Make-Goods and Upfronts

Make-Goods are ads which were paid for, but not used. For instance, a company paid millions to run an ad during a TV show, with the promise that it would reach 8 million people with each airing. A few weeks into the season, ratings could be down, and the ad is only seen by 6 million people. The network owes 2 million ad impressions to the buyer. Make-goods or spot audience deficiency units are run in something other than the original program that was purchased.

Upfronts are buying TV ad time for reach, not for response. Networks offer premium inventory, and brands buy it with the guarantee that their ads will reach a certain number of eyeballs. Companies get access to network ad inventory time at discounted rates. The buys lack flexibility that makes it almost impossible to make in-flight changes to campaigns. This commitment, which for some brands is 90% of their annual TV budget, is probably the last bastion of old TV ad buying.

During the past season NFL games, the delivery of “make goods” grew to 23% of the units due to lower ratings.