Stochastic Revenue Management Models For Media Broadcasting

An important challenge by media broadcasting companies is how to allocate limited advertising space between upfront contracts and the spot market, in order to maximize profits and meet contractual commitments. The authors stylized optimization models of airtime capacity planning and allocation across multiple clients under audience uncertainty. In a short term profit maximizing settings, the results suggests that broadcasting companies should prioritize upfront clients according to marginal revenue per contracted audience unit, also known as CPM(cost per thousand viewers).