Ad Buyers Stick With Network Spots

LOS ANGELES Despite mounting concerns about strike-induced ratings shortfalls in the months to come, most advertisers are sticking with their upfront media commitments.

Most advertisers had until this week to cancel up to 50 percent of their upfront ad purchases for the second quarter. But with the deadline passing, few clients actually opted out, network and media agency sources said.

“Advertisers are very wary that they’re not going to get the ratings points in the marketplace that they expect,” said Steve Lanzano, COO of media agency MPG. “However, they probably have no better options. Advertisers want the ratings, not cash back, since they need the exposure to drive traffic. Cash back doesn’t create sales.”

The strike will begin to have a major impact on ratings in mid-February and March when the lack of original scripted programming will start to show in a big way. With the scatter market extremely expensive because of a lack of highly rated programming in the fourth quarter—before the strike was even a factor—it makes little sense for advertisers to pull out their money.

As for the networks, with the scatter market as strong as it is, they would be glad to give clients their money back so they could sell the spots for significantly more than they did in the upfronts.

“The networks don’t care if advertisers exercise options or take money back,” said Jason Kanefsky, svp, group account director at MPG. “They can spin the inventory for a higher unit cost.”

Even without exercising their cancellation options, advertisers can request cash back from the networks just days before their ads are scheduled to run during strike-affected shows. If repeats of the shows they bought air, they are entitled to make-goods for the ratings shortfalls but no cash back.

Make-goods seem to be the preferred option for media buyers right now, and strong ratings performances from NBC’s American Gladiators and Fox’s Terminator: The Sarah Connor Chronicles indicate that such a strategy could work for most advertisers, buyers said.

That may not be the case for those who bought such top-rated shows as Grey’s Anatomy, CSI: Crime Scene Investigation and Heroes, which might find it challenging to make up for their lost ratings points.