Ad Inventory is a revenue opportunity for any publisher, It is very important that how much ad inventory can be created from the content.
All these decisions are completely in the hands of the Publisher and impacts business revenue
Let’s take an example here, in this website Contains both content and Ad Inventory
Total inventory that can be created depends on two factors no of page views per page and no of Ad Spaces per page
Let’s assume that this page receives 1 million page views per month and for the total number of ad spaces, here three ad spaces
So, the total inventory is 3 million impressions. As a Publisher, one can book these millions of impressions with advertisers and earn revenue out of it \
Can you try how much ad inventory can be created for 1 million pageviews for each page for these 6 pages and Ad Invenotory
As there are 6 pages each having 3 adspaces each, so total inventory created is
Let’s calc: 6 Pages X 3 Ad spaces x 1 million page views = 18M Impressions
Let’s see some pictures of ads in Ad spaces in various media
Banner ads in websites
Ads in Youtube Inventory
Online games etc
Based on team size, audience, and quantity of pages, let’s divide Publishers into two types
One is Large Publishers and Another one is small Publishers.
Examples like NewYorktimes, timesofindia, youtube, times inc, facebook, spotify, primevideo.
These publishers have huge content with different categories and section with various formats like text, audio video etc
They can maintain their own sales team and other staff
They have millions of audience and daily visitors for their content
Can create a large pool of ad inventories
They can have direct relationships with top brands for their most of the premium inventory
They use Ad technology platforms which are higher cost than small publishers and leverage their offers
It comes under personal and small business with fewer staff members
They have limited resources for their publications
When compared to large publishers they have very little traffic
As they don’t have a sales team they connect via ad networks
This makes them to less revenue and runs ads on Run on Network
Advertisers are the Players in the ecosystem who are a source of money and ready to spend budget for their ad campaigns
To run those campaigns, they Purchase ad inventory from publishers and place their ads in ad spaces
These ad spaces become a source of Revenue for Publisher in Display advertising
Let’s assume that I’m a Publisher having my own website. Here is one of the page in the website with inventory of three ad spaces with different sizes
One ad space 1 is sold to advertiser for a one million impression with $1 CPM and I can make total of $1000 revenue out of it
Another Ad space with $2 CPM and I can make total of $2000
Leaderboard Ad space with $3 CPM and I can make total of $3000
From this single page I made $6000 revenue. This is just an example of showing how publishers earn revenue from ad spaces. Likewise, I can also sell other ad spaces from remaining spaces and make revenue out of it
Managing Publisher Ad Inventory
It is really exciting to know, as a publisher, I can earn money via ad inventories. But effectively managing inventory can bring more profits on the table. So, it is very important for any publisher to manage ad inventory, and Let’s discuss a few important points related to it.
We have already discussed that Ad Inventory is just like living space given for rent and every hour or day or month is a revenue opportunity for the owner of that space. For example, if you didn’t rent that living space or once you lost that time, then you lost revenue too. Hope you understood this example. Likewise, If you didn’t sell inventory, even here it is a loss of revenue opportunity. Once lost is lost cannot be taken back. So, publishers have to plan very well.
If your rented space is in a tourist place, you can charge per hour or per day basis at a high cost.
If it is in the city, you can charge on a monthly price at average cost. Also, with some other factors, you can sell it on a yearly basis at a reasonable price. Time, money and days are very much important here.
Similarly, Publishers have to manage inventory between time, Price, and volume of inventory. The flight range of inventory booked, Price at which it sold and volume of inventory for that particular time is very important.
If the number of people who want to buy the space suddenly increases, do you think it is possible to construct a new building all of a sudden? no right. It will take time depending on various factors like increasing demand day by day etc.
Likewise, If demand increases for any particular publisher all of a sudden, new inventory cannot be created, it will take time to plan because of technical and strategic reasons
If advertisers buy more inventory in bulk, as a publisher offering a better price to them not only benefits advertisers but also publishers can reduce the risk of having unsold inventory
inventory (accounting) the value of a firm’s current assets including raw materials and work in progress and finished goods More (Definitions, Synonyms, Translation)