Inventory Media - An Opaque Term That Leaves Advertisers Confused

Media Transparency

Dec 13, 2023 | Philippe Dominois

Inventory Media - An Opaque Term That Leaves Advertisers Confused

I often get asked by advertisers what exactly Inventory Media is.

Many brands have heard the term used but don't fully grasp the implications or why it should be top of mind.

Here's the thing – agencies have been spinning tales about Inventory Media being this amazing thing for advertisers.

But let me tell you, it's not all rainbows and sunshine.

It's more like a tricky game where you need to watch your step.

And the real twist? Loads of brands are knee-deep in Inventory Media without a clue, and it's causing significant disruptions to their campaigns.

So, what's the deal with Inventory Media? Why should you be keeping a close eye on it?

Let's cut through the noise and get down to the nitty-gritty. It's time to uncover the real story behind Inventory Media and why it's time for advertisers to wise up and take action.

What is Inventory Media?

Inventory media, also known as proprietary media, refers to the media inventory and ad space that a media agency purchases using its own funds rather than buying directly on behalf of an advertiser.

The agency essentially acts as a principal and becomes the initial owner of the media.

The media agency then sells this media on to advertisers, often with a substantial markup, and with stringent no-audit clauses, ensuring that the media is not subject to external scrutiny.

 

The Potential Benefits for Advertisers

  • Lower cost - Agencies leverage their scale and relationships to negotiate cheaper inventory pricing compared to an advertiser's direct buy price. Agencies claim that these savings get passed through to their clients via reduced inventory media costs.
  • Last minute buy possible - For advertisers who require last-minute media purchases, inventory media provides a convenient solution as it has already been acquired by the media agency in advance.
  • Incremental reach - Proprietary pools offer access to inventory supplements that could boost campaign scale and amplification.

The Appeal for Media Agencies

There are a few key reasons why media agencies lean towards acquiring and selling inventory media:

  • Increased profit margins – By owning the media first, agencies can set their own prices and margins when selling to advertisers without disclosing actual costs paid.
  • Opportunity to retain rebates & incentives – AVBs, Cash rebates, volume bonuses, and other incentives offered by media vendors remain with the agency rather than being passed back to the client.
  • No audit rights - Advertisers are often left in the dark as agencies consistently reject the idea of making inventory media auditable, which raises concerns about its actual worth to advertisers.

The Pitfalls for Advertisers

However, while inventory media offers agencies clear financial upside, it presents several downsides for advertisers:

  • Lack of transparency – Agencies aren’t obligated to disclose information like actual media costs, agency volume bonuses, or discounts received. This opacity makes it impossible for brands to determine fair value.
  • Questionable cost savings – Agencies may claim cost savings for advertisers through inventory media, but these can involve less relevant media, potentially compromising the overall value and effectiveness of the campaign.
  • Limited control & oversight – Refusing client audits and evaluations limits advertisers’ ability to assess performance and true benefits of using inventory media.
  • Inventory bias – Agencies may push their own inventory over better performing or more suitable alternatives.

Conclusion & Recommendations

Many advertisers unknowingly purchase Inventory Media due to the inherent lack of transparency.

Sometimes, agencies may claim that Inventory Media offers more cost-effective options or is the only choice for late decision-making. However, these claims often lack substantial evidence.

At Abintus Consulting, we believe in empowering advertisers to navigate the complexities of Inventory Media.

Advertisers should be proactive in understanding their contracts and demanding transparency from their media agencies.

To make your life easier, we're throwing in a free assessment of your media agency contract.

Yep, you heard that right – it won't cost you a dime! Whether you're an advertiser in need, we've got you covered.

Head over to www.abintus.app, sign up for free, and let our experts evaluate your contract in just a few days.

Or if you're in a hurry, try our self-assessment tool and get results within minutes. It's time to take control and demand transparency from your media agency!

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Author Expertise and Experience:

Philippe Dominois is co-founder and CEO of Abintus Consulting, and Head Coach at the Abintus Academy. He has over 25 years of international media experience, having worked on the media agency side, client side, and media auditing side throughout his career. Philippe has authored hundreds of articles over the years that focus on media management best practices.

Media Auditing Guide: Click Here

Media Agency Pitch Management Guide: Click Here

Free Media Agency Contract Assessment: Click Here

Free Media Management Training for Advertisers: Click Here

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