The Television Inventory Economy: Getting the Best Inventory for the Best Price

The Television Inventory Economy: Getting the Best Inventory for the Best Price

Often when advertisers work with us for their first television campaign, there’s a ton of great questions about just how we purchase TV inventory, and how it is exactly that we are getting them the most for their money. With Direct Response TV, you hear terms like “remnant”, “preemptable”, and “discount”, but does that mean your commercials will only air in late night, or that you’ll be in poorly rated, unheard of programs? Not necessarily! Keep reading to find out how you can air in the top-rated shows that everyone loves like The Walking Dead on AMC, for an average of 60% less than other advertisers are paying in the same program!

So how exactly is TV time sold, and what is this remnant thing?

Method #1: Upfront

You’ve likely heard of Upfronts, the very long standing traditional way that TV networks sell their inventory consisting of huge parties with celebrity appearance in New York. Behind the scenes at the upfronts, deals are made for advertisers to commit to purchase huge amounts of TV inventory for the coming year. While this is a great way to get efficient pricing on a massive amount of TV time for large advertisers, those starting out on TV typically require more flexibility (you don’t want to buy 2 million dollars’ worth of something you’ve never tested), and just don’t require the large scale of buys that it takes to get you into those back rooms at an upfront. These deals are pretty much always guaranteed to deliver a certain amount of rating points or impressions, again perfect for big brands with big goals.

Upfronts Pros:

  • Large scale guaranteed to run inventory, necessary for big brands with massive budgets
  • Efficient if you negotiate well, economies of scale can certainly be obtained when buying big chunks

Upfronts Cons:

  • Big commitments both in terms of time and dollars – deals are in the millions and run the course of the season or year

Method #2: Scatter

Scatter is the other way that brands requiring guaranteed impressions buy TV inventory. Scatter is basically just all the inventory that wasn’t sold at upfronts. Scatter inventory still includes top performing shows, live sports, or any other high-profile cable airings. Scatter typically doesn’t have minimums (in terms of dollars of length of commitment), which gives it a huge advantage compared to upfronts. On the flipside, scatter usually has the highest CPMs of all the TV purchase methods (translated, least efficient pricing).

Scatter Pros:

  • Typically, no minimums in terms of dollars or
  • Guaranteed impression or rating point delivery

Scatter Cons:

  • Usually non-cancellable, whatever you buy you are stuck with
  • Least efficient pricing

Method #3: Surplus

Surplus TV inventory is basically created when ratings are higher than expected on certain shows and channels, and Upfront and Scatter buys can deliver all the impressions they were contracted to faster than anticipated. That means there’s more TV advertising time that’s not promised to those Upfront and Scatter customers, and the TV networks must sell it to someone in a hurry! Enter the Direct Response TV inventory purchase method. While some direct response does come in the form of remnant “leftover” inventory, much of the discounted inventory available is in the best programs on the best networks, who have the surplus due to their excellent ratings.

Surplus Pros:

  • Zero commitment, usually booked on a 72-hour cancellation notice – this means if the program or network you’re running isn’t getting the results you want for your brand, you can back out at any time
  • No minimums, in terms of time or dollars – you could book one spot for one day if you felt like it
  • BEST price efficiency of any TV purchase method – CPMs as low as $2 on top tier cable networks
  • Ultimate flexibility in terms of cancellation, last minute additions, making it the perfect solution for ANY brand who wants to run an optimized and efficient TV campaign

Surplus Cons:

  • Not ideal for brands who wish to spend more than $8-$10 million per month as inventory is limited
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