Simple formula can help publishers develop annual ad revenue forecast

As the year rapidly comes to a close, many publishers, GM’s and ad directors at community newspapers are putting the final touches on their 2011 ad revenue and budget forecasts.  And undertaking the forecasting endeavor can be a challenging, even frustrating process at times.

Over the years, I have developed a quick and easy template that helps develop ad revenue goals which then flow easily into an overall annual ad revenue and budget forecast.

Using the following formula to double-check or create an advertising revenue and budget forecast will save lots of time and effort while motivating sales teams and serving as a compass when navigating a tough economic environment.

Ad revenue goals, whether monthly and/or quarterly and/or annually, are all developed at the same time that annual ad revenue and budget goals are developed. In other words, 12 monthly 2011 individual monthly ad revenue goals for each territory or account list actually flow into the development of the total 2011 ad revenue goal (department wide) and ad budget.

For best results, a forecast is developed for every month in a given sales territory or account list. Additional items could be added or substituted (such as web page hosting revenue). Ad revenue goal revisions should and will take place over the course of the year due to market changes that may occur.

Ideally, each month is initially developed by the salesperson and subsequently reviewed and jointly agreed upon by salesperson and manager. The participation of the sales staff in this process helps motivate the staff, inasmuch as their input is included as part of setting goals for their territory or account list. Here's the formula: