Understanding Clearance and Pricing in Remnant TV Media Buying

Understanding the dynamics of clearance and pricing is essential for anyone involved in remnant TV media buying. These two concepts are intricately linked, and their interplay can significantly affect advertising strategies. This article will delve into the complexities of clearance, particularly the challenges associated with forecasting it accurately.

Defining Clearance in Media Buying

Clearance refers to the percentage of booked advertising inventory that actually gets aired on a network. Generally, advertisers who are willing to pay a higher rate for ad slots have a better chance of securing clearance, particularly in remnant TV markets. However, several factors can influence this outcome, making it essential to grasp the intricacies of clearance to optimize media buying efforts.

Key Factors Influencing Clearance

• Timing: Timing plays a crucial role in determining clearance rates. For instance, at the end of a broadcast quarter, available inventory tends to shrink, resulting in lower clearance rates. Conversely, clearance is usually higher at the start of a quarter. This pattern can also vary by network; for example, channels like HGTV and DIY often experience high demand for ad slots during the spring season. We will explore these seasonal patterns in more detail in a future article.
• Events: Major events, especially sporting events, can drastically reduce the availability of remnant inventory. A prime example is the recent Olympic Winter Games, during which advertisers found it nearly impossible to secure leftover slots. Additionally, unpredictable events, such as natural disasters, can lead to sudden spikes in viewership and competition for ad placements, as seen during Hurricanes Harvey and Irma in 2017.
• Competition: The level of competition among advertisers on the same network can significantly impact clearance as well. Networks often prefer not to saturate their programming with ads for similar products. For instance, if Leesa has secured a guaranteed ad spot, it would be challenging for Casper to find a remnant buy in the same ad break or program. This practice not only benefits viewers, who may find multiple ads for the same product repetitive, but it also serves the interests of advertisers who wish to avoid direct competition.
• Viewership: Interestingly, low viewership can negatively affect clearance. When a program underperforms, networks may scramble to deliver the promised impressions to advertisers, leading to the issuance of Audience Deficiency Units (ADUs). These make-good airings can deplete remaining remnant inventory, further lowering clearance rates.

Positive Influences on Clearance

It’s important to note that the same factors that can hinder clearance may also improve it. For instance, if an advertiser cancels a purchase, it creates a gap in the network’s inventory, potentially allowing for improved clearance even at lower price points. In many scenarios, networks may resort to last-minute sales to offload their inventory, resulting in both higher clearance and reduced pricing.

The Bigger Picture in Media Buying

In the realm of remnant media buying, it’s clear that pricing is not the sole consideration. Understanding clearance and how it interacts with pricing, along with the ability to predict outcomes based on various influencing factors, is equally vital. At Tatari, we meticulously monitor these elements year-round, leveraging analytics to enhance our clients’ media-buying strategies. Our advanced tools and analytics capabilities set us apart from traditional agencies that often boast about offering “better pricing.”

Engaging in effective media buying requires not only a grasp of pricing but also an understanding of the broader landscape of clearance and its underlying factors. This nuanced approach is what drives successful advertising strategies in today’s competitive market.