed in the same connected system.
Inventory management isn’t a point solution; it’s the bedrock of your whole ad-selling operation. An operating system for ad sales gives you the level of integration to make that foundation as robust as possible. Minimizing overhead and maximizing the capabilities of your teams, you can finally do more by doing less.
