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The term “advertising inventory” can be a little confusing, as it refers to a concept of space or individual slots, rather than tangible items. While it previously meant the pages offered in print publications, over time, it has come to almost exclusively refer to available slots in digital advertising.
Digital advertising inventory is the amount of internet advertising space a publisher is making available for purchase by advertisers. These opportunities exist in multiple formats such as desktop websites, mobile apps and websites, videos and video ads, and audio ads. Here, I’ll explain what this all means for advertisers and publishers, and how to make the most of ad inventory when it comes to optimizing campaign performance.
Defining Inventory in Digital Advertising
Who Owns and Manages Digital Advertising Inventory?
Ad publishers own and manage digital advertising inventory, and it is theirs to sell to any chosen buyers. In the context of digital advertising, the ad inventory is essentially a publisher’s property, or their personal shop. Think of it as how a grocery store owner gets to choose which pantry items get featured on their shelves, by making business deals with various product suppliers and selecting what goes on top, what goes on the bottom and middle shelves, and what might get displayed right near the checkout line.
Why Is Understanding Inventory Crucial for Both Advertisers and Publishers?
Publishers need to know how much ad inventory they have and how much it’s worth, so they can sell as much of it as possible to the highest bidder. Marketers need to know how much quality ad inventory they can afford, and where their advertising dollars will be most effective, as this will determine the avenues they have for sharing their campaign messaging and reaching consumers in the smartest ways possible.
Types of Digital Advertising Inventory
What Is Display Advertising Inventory?
Display advertising inventory refers to the space a publisher can sell an advertiser for promoting display ads such as banners, interactive ads, animations, and other visual formats.
What Is Video Advertising Inventory (Pre-Roll, Mid-Roll, Post-Roll)?
Video advertising can exist as pre-roll, mid-roll, and post-roll. Pre-roll ads appear before the video content a viewer has set up to watch. A mid-roll ad is shown during the chosen video, with the video action paused during the ad. Both pre-roll and mid-roll ads have decent chances of at least being partially watched, as the viewer is unlikely to get up and leave while watching a video they chose.
A post-roll ad is shown after the selected video has run its course. Post-roll ads can be a risk, as the user doesn’t have a particular reason to stay if they’re finished watching a video. However, they can sometimes work, especially if the viewer is sticking around for the next video in the queue.
What Is Native Advertising Inventory?
Native advertising inventory refers to the ads that blend organically with a platform’s content, such as sponsored content or in-feed advertisements on social platforms. These kinds of ads can be effective as they don’t shout “ad” to the viewer and can feel like a natural part of the user’s experience on the site or app.
What Is Audio Advertising Inventory?
Audio advertising inventory is the amount of ad space available during audio presentations such as digital radio, streaming music, or podcasts.
What Is Connected TV (CTV) Advertising Inventory?
CTV advertising inventory is the available space for advertisers to show their ads on connected TV, which is a device showing content that is delivered via the internet. This includes smart TVs that stream from platforms like Netflix, as well as Roku and gaming consoles.
What Is Out-Of-Home (OOH) Digital Advertising Inventory?
Out-of-home (OOH) digital advertising inventory is the space available on screens for advertisers to get their messaging to consumers in public. These screens might include digital billboards or interactive displays in public spaces such as transit hubs and shopping malls.
How Inventory Is Bought and Sold
What Is Programmatic Advertising and How Does It Involve Inventory?
Programmatic advertising allows advertisers to buy inventory using software that speeds up and automates the bidding and purchasing experience. The software uses algorithms based on data and targeting goals, with the aim of buying inventory that will help advertisers reach the right viewers at the right time for the best prices.
What Are Ad Exchanges and How Do They Facilitate Inventory Transactions?
An ad exchange is a real-time marketplace where publishers and advertisers sell and buy ad space. The exchanges facilitate inventory transactions by serving as the digital forum where these transactions take place.
What Are Supply-Side Platforms (SSPs) and Their Role in Inventory Management?
Publishers use supply-side platforms to manage their inventory and sell to the demand side. The SSP helps publishers connect with potential buyers such as advertisers looking for space to put their ads. As part of programmatic advertising, an SSP facilitates real-time bidding and automated auctions, managing inventory as it gets sold or made available. Without the technology used in programmatic ad-buying, marketers and publishers would engage in direct buys, i.e., the deals would be done by human beings making their own informed choices based on their observations and experiences.
What Are Demand-Side Platforms (DSPs) and How Do They Access Inventory?
A demand-side platform helps advertisers purchase ad space automatically in real-time from publishers on the supply side. It uses data to aid advertisers in selecting ad space based on audience targeting and algorithms. It is the other side of the programmatic advertising ecosystem, in relation to an SSP.
Factors Influencing the Value of Inventory
How Does Website Traffic and Audience Size Affect Inventory Value?
Website traffic and audience size can have a large impact on inventory value. For example, a fledgling website with barely any traffic and a small audience can’t demand the same price as a website with a wide and dedicated fan base and heavy viewership. When marketers buy ad inventory, they’re investing in how much traffic and viewership they expect for that particular moment on that particular day.
How Does Ad Placement and Viewability Impact Inventory Pricing?
It stands to reason that ad placement and viewability will affect inventory pricing. By making a display ad larger and easier to see, or placing an audio ad during a hit podcast, publishers are giving marketers’ advertisements more of a chance of reaching target audiences. By contrast, marketers seeking a smaller or less prominently featured ad can secure more budget-friendly (if perhaps less effective) inventory purchases.
How Does Seasonality and Demand Affect Inventory Prices?
During holidays and back-to-school seasons, there is a greater demand for ad space due to these being prime time for shopping. Advertisers are eager to pitch their sales and promotions, meaning many people are vying for space, which leads to higher pricing due to heavier demand but limited inventory on the publisher side.
How Does the Quality and Relevance of the Content Surrounding the Ad Space Influence Value?
The quality and relevance of the content surrounding the ad space are key factors in whether an advertiser will get good value from purchasing said ad space. If you buy a space on a site that nobody looks at or trusts, or your ad appears in a video that has no relation to the demographic you’re trying to reach, you haven’t gotten a good value and you won’t see much outcome from your expenditure. But, if you use your data and targeting strategies wisely when making a purchase, such as on the right website or the right podcast, you can help ensure a significant return on ad spend (ROAS) with a comparably small customer acquisition cost (CAC).
Managing and Optimizing Inventory
How Do Publishers Manage Their Ad Inventory to Maximize Revenue?
Publishers can use a variety of software programs to help them manage, track, and control their ad inventory. They can also use software to help analyze performance, automate optimization, schedule ad placements, and otherwise handle tasks large and small.
Along these lines, advertisers also want to maximize revenue by ensuring they are accessing high-quality and relevant inventory. They can do this by checking if a chosen platform can reach a brand’s target audience in a way that will maximize certain KPIs or other goals, and by comparing their success with one publisher versus another. They can also use AI-powered A/B testing to make direct comparisons in real time, and use data analytics to track what worked and what didn’t.
What Is Inventory Forecasting and Why Is It Important?
Ad inventory forecasting means estimating the amount of ad space that will be available in the future. It helps advertisers and publishers get a sense of what kind of pricing and bidding strategies they should line up, especially when it comes to holidays and other busy seasons. The data extracted from ad servers helps advertisers see what might be coming up, which can aid them in planning for upcoming busy or fallow times.
Key Takeaways
Ad inventory is the amount of space publishers have on hand to sell to advertisers. Advertisers then buy the space for a specific time, and showcase their ads on the publisher’s platform. Bidding can be handled programmatically or via human decision-makers. It’s important for advertisers to buy from publishers that can help them reach the right audience at the right time and in the right way, in order to maximize their ad spend.
Frequently Asked Questions (FAQs)
What is the difference between guaranteed and non-guaranteed inventory?
Guaranteed inventory is reserved for a specific buyer at a specific price, whereas non-guaranteed inventory is available to all buyers who are willing to compete for it.
What is remnant inventory?
Remnant inventory is inventory that a publisher has not yet been able to sell to an advertiser, so they offer it at a discounted price.
How does header bidding impact ad inventory?
Header bidding, also known as pre-bidding or advance bidding, allows multiple DSPs to compete for high-demand inventory on multiple exchanges before an auction occurs. This generally leads to higher pricing for the ad inventory, meaning higher costs for advertisers and higher revenue for publishers.
What are private marketplaces (PMPs) and how do they relate to inventory?
A private marketplace is an auction where only advertisers selected by the publisher can bid on the advertising inventory. It can benefit both sides, as advertisers get to bid on premium placement and publishers get to select who buys that placement (and also charge a hefty price for it).
