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Makegoods, Automated TV, and Getting It Right the First Time Around

April 26th, 2017   ||    by Monta Monaco Hernon   ||    No Comments

Successful media buying is kind of like cooking the perfect meal for the right number of guests and serving it in the ideal location. Both actions require the right ingredients (content that appeals to your customers), a fair price (based on the size of your audience), and the right ambiance (programming that can actually reach your desired audience).

If you can’t get it right, makegoods are in order.

Make-What?

Imagine a five-star restaurant charging five-star prices for fast food, and having 40 people show up when it expected a crowd of 140. Oh, and someone pulls the fire alarm just as the meal is being served, so the diners have to leave without eating.

In television advertising, this nightmare is akin to negotiating a rate for a particular spot based on audience size, tailoring your message to the projected demographic of that audience, and then finding out your advertisement was accidentally misplaced (appearing during an alternate program), or the desired ratings level was not achieved.

Add in trouble with content delivery (like pixelation), and you have the four main circumstances entitling television advertisers to perform makegoods, according to Capitol Media Solutions. A makegoods offer is based on audience deficiency units (ADUs) and typically involves credits or a rerunning of the ad on other programming. The article also points out that approximately 5 percent of networks are estimated to have “serious issues” with missed ratings marks.

Ratings Roller Coasters

Digital advances have opened up a plethora of new viewing options that are responsible for at least some of the ratings havoc. Traditionally high (or at least steady) ratings earners—like broadcast news—are experiencing fluctuating numbers. Even the once-dependable NFL is suffering: AdvertisingAge reported that in November the league’s broadcast partners had to pony up one-fifth of game-time ads for ADUs because the programming failed to meet agreed-upon ratings.

Determining rates and deliverables can be a delicate balancing act, with network execs saying the goal is to get within five percent of estimates, according to AdWeek. They aim to avoid giving back too much in ADUs while also not underestimating the value of their inventory and thus giving anything away for free. At the same time, options are opening up for makegoods thanks to the advancement of cross-platform marketing and measurement, the Capitol Media article suggests. To compensate for failed deliverables, advertisements can be run on comparable digital inventory.

Drive Down Your ADUs

Automated TV buying platforms can also take some of the guesswork out of the game by bringing in data that goes well beyond ratings. So even if the total audience size is projected to be smaller, the right demographic can still be targeted through analytics.

Digital programmatic has been criticized for its auctioneering style, which takes away a measure of control and sometimes leads to ad placement alongside undesirable content. (See The Drum’s coverage of Jaguar’s experience.) Automated TV buying works differently, however. While the workflow is automated, the actual placement still involves a personal touch. And less concern with ratings or misplaced ads can lead to less need for makegoods.

So what is automated TV buying? It’s a restaurant that has the ability to predetermine who will be dining and what they like, and to then serve customers the meals they might not have known they were craving. And it can even do this at a reasonable price, because its waste is likely to be minimal. Bon appétit!

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