As buyers and sellers make plans for another upfront season, they face two issues that make it difficult for networks to increase revenue and for advertisers to reach as many companies as they expect. Ratings erosion for the linear networks is problem enough for anyone dependent on TV advertising. That problem is intensified by the networks’ propensity to overestimate how many viewers they’ll reach in order to have more inventory to sell, and the historic willingness of sellers to largely accept those inflated numbers in order to keep pricing down on a cost-per-thousand viewers basis.
A flood of NFL make-goods and a decline in the number of national TV windows took a bite out of November ad sales revenues, but rising unit costs helped take some of the sting out of the downturn.
ESPN may owe upwards of $20M in ad make-goods for ratings shortfalls for the two College Football Playoff semifinal games on New Year’s Eve, according to media buyers.
Lackluster broadcast TV ratings in the first weeks of the fall season could free up ad dollars to shift to cable networks. There’s a problem, though: There aren’t many ad dollars to move.
Ratings for Oprah Winfrey’s fledgling cable network have fallen short of the levels promised to advertisers by nearly a third. OWN: The Oprah Winfrey Network, which is aimed at women 25 to 54 years old, has averaged a 0.1 rating on a total-day basis — well below the 0.3 rating network execs expected, sources say. As a result, OWN has had to offer make-goods to compensate marketers for the shortfall.