Then the containers are probably not Advertising Containers, or not recognized as those. You can check by looking at the XML (save as .mlp or copy to clipboard and paste into text editor) - if the XML says <PlaylistItem Class="Container" ...>, then something is wrong, It should be AdContainer.
Also make sure you have configured your advertising settings and hour templates like this:
In the Advertising Settings, make sure that “Always create container” is checked:
And in the hour template item, make sure that “Create a container if nore than one item” is unchecked:
If you have it the other way around, you will end up with regular containers instead of advertising containers (which carry additional hints about the hour and block number) - and Update Advertising will fail.