Expert Guide to Remnant Inventory and TV Advertising Strategies

Imagine having access to potentially premium ad slots at a fraction of the price—like going to the supermarket and finding your favorite luxury product at a massive discount.

That’s remnant advertising for you. And while it might seem very appealing, it doesn’t come without its downsides.

Here’s what you need to know about remnant advertising and whether it’s worth investing in it, particularly in the context of the upfront and scatter markets.

What is remnant advertising?

Remnant advertising refers to the advertising time slots or spaces on linear TV that have not been sold in advance in the Upfront market or in the scatter market. Typically, remnant advertising is sold and packaged as direct response ads -- infomercials, teleshopping, or other types of similar ads.

As a general rule, remnant advertising makes an interesting proposition due to lower costs and higher reach. However, it should not necessarily make for the bulk of your advertising, especially if you work with partners that focus on money-saving more than the quality of reach. In these cases, you might find your weekly clearings hit a ceiling very quickly – which means scaling becomes difficult (if not impossible).

Why remnant advertising exists

Essentially, remnant advertising provides both networks and advertisers an additional opportunity to buy/ sell ad slots, often last-minute and even more often at lower prices. Without remnant advertising, a lose-lose situation occurs:

• The networks miss a revenue opportunity
• And the brands miss the opportunity to advertise at a reduced price and generate lucrative sales

For this sale to happen on short notice, brands must partner with an ad-buying platform or agency that can facilitate the transaction and execute smoothly and promptly. They must act as liaisons, with access to a large inventory of remnant advertising that gives the brand the most varied opportunity to place last-minute ads.

Remnant advertising pros

There are significant advantages to remnant advertising:

• It can come at a reduced price (most often)
• It can sometimes include premium inventory or placements
• It can help fill in gaps in a brand's overall media strategy
• It can be flexible and it can be a fast way to put your message out there
• It allows brands to test new markets or audiences without committing to long-term contracts or high costs

If done right, remnant advertising can be a good addition to your advertising strategy. Taking a 360-degree, holistic view of the entire landscape of offerings is critical to weighing your options and ensuring your ad is effective and resonates with results.

Remnant advertising cons

One risk with remnant advertising is availability of spots. During high-demand advertising periods, all the available slots may be consumed by upfront and scatter buys, leaving opportunities scarce or non-existent for remnant inventory players.

The solution to this competition is for the advertiser to plan to participate in a mix of ad-buying strategies (i.e. don’t exclusively buy in the remnant or direct response market) and to monitor ad-buying timelines and clearance rates to calibrate their participation in the remnant market. Regardless of whether a brand buys in scatter or remnant, it is important for them to work with a trusted ad-buying platform or agency whose breadth of network relationships and ability to negotiate on behalf of the client gives the brand the best bang for their buck and ensures placement.

Of course, in periods of low demand, when the network isn’t able to sell a particular ad slot, the time must still be filled. Often, a “promo” will be aired when empty slots occur. These ads are self-promotional and usually promote a show from the network or the network family.

What is a remnant inventory?

In most of the digital world, remnant inventory is a term used in media and advertising to describe unsold ad space or time slots available for purchase at a discounted rate.

In the TV world, remnant inventory refers to inventory that remains available after units are allocated to upfront and scatter commitments are considered.TV advertising is based on scheduling, so remnant inventory from week 2 may be crowded out by higher demand from advertisers buying Scatter from week 1 onward.

What happens to remnant ad inventory

Remnant inventory can be addressed in two main ways:

As a network, you can choose to air a very low CPM ad from a remnant buyer (the lower CPMs are because networks don’t give any guarantees to advertisers that their ad will air – which can be problematic for advertisers who are looking for scale)

• You can run a promo ad, where you promote other shows in their network, a related

Premium vs. remnant inventory

Premium inventory refers to the best ad time or space offerings reserved in advance for the highest-paying brands. Essentially, it’s the opposite of remnant inventory. This could be the ad slots scheduled around the biggest event of the year (such as the Super Bowl) or a popular TV show, where advertisers are willing to pay top dollar for prime placement in front of a large audience.

Furthermore, premium inventory typically comes at a premium cost and is bought during the upfront process. There are benefits to that, but for many brands, it might not be very accessible. It’s also important to note that significant amounts of premium inventory are available in the scatter market.

Whether to go for premium or remnant inventory can be debated. Premium inventory purchased in the upfront requires a lot of commitment, comes with plenty of risk, and is as inflexible as it can get. Remnant, on the other hand, is flexible but unpredictable and even downright fickle (your ads may not even run.) Furthermore, it may be aligned with smaller, less-recognized shows. Many advertisers who prefer the certainty of upfronts and the brand cache of premium but the flexibility and lower costs of remnant opt for the middle ground of buying premium (and less-premium) inventory in the scatter market. There are several situations where remnant makes sense, such as:

• If your CTV or linear TV ads strategy didn’t align with Upfront offerings and you’d rather take a more timely approach to placing your ad and don’t care about whether your ad runs or not
• If your ad is time-sensitive, such as based on a holiday sale, for example, you can either buy inventory in the scatter market or buy remnant inventory in the direct response market, but you accept the risk of the ad not running at all)
• If your marketing budget is smaller, unpredictable, and sporadic, remnant inventory may be your best option, though don’t count out scatter buys
• Or if you find that you have unspent marketing budget (which Finance often dictates as use-it-or-lose-it before the fiscal year ends), those marketing dollars don’t have to go to waste – they can go to either scatter or remnant.

If neither Upfront nor remnant suits you, consider the scatter market. Sometimes, this is less expensive than Upfront, allows you more flexibility, and still comes with lower levels of risk and more scalability.

So...should you buy remnant ads?

The short answer is yes if there is weak ad demand in the market, and you care purely about maximizing ROI and flexibility in your advertising strategy but don’t care about scaling spend to reach a wider percentage of your strategic audience. The answer is no if there is strong ad demand in the market or if you care about brand advertising or scaling growth through advertising rather than direct response.

Generally, though, don't put all your eggs into the remnant basket—a well-rounded ad strategy should incorporate upfront, scatter, and remnant inventory accessed across Upfront, scatter, or direct response markets to effectively reach your target audience.

Do note that, in TV advertising, remnant inventory can occasionally be just as premium as inventory bought on the Upfront or scatter market. In (digital) banner advertising, remnant inventory is not always the best quality – but in TV, it can, theoretically, be just as good as more expensive ad slots, especially during periods of weak ad demand.

The downsides of remnant are not related so much to the premium appeal of the spots, but the lack of security (i.e., you don’t know if your ad will run) and the audience your ad might be shown to (which may or may not be a good fit for your business.) If you are familiar with publisher waterfalls in the digital world, remnant is like being at the bottom end of the waterfall, slightly above house ads.

Since our digital-first readers may be more familiar with the concept of remnant in the digital world but not the TV world, we put together the following table to clarify:

All in all, your advertising strategy should not feel like a slot machine but a well-researched, data-driven plan that takes advantage of all available opportunities. With the right planning and partnership, remnant advertising can be an extremely effective tool in your marketing arsenal. It's just that it's rarely a successful stand-alone approach and often leads to plateaus in the long term, which end up disappointing growth-oriented marketers.

Simulmedia does not participate in buying ads on the remnant market. We do, however, participate heavily in the scatter market and can complement your partners for remnant and direct response buys. As mentioned before, the scatter market might just be the perfect middle-ground solution between Upfront and remnant – and if you choose to work with Simulmedia’s’s TV+® cross-channel TV planning and buying platform, you can reap all of the benefits of buying ads on the scatter market (low-cost, efficiency, good reach, flexibility). Plus, we also offer clients guaranteed impressions on your strategic audience – not just basic age and gender, to ensure the right number of right people see your ads.