Revolutionizing Revenue Assurance: How Today’s Order Management Systems Tackle Forecasting

Digital Order Management Systems (OMS) were initially designed to automate tasks related to pushing and pulling data into ad servers and automating manual ad operations tasks.  Over their evolution of the last 20 years, their breadth and depth of features have exploded into the pre-sales world of media planning through billing and covering certain programmatic transactions.  Unfortunately, media companies are still struggling with revenue assurance and forecast accuracy issues, which the OMS should ultimately solve.  In this blog, we’ll dive deeper into these topics and how an OMS should solve them.

What is Revenue Assurance and Forecasting?

Revenue Assurance is about maximizing the revenue earned for what you’ve sold. In reality, this is a complex topic fraught with pitfalls, such as revenue leakage due to under-delivery, made goods, and lower-than-expected campaign profitability. Solving these issues can be the difference between making or exceeding revenue targets.

Forecasting is the process of predicting how much revenue can be recognized for a specific time period, such as a month, quarter, or year.  Unfortunately, answering a simple but important question such as “Will I hit our revenue or budget target for the month or quarter?” is often manually intensive and error-prone.  Media companies need to know their forecast not only by time period, including toggling between broadcast and standard calendars but by seller, team, geography, product, and gross and net amounts.

How should an OMS evolve to solve revenue assurance and forecasting problems?

Media companies considering their first OMS or questioning whether they have the right one should prioritize Revenue Assurance and Forecasting capabilities as must-haves to future-proof their business.

To maximize their Revenue Assurance, they look for the following capabilities:

1. Media Plan Profitability—The first step in ensuring campaign profitability is making sure media plans are designed with the right profit margins. This should be automated so that as planners or sellers build plans in their OMS, they know if they’re hitting the right margin targets both on a product and overall plan level. Automated approvals should streamline getting plans out quickly.
2. Actual IO Profitability—Once a media plan is sold, actual costs, such as production fees, off-network media fees, etc., should be visible. These fees can be dynamic, so having visibility to actuals and views on out-of-tolerance variances negatively impacting margins is critical to realizing proper profitability.
3. Under-delivery—often undelivered—falls into two buckets: insufficient supply or extensive over buffering. In either case, pacing and delivery fill visibility are critical to adjusting campaigns to make every impression count.

To improve forecast accuracy and visibility, media companies should look for the following capabilities:

1. Time-based revenue projections—OMSs need to evolve beyond trafficking orders to also provide revenue projections based on booked vs. actual delivery and their pacing. They should also factor in pipeline amounts to better predict total recognized revenue projects for any time period, such as a month, quarter, half, or year. It should provide views from the individual seller to the head of sales, by product, by advertiser, etc.
2. Gross and net revenue projections—To ensure real revenue assurance and profitability outcomes, revenue projections should support gross and net calculations. On the net side, they should incorporate both estimated costs for campaigns without actuals yet and actualized costs to provide the most accurate projection possible. They should also provide views from the individual seller to the head of sales by product, advertiser, campaign, etc.
3. Interactive Forecast Views - solving for visibility to maximize revenue assurance requires two capabilities - pre-built forecast views and custom views.  Pre-built views should satisfy the most common needs of sales, operations, and finance to see how they are tracking toward specific goals or targets for a time period.  It should also enable the creation of custom views tailored to each media company’s particular business needs so they can maximize revenue assurance.

Conclusion

Media companies can reliably operate their business using most commercial order management systems with various caveats. As media companies focus on profitable growth, it’s imperative they solve their revenue assurance issues or they won’t realize their financial goals. This is the new mandate for order management. OMSs must evolve to solve these issues with robust reporting and forecasting capabilities. It’s too costly and time-consuming for every media company to do this manually in Excel or attempt to build data warehouses that aren’t nimble enough to keep up with an ever-evolving digital advertising ecosystem.  

Contact us here to learn more about how Boostr can solve your revenue assurance issues with the only OMS that includes reporting and advanced forecasting.