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Remembering the Request for Proposal (RFP): How Negotiating Is Moving From Art to Science

July 9th, 2018   ||    by John R. Osborn   ||    No Comments

For many years, the request for proposal (RFP) was the primary tool for negotiating local TV buys. Now, as the buying process becomes automated, interconnected platforms with shiny new dashboards bring the speed and efficiency of digital technology to the process. What is gained and what is lost for buyers and sellers as negotiation enters the realm of science?

Negotiations done on a computer are no less interpersonal than when RFPs via fax and phone moved proposals to orders, except that the conversations are now strung together and stored in a common server file.

On top of that, the “analysis” part of analytics requires human thought, insights, ideas, and decision-making—often identified with artists. So while the industry embraces the efficiency and workflow improvements that automated platforms provide, the RFP process of the past actually transforms into a dynamic, interactive, and timely tool for today and the future. In the end, the art of buying local TV must strive to keep up with advancements in science and technology.

From Past to Present: Some Things Lost, Some Things Gained

Here are some of the changes that have occurred as a result of automation:

Before automation, the RFP kicked off a labor-intensive and time-consuming process.
Lost: A good part of the manual labor of creating, modifying, and tracking proposal spreadsheets, then agreeing on revisions
Gained: A streamlined process where all the changes and communications reside in one place, and can be referred to easily

Many times the buyer would request the information be laid out in a customized manner for easier comparisons.
Lost: The need to reorganize information for side-by-side comparison
Gained: A consistent way of viewing and comparing buy proposals, for buyers and sellers

Because local TV audiences were not guaranteed, both parties did and still need to agree on the source research data.
Lost: The need to check and double-check the viability of the other side’s numbers
Gained: The ability to quickly view estimated audience information from different studies and sources

Final payment depended on how much time the post-buy reconciliations took, what the standard payment terms were, and when an agency’s clients would approve and make payment (since agencies paid when clients paid them).
Lost: The excuses buyers could make for delayed payments
Gained: A more immediate flagging and faster resolution of discrepancies to accelerate the post-buy process

On the sell side, automated proposals or plans tap into the station’s real-time inventory system.
Lost: The need to put inventory on hold until the buyer responds and the seller can restore unwanted or unused inventory
Gained: Faster turnaround and restoration of inventory to avails system

Sellers can evaluate likely profitability of pricing decisions in a changing supply and demand marketplace through algorithms supporting the sell-side system. Buyers, too, can analyze historical trends to estimate when fair marketplace levels are obtained.
Lost: Regretted pricing decisions because of changes in marketplace conditions
Gained: Machine learning and flagging of changes that will impact an upcoming buy

As science opens new vistas for what can be done in a local TV buy, the art—the human mind, intuition, and creativity—must develop and grow along with the addition of tech tools, because an ad impression ought never be reduced to a mere commodity.

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