Traffic and Billing 101

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Traffic and Billing 101

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INTRODUCTION

In the broadcast radio industry, there are many departments all working with one another throughout the day to make sure that they get tomorrows broadcast ready by end of  business today. Sales, Traffic, Billing, Production, Programming and Automation.  Without playing favorites Traffic is the main hub of a wheel that all other departments work with, many times a day, to ensure each broadcast day is complete. The term "Traffic" refers to the flow of information between the sales and programming departments.  The traffic professional is a very important role and has the responsibility of making sure that both of these departments are merged into one cohesive product to produce the needed on air results and maximize revenue.

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TRAFFIC

Traffic is the scheduling of program material, for the broadcast day. Program Material consists of everything you hear except what the station plays as its format. This includes Commercials (paid, bonus and make goods), Public Service Announcements (PSAs), Promos, Sponsorships.  A commercial radio station sells airtime to its customers; directly and indirectly through agencies / possibly network affiliations. It is not unusual in a single hour for 18–20 minutes to be commercials. Traffic together with Sales aims to sell the available airtime ("avails") at the best possible rates. Traffic generates a daily log of programming elements such as commercials, features and public service announcements. The log defines when they are planned to be aired. The log will be used by the on-air operator who plays the commercials. A copy of the log after the fact is used for reconciliation to determine what aired. Typically, a broadcaster uses a broadcast management software system that allows for automation between departments. Some software systems are end-to-end and manage the whole spectrum of tasks required to broadcast a radio station, others specialize in specific areas, such as sales, programming, traffic, or automation for master control.

PROCESS

The traffic process begins when Sales enters into an agreement with a client to provide an advertising campaign for their business.  If the client is new to the radio station, the traffic manager will enter a new account for them setting up the billing information and the default parameters for the account such as conflict category (type of business), revenue categories and desired invoice type. Sales will then write a sales order (contract) that the traffic manager enters into the traffic software that gives the specifics of when the spots should air (days of the week, time blocks, length, rate, type of sponsorship, etc).  An identification number (cart  number) is assigned to each cut of audio associated with each client.  The traffic manager will apply the cart rotations to the sales order to ensure that the correct audio plays for the corresponding campaign. After the sales order and cart rotations are entered, the daily commercial logs can be assembled.  The traffic software program will attempt to place the spots according to the sales orders.  If the spots cannot be placed on the commercial logs within the specified parameters, the spots will not schedule or be "bumped".  The traffic professional  will need to edit the log manually to try to work in any spots that need to play according to their schedule by moving other spots around.  Much like working a puzzle.  After all "bumps" are worked in according to their schedule, the log can be locked and is ready to be merged into the automation system and played on air the next day. The building of invoices takes place on a daily basis as the previous days logs are reconciled.  The reconciliation process confirms if the commercials aired as they were scheduled.  If the commercials aired as scheduled, they are marked as ready to invoice.  If the commercials did not air as scheduled, they will be rescheduled ("made good") or deleted as indicated by talking to Sales.

  TYPICAL DAILY TASKS
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BILLING



Billing is the process in which the commercials aired move into the billing system and are invoiced to the client.  The process can be handled differently based upon the company's policy.  Some companies invoice daily, while others invoice monthly.  Some companies invoice based upon a calendar month, while others invoice based up a standard broadcast month, sometimes referred to as Final Sunday Billing as the last Sunday of the each month is the end of the broadcast month.

PROCESS

After all commercials for a sales order (contract) have been aired and reconciled, Billing enters/applies payments, makes any adjustments and applies Aging, then the contracts can be invoiced and sent to the client. In some cases Billing uses an external company to handle a lot of the aspects of bill collecting, these places are know as an EDI ClearingHouse. Billing collects payments, receipts of payments and checks and deposits them at the end of business day.

TYPICAL DAILY TASKS
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FAQ

Couldn't I just use "standard" accounting / billing software packages such as QuickBooks to do traffic and billing?

It is bordering on impossible to utilize standard accounting / billing software packages to operate traffic and billing tasks.  There are many reasons as to why this is the case, where most of them fall under the category of not understanding the specific problem domains faced within the broadcast industry. 

These include (but aren't limited to):