February 7, 2019
Tatari sat down with Darren Olive, VP of Video Ad Sales at Sony Crackle / PlayStation Vue to discuss their OTT and connected TV inventory as well as where things are headed next.
The television media-buying landscape is structured in a myriad of ways, so much so that advertisers can buy the same spot (or slices of that spot) from different angles, and at different pricing. In a previous post, we provided a broad overview of TV buy opportunities and in this post, we’re doing a deep-dive on a complex, yet popular, inventory slice oddly called “national-locals”.
Defining National and Local Spots
First, let’s set the context by explaining national vs local TV inventory, and how they get sold. A national airing is exactly what it says (i.e. the entire country watching the network will see the ad) and it is typically sold by the cable network or broadcaster directly. In contrast, a local airing is a spot sold in the network’s local break by a network affiliate or a multichannel video programming distributor (MVPD) such as Comcast.
An example of a national spot is an airing on Good Morning America, sold by ABC that airs everywhere in the same reel position. Local inventory is a spot during the same show, but only aired within a certain geography and during ABC’s local break. ABC7-KGO, an owned & operated ABC affiliate in the San Francisco Bay Area, may sell a spot on Good Morning America to a local car dealer. For broadcast television, it’s the local affiliate who will sell the inventory but for cable television, it’s the MVPD such as the cable provider that sells local inventory (e.g. Comcast Spotlight, Spectrum, Dish and DirecTV sell local spots on the Discovery Network). While a local spot is less expensive, it also delivers fewer impressions. Measured on a CPM basis, however, local TV airings are typically more expensive than their national equivalent (which, one can argue, makes sense given the geo-targeting).
A national-local is a spot that is purchased to air across the country during the local break timeslots, however, they might not be shown everywhere because local stations sold the timeslot to someone else and ran that commercial on top of the national spot.
Unlike a true national buy, the national-local airing is “covered up” by the local airings in the markets where MVPDs did sell the local spot. The exact coverage (and therefore, impressions) that the buyer of the national-local will get is unknown (although networks often do provide estimates); in return, a national-local airing has a lower price than its national counterpart (e.g. 30-70% discount when measured on CPM basis.
In streaming, no inventory is specifically labeled (or sold) as national-local inventory. However, the concept of a cover-up most definitely exists. For example, FuboTV will sell part of its inventory on a local basis (and at a premium); the remaining inventory is then sold as”run-of-site” or “run of network”. This is most similar to a national-local.
Why you should test National-local spots
The most obvious rationale for purchasing national-local inventory is price. The above mentioned CPM discount can offer great value considering that a national local can be meaningful in terms of impressions delivered (i.e. and still offering reach and scale). Advertisers may also choose to buy both nationals and national-local airings at the same time to boost capacity on a particular network (e.g. driving four of five airings within the same hour). Last but not least, national-locals can give TV advertisers access to airings which are otherwise too expensive to buy at a national level (e.g. airings during a sports game or major TV show). Success in (cheaper) national-locals then often set the stage for future (more expensive) national buys.