• by Wayne Friedman , June 16, 2008

Broadcast networks are starting to experiment in giving makegood inventory in digital streaming episodes in lieu of traditional TV commercial time.

This past season, a handful of advertisers took makegood inventory from ABC on its ABC.com video player during episodes of specific shows. Mike Shaw, president of advertising sales for ABC, would not name those marketers, but noted that in many cases digital inventory was more valuable than on the traditional network.

For instance, Shaw said advertisers got the benefit of higher price, cost-per-thousand viewers (CPM) digital episodes--prices that can be anywhere from one-quarter to one-third higher on network's respective digital players.

In addition, Shaw says advertisers are getting a better rotation of top-rated shows online, such as "Desperate Housewives," "Grey's Anatomy" and "Lost."

"The biggest single selling point is the mix," he says. "You get such a high concentration of your total impression in the top five or six shows. It's a mix of inventory I'd never sell you on the linear network."

Moreover, he says that advertisers typically get just their exclusive commercial message played in an individual stream of an episode, and the message can be interactive.

One media executive said NBC experimented in giving Internet makegoods instead of traditional TV makegoods in the past. But the network isn't currently doing this practice for advertisers.

More than a few media executives were astonished that some marketers would agree to this. "What have we come to?" asks one disgruntled executive. "How can this beat full-screen television? We don't even know if they can measure the Internet properly, let alone giving us a demographic breakdown."

So far, the bulk of the broadcast networks' massive makegood problems this season--specifically ABC, NBC, CW, and CBS--have been handled in the traditional ways, according to most media agency executives and media sellers. All executives say that comes from "managing" their inventory supplies, which essentially means selling somewhat less scatter and using unsold inventory for advertiser makegoods.

Because of the scale of viewer erosion this season, some industry analysts anticipate that makegood inventory from last season will flow in the fourth quarter of this year, the new season. And that complicates networks' scatter sales activities. Others expect the networks to take care of advertisers this summer by giving makegood commercial inventory.

Still others believe some networks may have added inventory in select big-rated shows this season to take care of the gross rating points that were promised--but not delivered--to advertisers.

A CBS spokeswoman would not comment. An NBC spokeswoman said: "Those conversations have been with our advertisers."