I recently sat in on a roundtable forum discussing traffic hubbing. A majority of the companies present were from the TV industry and currently operating under a hub model. Very interesting. Lots of insight to be had. There were two key take-aways from that forum that I would like to share with you. First, a lot of the new hires are not experienced Traffic Managers. They are finding new skill sets and better service providers in employees that come from other industries such as accounting and data entry. Second … they are thriving and happy with their decision to change.
It’s a smart business decision and frankly it’s surprising that it has taken until now for companies to change the way they operate. As expressed in the forum, the transition will be difficult. Change is difficult. Tough decision will have to be made about the future of not only people, but the way processes are handled. But the reward is opportunity. An opportunity to transform the management of non-core processes and become more progressive, more collaborative and more flexible. This should be a concern for you because these companies have now gained a competitive advantage on you. They have realized an opportunity to work smarter and utilize savings in more productive ways. This could be hiring more sales people, top notch on air talent or investing more in digital technology. All things that are core and add value to your organization.
These companies are larger however. Perhaps the internal hubbing model works just fine if you have 25, 50 or 100+ stations. Larger companies can make it work because they have enough stations and people to scale it.
But what if you only have 15 stations? Or 5? At this level, there really is no room to scale and gain efficiencies or reduce costs. So how do smaller companies keep up and level the playing field? We believe the solution is in outsourced (private) traffic management.
Radio companies need to focus on what made them successful in the first place – the core business. Expending valuable time and energy managing transactions and non-core processes that could be handled by other specialist is not productive. For smaller groups looking for strategies to enhance their financial condition, greater economies of scale can be achieved through collaboration, shared services, or outsourcing.
It can be a scary word for business owners. It can conjure up images of losing control or a degradation in operations. In reality, the opposite is normally true. With outsourcing, there are contracts, reports, and personal contacts that can keep you informed of performance. And like any other business relationship, it’s not about being the biggest or cheapest … it is about reliability and trustworthiness.
Outsourcing has succeeded because of its ability to reduce risk, drive standardization, increase productivity, and improve reliability and predictability. In other words, its ability to industrialize an ever-increasing range of business activities.
Hubbing allows for cost reduction. Outsourcing provides even deeper savings, while retaining a larger workforce.
Both models drive operational efficiency. Outsourcing however, also allows for an increase in resource flexibility and access to talent without payroll burden.
Additionally, outsourcing presents an opportunity to access new technology and possible strategic partnerships that allow penetration into other markets. Maybe even foreign markets.
The role of the Traffic Manager is rapidly evolving. You not only have traditional advertising to execute, but now digital and mobile. Do you have the time, budget and resources to keep your traffic department up to level in training and development? It’s not just about scheduling spots anymore, but helping execution, customer service and business direction.
Hiring the right small number of people … together … only doing several things, but doing them great is key in driving your business and staying competitive. Why not partner with a company that offers deep domain knowledge in services that are core to your business … but not your core business? A company that can provide additional savings and additional employees. A company that emphasis on formal process and quantitative performance measures. A company that can dedicate 10% of their budget to the training and follow-up of employees. A company that becomes an extension of your team and is willing to customize your needs. Reliable and trustworthy.
If it can improve profitability and keep the same or better level of quality standards …. why not do it?