BVAT™- Business Value of Advertising Technology™

The following are 12 Business Value Indicators (BVIs) that can be mapped from digital advertising technology to advertiser profit centers. To successfully leverage these opportunities is to leap ahead of competitors using the modern speed, agility, and accountability that is the inherent digital advantage. 

Direct Income

Impacting Direct Income is the most commonly known and used business value indicator. This is the typical return on investment (ROI) calculation that can have its own various vernacular in digital advertising such as CPA and ROAS.

Calculation:
total income generated by the sale of a product or service

Cross-Selling

Establish a captured audience of past buyers and then offer them additional products and services. This is when the additional offerings are in a similar line of business as the original.

Calculation:
(additional volume)
x
(average price) 

Optimize
Existing Markets

Ability to monitor your market share compared to competitors, build awareness of new entrants and their impact, then decide on whether to go after additional market share and / or to drive out competitors by force or by cunningness.

Calculation:
(additional volume)
x
(average price)

Days of Inventory

Increasing inventory turnover is a top priority for maintaining various flows in business. The business intelligence insights gleaned from digital ads and sales helps with planning inventory optimizations for maximum churn.

Calculation:
(number of fewer days) 
x
(value per day)
x
(average cost of capital)

Risk Avoidance

Minimizing costly risks can materialize in several ways in the digital realm. Whether it is by testing a market before building up inventory or by having automation that monitors runaway liabilities and cuts them off at predefined parameters.

Calculation:
(value of risk)
x
(probability of occurrence)

Error Reduction

Errors lead to waste. Expert digital tech can enable ongoing real time monitoring of efforts and flag any errors in the systems before they can become costly burdens. This digital advantage has a compounding effect over time that can yield staggering results.

Calculation:
(value of loss due
to errors)
x
(probability of occurrence)

Headcount Reduction / Avoidance

Reducing or avoiding human resource requirements or absorbing business growth without growing headcount is not only possible but considered best practice because of the level specialization necessary for top tier success in digital ad tech.

Calculation:
 (number of headcount reduced or avoided)
x
(average loaded rate for geo and position)

Process Automation / Streamlining

Manual tasks can be cumbersome, time consuming, and error prone. They can also get lost in the shuffle with loss of institutionalized knowledge caused by changes in staff. Leveraging ad tech to minimize and automate demand side manual processes improves overall results and customer experience.

Calculation:
(increased volume)
x
(average selling price)

Days of Receivable

Leveraging digital tech to enable receipt of payments faster, or instantaneously, and minimizing the various costs of waiting for payment such as discounts for early payments, collection efforts, or losses due to unpaid receivables.

Calculation:
(dollar value
of receivables)
x
(days of receivables removed)
x
(average cost of capital)

Materials Discounts

Leveraging digital ad tech to predict demand slump periods and using that information to strategically negotiate discounts with suppliers of materials. This concept can also be applied to situations when demand experiences peaks and valleys for perishable inventory that can be negotiated down during valleys and marked up during peaks.

Calculation:
(former pricing)
-
 (current pricing)