Forbes: Upfronts, Make-Goods & TV Optimization
30 May 2018 • tvsquared
Jo Kinsella,
EVP and CRO

This article originally ran on Forbes.com on Thursday, May 24, 2018. 

The ad industry just emerged from another year of upfronts, which my colleague often refers to as “the last bastion of old TV buying.” The upfronts consist of TV networks debuting their planned programming to advertisers during a week of high-profile events in New York City. For networks, it’s about promoting premium content. For brands, it’s about locking in the best rates possible for audience reach in the year ahead, with some devoting up to 90% of their annual TV budgets to them. Behind the parties and deals, though, upfront purchases often lead to a lack of control and flexibility.

Upfronts For Reach, Not Response

With upfront buys, advertisers are guaranteed that their spots will reach a certain number of viewers. For brands that leverage TV for awareness, these buys are as good as it gets, but for those that use TV for performance, not so much.

As I mentioned before, upfront buys are “locked in,” meaning brands have little to no chance to optimize their TV campaigns in-flight for performance. While a spot could get in front of millions of people who tune in to a popular program, it doesn’t mean those people will actually respond to the ad.

Like digital, TV is a performance-marketing channel today, which means it can be optimized and measured in real time. TV has traditionally been used for reach and frequency plays, but advertisers are increasingly using it for immediate, measurable response. With 70% of U.S. adults regularly using a digital device or “second screen” while they’re watching TV, the medium has become a driver of direct action. An ad will prompt someone to search for the product online, engage with the brand on social media or even make an immediate purchase. With the data-driven technology now available, advertisers can see how their message resonates – or doesn’t – with the intended audience in real time.

Make-Goods For Flexibility

Let’s consider a hypothetical upfront purchase. In exchange for what I paid to run my ad during a prime-time show, the network guarantees that with each airing it will reach 10 million people. What happens when ratings are down after a few weeks, resulting in only seven million people seeing my spot? The network now “owes” me three million impressions. Enter the make-goods.

Make-goods are “spot audience deficiency units” (ADUs) that networks offer to ensure an ad gets in front of the number of viewers that was agreed to. They are not reserved only for upfront buyers but are offered to all advertisers for many reasons, including ratings shortfalls or a preemption (think breaking-news story, presidential address) that results in the ad not airing.

In the case of upfronts, make-goods provide a level of flexibility and control that advertisers otherwise don’t have. With my example from before, the make-good would be ad inventory offered to get my brand in front of the extra three million viewers still owed to me.

Many advertisers passively take anything the networks offer them for make-goods, but this is a mistake. Make-goods are the chance to not only get more “eyeballs,” but to get in front of the best audience for your brand in the times and places that will drive action. Advertisers should know the best available inventory for performance and negotiate accordingly.

Make-Goods For Performance

Advertisers should treat make-goods as if they’re inventory that they were buying fresh. For many advertisers, this means getting the right inventory that will drive performance versus reach. To do this, here are three things to consider:

1. Negotiate:

During the upfront negotiation and buying process, make sure you’re not contractually locked into whatever make-good the network offers. It’s important to confirm that you will have the flexibility to choose the right inventory for your brand and will be able to make in-flight changes to improve campaign performance.

2. Measure:

No matter what type of buy it is brands should be continuously measuring TV for performance. Leveraging TV analytics solutions allows you to know in real time whether spots are driving response across all touch points. You should always know the days, times, programs, genres and creatives that are driving your greatest response. That way, in the event you’re presented with a make-good opportunity, you should already know how it will perform for your brand.

3. Optimize:

 Once you’re armed with the information about what works and what doesn’t, you can explain to the network the type of inventory that you want to receive for your make-good. Going back to my example, I know that late-night network news works well for me, and early morning sports programming on an affiliate network is also a strong performer. I will be talking to my network to ensure that inventory is made available to me for my make-good.

Don’t simply accept inventory that the network offers to you. Rather than looking at make-goods as zero-cost units, consider them as paid-for advertising that can bring value to your brand.