ABC Offers Online Ads To Disappointed Broadcast Advertisers

ABC is trying something novel when its TV shows underperform: Rather than give an advertiser a refund or additional ad spots on the network, it’s offering them additional ad spots on the Web.

Background: In TV advertising, the seller takes all the risk: If ABC (DIS) guarantees a certain number of viewer impressions to Procter & Gamble and they don’t deliver, they have to pay “makegoods,” which is are typically additional ad spots or, in a worst-case scenario, a cash refund.

Now ABC sales president Mike Shaw tells MediaPost that he’s passing off spots on as makegoods. The selling point: Rather than giving advertisers spots on ABC’s lesser TV shows, Shaw is offering spots on ABC’s top shows —  “Lost,” “Desperate Housewives,” and “Grey’s Anatomy” — and the opportunity to be the sole sponsor for those shows.

If this becomes widely-accepted practice, it’s a sea change from just a just a year ago, when online ad spots were thrown into deals or considered ad-ons to bigger TV buys. The good news for the networks is that online ad spots sell for a higher cost-per-thousand than those on TV. The downside is that compared to TV they have very few viewers to offer, meaning this won’t help much for big shortfalls on network TV.

See Also:
NBC Says Sales Are Up. Good Luck Figuring Out The Real Story
Zucker: Enough About Ratings, Let’s Talk Margins

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