What is a video ad inventory?
Ad inventory refers to the amount of available ad space that a publisher can offer to advertisers. The term is most commonly seen in online advertising, including digital video. Examples of publishing platforms include websites (site banners, sidebars, etc.), streaming or on-demand video services (pre-roll ad spots, overlay ads, etc.), and so on. At the most basic level, the advertising industry operates through the sale and purchase of ad inventory on a variety of publishing platforms.
Using Ad Inventory
Calculating ad inventory value
Gauging ad inventory value can be a complicated process involving a variety of criteria, the individual weight of which can vary according to each advertiser’s needs and goals. In general, though, ad inventory value rises based on the amount of traffic or views that an advertiser can get from a particular publishing platform.
Page impressions, which refer to the number of users that see an ad, are a common metric used for estimating the worth of ad inventory. Advertising, after all, is all about reach and impact on as large and as receptive an audience as possible. Consequently, the more page impressions a publisher can deliver to an advertiser, the more money that publisher can demand for its available ad space.
There are other factors that can affect the valuation of particular units of ad inventory, such as:
- Number of ads in a particular page or content stream: the more ads there are, the more competition a potential advertiser will have for their target audience’s attention.
- Location of ad space: “Above the fold” spaces that are visible without any scrolling are prime real estate, for example, as are banner spots that viewers see immediately upon landing on a website.
- The demographics reached by a particular ad space: With more sophisticated tools for data gathering and analytics now available, publishers can offer targeted ad inventory that gives advertisers access to audiences for whom their ads will be most relevant (and most likely to be received well).
Ways of buying and selling ad inventory
There are several common methods used for buying and selling ad inventory, particularly for online advertising.
- Direct sale and guaranteed placement: This refers to a one-on-one deal between publisher and advertiser, where the advertiser pays a predetermined, fixed price to secure ad space from the publisher.
- Ad networks: Like a TV cable plan, this system involves bundling inventory from multiple sources and putting them up for sale as aggregated packages.
- Real-time bidding: This system involves advertisers placing bids on inventory as they’re made available by publishers in real time. The process takes place through platforms like third-party ad exchanges, which serve as intermediary marketplaces for advertisers and publishers.
Revenue models for ad inventory transactions
The actual costs that advertisers will pay depend on the revenue model in place for the transaction. Some common revenue models include:
- Charging based on the number of leads generated
- Charging per thousand page views or impressions
- Charging based on the number of clicks garnered