Trying to add a alpha/mask to a render target material

Hi guys,

So ive spent a while trying to figure this out myself and so far i have the following which is awesome

But what i really want is to change the circle cut out to a paint splat alpha just to make it more awesome the “brush” or material that paints the blue / red looks like this

But i have no idea where to plug it in ive tried several places and it kinda just places the image all over the environment rather then cut out the spot i am painting too.
Any help would be amazing or could i be going about the really the wrong way?