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BIAnalytix Tip Summary: Use of Audience Impacts to Forecast Revenue

Rather than use the unsold time to forecast potential revenue in the future, the unsold time can instead be expressed as a total of potential audience impacts (assuming 30 second spots) and this can then be multiplied by the market CPT to estimate a forecast of future revenue potential. Because this calculation weighs the unsold time by the projected audience delivery, the resulting forecast achieves higher accuracy by correctly weighting the unsold capacity by its value. Note that the market CPT can be substituted by the actual CPT already achieved by bookings and as a result further improve the accuracy of the forecast.

This example of a forecasting model is taken from a class of inventory analysis that quantifies what is being sold as the delivery of advertising “impressions” for a campaign rather than simply of the delivery of “time” for a campaign. Inventory analysis for this method of forecasting obviously requires and relies upon projection books of audience levels being prepared for future time periods.

BIAnalytix is a data warehouse and business intelligence system from Decentrix which includes all the advanced tools necessary for forecasts using audience impacts to forecast revenue and can include an unlimited number of audience projection books from your research department.

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