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.