Commentary

The Fragmentation Opportunity: Finding Hidden Inventory

Today, there are a many channels and devices that enable video consumption. How to address the audience fragmentation between them is a leading topic of conversation and debate within the advertising industry. 

Audience fragmentation is just the tip of the iceberg for media buyers operating in the cross-screen landscape. Inventory fragmentation is a parallel issue that arguably poses a greater challenge. As the video ecosystem broadens, buyers need to keep pace with its growth in order to effectively deliver cross-screen audience reach to advertisers.

However, considering the rapid rate of change, many media buyers do not fully understand where they can find valuable inventory at sufficient scale.

Understanding Inventory Fragmentation 

Particularly with regard to broadcast-quality video inventory, many buyers perceive a lack of scale outside of traditional TV, creating a stumbling block for those whose target audiences don’t index highly in that channel. Despite this perception, the real issue is more nuanced. It’s not that premium video inventory doesn’t exist at scale outside of TV.

Rather, there are pockets of “hidden inventory” dispersed across different suppliers, creating an illusion that scale is lacking when buyers just need help finding it. 

For example, let’s say you’re a buyer looking to buy against content from Media Owner A across multiple screens to reach the widest audience possible. Inventory is being dispersed across screens — and across different suppliers on each screen.

Many media owners develop contractual agreements with broadcasting groups, multichannel video programming distributors (vMVPDs) that serve as access points for their video or with different device providers that support streaming, dividing up their available inventory so that each party owns the rights to sell a portion of it.

This is a major contributing factor to the perceived lack of scale in connected TV, because a buyer who only goes to one vMVPD, device provider, or directly to the media owner would not see the total volume of inventory availableI. Inventory sold straight from the media owner may sell out quickly, further contributing to the belief that there’s just not enough to go around. 

All this notwithstanding, here are some tactics buyers can employ to access quality inventory at scale. 

Understanding OTT vs. OLV

OTT is often delivered via connected TV (CTV) devices, which may include smart TVs, set-top boxes, video game consoles, Apple TV, Roku, etc.  OLV refers to short-form video streamed primarily across desktop and mobile devices. They should not be used interchangeably.

OTT and OLV are often ranked and reported separately, so media buyers must take care not to base their purchase decisions for OTT inventory on a ranking system that only reports on OLV inventory, or vice versa. Very few media owners deliver high scale in both OTT and OLV, and those that do typically stick to their owned-and-operated channels monetized on a subscription basis.

Streamlining Skill Sets

In this fragmented landscape, media buyers may be overwhelmed at the prospect of connecting directly with each different supplier to reach audiences effectively. Conversely, as a media owner, it’s challenging to build a sales team with the skills to handle every different channel and type of buyer.

In these instances, both parties can benefit from aligning with a third party to help bridge the gaps in relationships and skill sets, thus transacting with maximum efficiency. 

By learning to work with inventory fragmentation rather than against it, media buyers can be empowered to allocate spend strategically rather than having to accept trade-offs in order to achieve scale. For instance, most buyers currently make decisions based on channel-level transparency.

It would, of course, be preferable to have more granular insights into the inventory, but buyers default to the next-best option because it allows them to scale their buys. This approach has helped to provide a proof-of-concept for CTV, allowing buyers to access a highly engaged, incremental audience that can no longer be reached through linear TV. 

Connecting with the fragmented suppliers of inventory on CTV will dissolve the illusion of lacking scale within the platform, allowing buyers to achieve greater precision with show-level targeting based on information passed in the bid stream.

Armed with this new level of transparency, buyers can optimize further to ensure competitive separation within the ad break and control over the frequency of messaging at the channel level and sometimes even based on the specific show or live streaming event.

The bottom line: a total video strategy requires a total video approach to buying; scale and precision don't need to be mutually exclusive. By understanding the availability of inventory across different access points and identifying the proper partners to help streamline the path, media buyers can access video-on-demand and live-streaming video from all major broadcasters and studios, complementing investments on linear TV or direct deals on connected TV. 

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