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More buyers criticize HGTV’s practices

Apr 23, 2001  •  Post A Comment

The Home & Garden Television Network, recently accused for the second time in less than two years of sales practices that potentially misled national ad buyers, has responded to the latest criticism, contending “HGTV has in fact acted in a responsible manner.”
But some buyers said otherwise.
“The problem with what HGTV has done is, first of all, this isn’t the first time,” said Kathleen Haesele, senior vice president and director of broadcast for St. Louis-based Advanswers, which does business with HGTV. “They were caught [the first time] with that same sort of problem of local people inserting over local commercials. … They cleaned that all up, they apologized and they gave people [make-goods] and said, `We’ll never do anything like that [again],’ the whole number.
“But they didn’t mention at that time that they did have agreements with some of these [cable] systems that they could cover over an entire HGTV program, which would of course also cover over whatever commercials were in the HGTV program. And they knew that then. … Having been caught once, you’d think they would have been smarter than that.”
Howard Ness, senior vice president and executive director of local broadcast at TN Media, is a vocal critic of HGTV’s alleged misleading sales practices, which first came to light in a lawsuit in 1999. “I am just so surprised that a company like [HGTV owner] Scripps would, for the second time, allow such a negative light to shine on them,” Mr. Ness said.
HGTV’s defense of itself came in an April 13 letter from Steven Gigliotti, senior vice president of ad sales, to members of the National TV/Radio Committee of the American Association of Advertising Agencies. The letter, a copy of which was obtained by Electronic Media, is the third in a series of correspondences stemming from an incident in the fourth quarter. That incident arose out of the HGTV local-programming pre-emption option and involved a buyer who was not aware that the national spots she had purchased were subject to local pre-emptions (EM, April 16).
At the time, the buyer, Karen Shuster, who had purchased a schedule of spots on HGTV was dismayed, as Mr. Gigliotti put it in a March 8 missive, to find that “during one half-hour time period the MSO in her city inserted a locally originated program over HGTV.” That city was Providence, R.I., and the cable system Ms. Shuster was watching at the time was Cox Cable.
Mr. Gigliotti contended that the pre-emption that had so dismayed Ms. Shuster was “an unauthorized insertion by her local cable system.” (Mr. Gigliotti’s claim that the pre-emption was unauthorized was later disputed in a statement to EM by Mark Gosciminski, general sales manager, Cable Rep Advertising, Rhode Island, the advertising division of Cox Communications.)
This most recent letter from Mr. Gigliotti does not address the issue of whether the insertion that prompted the contretemps was in fact authorized. Rather, it addresses the local programming option itself-how it came into being and how it came to be phased out, and what HGTV intends to do to address advertiser and agency concerns.
After dealing with the historical reasons HGTV has allowed some multiple cable system operators to pre-empt HGTV programming, the letter reiterates that HGTV “did not attempt to mislead or hide the issue” from advertisers, a charge made in the AAAA’s April 5 letter to Mr. Gigliotti.
Indeed, Ms. Haesele of Advanswers searched through a sales-plan submission from HGTV and to her surprise found an asterisked caution there. That caution read: “Programs in these slots may be replaced by programs of the local cable provider’s choice.”
None of the programs that carried commercials from her clients had asterisks, Ms. Haesele noted. Informed of the specific half-hour time periods that could be pre-empted, as outlined by Mr. Gigliotti in his April 13 letter, Ms. Haesele said that she was buying some rotations that would in fact run through the affected time periods. “Yet they don’t have the asterisk next to them,” she said.
Mr. Gigliotti’s April 13 letter recounts five steps HGTV has taken to ameliorate the situation: The half-hour periods that can be legitimately pre-empted have been removed from national sale, “other than Direct Response” spots; the statement explaining the pre-emption policy in ad plans has been made more descriptive; HGTV will implement addressable cue tones in any cable systems that are legitimately pre-empting shows; these systems must talk to Nielsen about their level of pre-emptions; and all half-hour pre-emptions will “cease by the end of the year.”
Furthermore, HGTV has taken the following steps to address any past concerns over the pre-emption issue: It will post accounts from October 1999 to March 2001 “that may have had a single spot air” in any of the time periods that may have been pre-empted; it will ask Nielsen “to prepare an adjusted tape for MSA”; and it will make any advertiser completely whole who has “suffered a shortfall as a result of this issue.”