Welcome to the era of the cross-network make-good.
When it comes to good ratings underdeliveries, Viacom is repurposing its VH1 cable-network advertising shortfall on its other networks, including its broadcast properties, CBS and UPN.
No buyer or seller could recall any cable network giving a make-good on a broadcast network in the past.
So far, the make-goods “have been a combination of a whole bunch of things,” said a senior advertising agency executive who has negotiated the VH1 make-goods. “It’s been cash back, it’s been UPN, it’s been CBS daytime. It’s been a little bit of everything.”
Other buyers say sports on CBS have also been used for VH1 make-goods.
One media agency negotiator said, “I know of at least one make-good that was done through Viacom Outdoor.”
A third buyer said he was offered cash back as well.
“They were terrible estimating their ratings,” one buyer said, “but I’ve never seen any network-cable or broadcast-more accommodating about make-goods.”
Some buyers attribute the client-friendly attitude to Mel Karmazin, Viacom’s chief operating officer. “Before Mel, the MTV Networks were some of the toughest, most unfriendly guys, businesswise, out there,” one buyer said. “They’re still tough, but Mel has gotten them to be very accommodating. In the long term, it will serve them much better.”
Senior Viacom ad-sales officials were asked through a spokesman to reply specifically to queries about the nature of the make-goods and to cite specific clients who had been offered or had accepted CBS or UPN make-goods, as well as to discuss the relative valuations of advertising time on VH1 and the broadcast networks. Viacom declined to comment.
The cross-network make-good is “smart, and it presents an opportunity to both parties,” said another senior advertising agency executive with clients on VH1, whose agency is still negotiating the make-goods.
One way it works, other media agency sources said, is that VH1 is buying inventory internally, through the company itself, on CBS and UPN (and on the Viacom cable networks) to satisfy the audience underdeliveries.
“The real issue here is that we want our delivery in the time period, in the weeks that we want,” said the executive who has received the make-goods. “We know that VH1 doesn’t have the inventory to give back.”
Viacom faces two options to make good these shortfalls, which in some cases are three and four months old, according to this executive: Give back cash or give back time on other networks. “The key is we’re getting the weight when we need it.”
A 30 percent year-to-year ratings drop at VH1 has already resulted in a plethora of make-goods on the network’s own air, essentially commandeering VH1’s shelf space and in effect selling it out through the first half of the year and possibly beyond, according to a report in Advertising Age.
In a sense, the cross-network make-good is simply an extension of existing make-good practices, namely, running a make-good ad in a different daypart or in a different genre of programming than the original underdelivery-for example, good a sports or a news or a prime-time entertainment underdelivery in daytime.