It's payback time

Low ratings create a heavy make-good situation

The broadcast networks cumulatively are drawing 7 million fewer viewers a night in primetime during the May sweep than the November sweep, but media buyers said they don't believe the heavy make-good situation being created will negatively impact the fall season.

The buyers said an expected slowdown in ad demand in the summer as a result of the depressed economy will enable the networks to dole out all their owed audience deficiency units before the start of the fall season. That was not the case last summer, when heavy ad demand, coupled with a large amount of make-goods, tightened scatter pricing so much that at the start of the fall '07 season, ad units were 40%-50% higher than upfront prices.

Many of the broadcast networks' most popular shows are drawing 2 million-3 million fewer viewers than in November, when the WGA strike had just begun. For example, CBS' "CSI: Crime Scene Investigation" is averaging 17.5 million viewers, down 15% from 20.5 million in November; ABC's "Grey's Anatomy" is averaging 15.8 million viewers, off 22% from 19.4 million; and Fox's "House" is down 18% to 14.6 million. Some second-tier shows are down even more..

Overall, most numbers are way below audience-level guarantees set by the networks.

At the end of the 2006-07 TV season, the networks took advantage of summer demand and sold most of the available ad units at inflated prices rather than taking care of all of their ADU problems with advertisers. Make-goods subsequently were given out in the fourth quarter, tightening available inventory and perpetuating over-inflated pricing for TV scatter buys throughout this season.

"If the broadcast networks are smart, they will try to give out all of their make-goods before the start of next season," said Donna Speciale, president of investment and activation at MediaVest.

Speciale said that with ratings showing double-digit declines for the second year in a row, media agencies continue to look at other options. That, combined with the softening economy, dictates that the last thing the nets should do is artificially inflate ad prices.

John Consoli is a reporter for Mediaweek.