The TV Ad Zone
By Ben Grossman -- Broadcasting & Cable, 12/9/2007 7:00:00 PM
Imagine, if you will, a time when broadcast networks end up quietly hoping that sales figures for their own advertisers drop.
Sound like something out of The Twilight Zone? That scenario, far-fetched as it may be, is one possible outcome if the writers' strike drags on for months.
Advertisers and networks are weighing options if the strike lowers audience levels to the point where pre-sold guarantees can't be met. The answer could be a mix of make-goods and even refunds. And the result could be a litmus test for the premiums network television generates going forward.
Last spring, advertisers spent more than $9 billion in the network upfront, but when the fall came around, the big networks didn't hold up their end of the bargain. And that was before the strike.
Viewership was down, and not just in the apples-to-oranges comparisons to last season. Audiences were below what advertisers had been guaranteed, even taking into account the expected drop due to the new C3 commercial ratings.
Unless the strike is settled quickly, we now face a first quarter devoid of many of the networks' biggest scripted guns. With audiences then expected to dip even more without new episodes of CSI, House and Grey's Anatomy, the advertisers will be getting that much less for their money.
By mid-January, we will start to see how much viewership for the strike-driven schedules is dropping off. That's when things may get dicey. “Mid-January is when it really could start to hit the fan,” one ad buyer told me.
The networks will have to work hard to keep ad dollars by trying to deliver eyeballs in other ways. They may use make-goods on their own air, but there is only so much room for that, especially as more inventory was sold in this year's upfront.
They may use make-goods on their cable networks, though that is obviously more of an option for an NBC and its diverse cable portfolio than for a CBS.
Beyond that, the networks will have to get creative, perhaps through online or credits for next season. “The networks will be squirming,” says another ad buyer. “There will be long nights coming up with concepts to give advertisers alternatives.”
If the strike drags on late into the season, and the networks are unable to deliver viewers when advertisers need them, the brands may want—and get—some money back, say both network and ad executives. That's when we should train an eye on a brand's sales figures. If you believe in the direct correlation between advertising and sales, network TV's advertising mettle will be tested right around then.
And what happens if a brand ends up with significantly fewer network television eyeballs than it had expected, but its sales figures don't take much of a beating? That would actually add trauma to an already nightmarish season for the networks. The situation is tenuous enough with viewers in the balance. And the strike is starting to threaten next season's development cycle (though as I recently pointed out, that is probably a good thing for this broken business model).
Network television has always been the biggest and easiest buy, but with a historic lack of true audience accountability, it has never been the most efficient. It proves the old axiom, “I know half of my advertising is wasted, I just don't know which half.” But if a drop in eyeballs doesn't hurt a brand's bottom line, ad executives might revolt and feel justified in questioning the premiums for network buys.
True, there are plenty of “ifs” in this scenario. And it's not going to happen tomorrow. But it's exactly what the networks can't have happen.
Imagine that, indeed: Networks privatley rooting for advertisers to struggle along with them. Perhaps that's not such a Rod Serling-inspired idea after all.
E-mail comments to email@example.com
You're a little late with your predictions. Makegoods and refunds have already happened.
NBC Rings Up Holiday Refunds
December 10, 2007
By John Consoli
NEW YORK NBC has quietly begun reimbursing advertisers for fourth-quarter prime-time ratings shortfalls, averaging about $500,000 per advertiser, according to media buyers, marking the first time in years a network has taken such a step to compensate marketers for ratings deficiencies.
Walter Abbott - 12/10/2007 11:58:00 PM EST
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