Study stokes cable-broadcast brawl

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The Cabletelevision Advertising Bureau's latest salvo in this year's battle for advertising dollars is a study charging the four main broadcast networks will owe $109 million to advertisers in make-goods for July and August. But networks debunked the study and media buyers voiced major skepticism.

CAB maintains ABC, CBS, NBC and Fox will deliver far lower audiences than promised to advertisers and thus will have to provide free spots to compensate. The trade group hopes the study will result in increased advertiser skepticism about broadcast TV, and more dollars for cable, especially in the summer when the broadcast networks' fare tends toward reruns.

Make-goods refer to the practice of providing free ad time if ads fail to reach the number of viewers a network guarantees an advertiser based on Nielsen ratings.

Broadcast executives, having just lived through an upfront selling period that yielded $1 billion less than a year ago for the fall-to-summer TV season, were quick to puncture holes in CAB's number crunching and disagreed with the contention that the final two summer months will leave networks struggling to keep advertisers content.

"Ludicrous," said Larry Hyams, VP-audience analysis at Walt Disney Co.'s ABC.

"Our internal projections, which will remain internal, indicate very different results," said a spokesman for News Corp.'s Fox.

Dana McClintock, a spokesman at Viacom's CBS, said: "We do have lesser audiences than we did last summer, only because last summer we had `Survivor' and now we don't. We didn't sell for `Survivor' this summer, so all of our guarantees to advertisers are being met, so CBS is not part of those shortfalls."

A spokeswoman for General Electric Co.'s NBC said no one was available to comment.

Here's how CAB reached its figure: It took the average primetime Nielsen viewership levels for the four networks during June from 1995 through 2000-6.84 million homes-and compared it with the same figure for July and August 1995 to 2000-6.29 million homes. That marks an 8% decline.

Next, it took the actual viewership for this June for the four nets-5.80 million-and reduced it by the 8% decline, arriving at a projection for this July and August of 5.33 million homes. That figure was then compared with viewership delivery figures for July and August of last year-5.90 million homes-leading CAB to conclude the networks will deliver an average shortfall of some 566,000 homes over the next two months. Based on an average cost-per-thousand provided by Nielsen of $16.60 used last year and estimates of 11,600 30-second spots to run in July and August, CAB determined the $109 million figure-which it contends would be unexpected to broadcasters.

"There's no way they projected a half-million [household] shortfall in their average delivery," said Jonathan Sims, CAB's VP-research, who conducted the study. "This shows the potential of how bloody it can get."

Media buyers, who monitor the success of ad placements diligently, said networks may have overestimated their ratings, but they do not expect a huge windfall in make-goods for July and August.

"I don't see anything more coming back to us than normal," said Andy Donchin, senior VP-director of national broadcast for Aegis Group's Carat USA.

Chris Geraci, senior VP-director of national TV buying at Omnicom Group media shop OMD, was skeptical about the study.

"This exercise has a fundamental flaw," he said. "They're not taking into account any of the possible over-delivery that occurred during the year. The vast majority of audience guarantees are annual guarantees, in which case the advertiser may be in such good shape going into the third quarter that it really doesn't matter."

ABC's Mr. Hyams called the study flawed because the broadcast networks would not necessarily base audience guarantees on last year's ratings. "They don't know what our guarantees are," he said. "CBS knew they wouldn't have `Survivor' on in June this year, so they wouldn't have guaranteed such a high level. We noticed `Millionaire' was softening and we took that into account when we made our guarantees."

CAB's Mr. Sims conceded he did not know details about network guarantees, but said, "They may have anticipated a shortfall, but did they project a shortfall of 566,000 homes? I doubt it."

ABC's Mr. Hyams went on to say networks would not factor in a multiyear average viewership when determining guarantees. ABC uses ratings over the past year and then tries to gauge the strength of the programming before making projections, he said.

The Fox spokesman said of the analysis, "Since it's based on ratings projections, it's essentially a meaningless study that sounds like it was designed to make headlines."

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