Taking Inventory
The Convoluted Path to Ad Placement
Once upon a time the ad game was straightforward. You had a product or service, you wanted widespread awareness, so you sought out hit shows or series to advertise on. You knew what networks those shows were on and BINGO, you had a deal.
Then came the digital/streaming revolution. Now the challenge is where do these hit shows or series live? What do I buy to guarantee the largest possible target audience? Who even has my audience?
Today’s fragmented market means that content is distributed literally everywhere so no wonder it’s difficult to understand who sells what and how much control you have in where your ad will pop up.
We’ll chart out where inventory lives with such fragmented distribution options as; MVPDs, vMVPDs, TV Network Apps, FAST Channels, and DTC Streaming Apps with Walled Gardens. BUT first, let's define the key players in the CTV ad supply chain:
Content Owner (Your "Network" or "Publisher"): The entity that owns the rights to the show, movie, or live sports event. (e.g., Disney, NBCUniversal, Warner Bros. Discovery, Paramount).
Streaming App / Service (Your "Service" or "Publisher"): The application the consumer opens to watch the content. This is the entity that is technically "publishing" the ad break. (e.g., Hulu, Peacock, Tubi, Pluto TV).
Device & Operating System (Your "Platform"): The hardware and underlying software that runs the streaming apps. This is the critical gatekeeper to the consumer. (e.g., Roku, Amazon Fire TV, Samsung Tizen OS, Google TV).
The inventory split is not standardized. It is determined by negotiated agreements between these players.
To add further confusion, the ad inventory split for MVPDs (traditional cable/satellite) and vMVPDs
(live streaming TV services) operate on a completely different model than the on-demand CTV apps outlined above.
The fundamental concept we need to understand is the long-standing National vs. Local Ad Inventory Split.
When you watch a national cable network like ESPN, HGTV, or TNT, the ad time during a program is already divided before it even reaches your provider.
National Inventory: Most of the ad time (typically 80-90%) is sold by the network itself (e.g., Disney sells ads for ESPN, Warner Bros. Discovery sells for TNT). These are the ads everyone in the country sees for brands like Coca-Cola, Ford, and Pfizer.
Local Inventory: As part of their carriage agreements (the deal that allows a provider to carry a network), the network gives a small portion of its ad time—typically 2 to 3 minutes per hour—to the distributor. This is the "local ad inventory."
The primary difference between MVPDs and vMVPDs is not how much local inventory they get, but how they can use it.
Virtual MVPDs inherit the exact same model. They also get those 2-3 minutes of local ad inventory per hour from the networks they carry. The game-changer is the technology they use to fill those slots.
The Model: Instead of just selling to a "local zone," vMVPDs use their digital infrastructure to turn their local inventory into addressable advertising.
Addressable Advertising: Because they are streaming services, vMVPDs can use user data (demographics, viewing habits, location, interests) to show different ads to different households within the same ad slot.
Example: You and your neighbor are both watching TNT live on YouTube TV. During a commercial break, in the same 2-minute local slot, you might see an ad for an SUV because you have been watching family content, while your neighbor, who has been watching financial news, sees an ad for an investment service.
This makes the inventory significantly more valuable because it delivers the precision of digital advertising within the premium, high-attention environment of live television.
Here’s a cheat sheet, of sorts, that may generate more headaches than it relieves but demonstrates the complexity of the landscape:
So, the question remains, with this convoluted distribution system where should I place my ad dollars? Here’s three tips to getting the most out of your investment:
1) Follow the audience, not just demographics BUT actual consumers. This is the key to effective and efficient media buying. No, it may not be the least expensive, BUT it is more targeted vs. the “spray and pray” approach of traditional linear TV. That doesn’t mean you have to eliminate Linear TV but unless you are buying LIVE sports, or high-profile live events, I would remove it from my consideration list.
2) Align with genres vs. specific shows. With on demand content distributed among so many platforms and players, you’ll be able to reach the largest audience by expanding the roster of shows that you appear on. That means looking at partners who “aggregate” the content and organize it in way that is user friendly. Even better, see if your brand can be part of the user-interface journey. Not only placing your ad on content that will amplify your message BUT helping viewers find that content.
3) Tap into the enormous power of device/platforms (Roku, Amazon, Samsung) Unless you are a top-tier "walled garden," you must give up a substantial portion of your ad inventory just to get your app in front of viewers. This has made the platforms major players in the ad sales market, competing directly with the services and networks that run on them.
With so much content available, in so many ways, the discerning advertisers will start demanding more metrics for success. Chart your own course for ad delivery, you certainly have enough options to create a bespoke experience.
As always I’d love to hear from the Media Nerd community, let me know your thoughts on the ad placement process and what you tips might make it an easier ride.