Increasing Advertising Revenues and Productivity at NBC

The Problem

The National Broadcasting Company, a subsidiary of General Electric, is primarily in the business of delivering audiences to advertisers. Every year, NBC sells 60% to 80% of its air-time inventory in a brief period lasting 2 to 3 weeks in late May. Traditionally, each sales plan was written by hand. The network sought to automate this system to better handle the tremendous amount of work required in this brief span. Automating this time-consuming process and better pricing the advertising inventory would require operations research expertise in optimization and revenue management.

The Analytics Solution

GE's corporate research and development center developed optimization-based sales systems to improve NBC's revenues and productivity, as well as its advertising sales processes. These systems removed bottlenecks caused by manual development of sales plans, helping NBC to respond quickly to client requests with sales plans that met their requirements. The systems also enabled NBC to make the most profitable use of its limited inventory of valuable advertising slots by estimating demands for airtime by show and week, and to schedule commercials.

The Value

Between 1996 and 2000, the systems increased revenues by over $200 million, improved sales-force productivity, reduced rework by over 80%, and improved customer satisfaction. As a result, they've become an integral and essential part of NBC's sales process.