Buyers Hope HGTV Stems Ad Woes

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Like gardeners trying to eliminate weeds, Home & GardenTelevision is aiming to do away with its double-selling controversy.

Although HGTV is making $2.5 million available foradvertiser make-goods, some ad-agency buyers are more concerned about the situation thatinspired that move.

In its third-quarter-1999 earnings announcement, E.W.Scripps Co. said it had set aside $2.5 million for possible HGTV advertiser make-goods"related to possible underdelivery of audience levels since 1997."

Elaborating last week, a Scripps spokesman in Cincinnatisaid the potential shortfall was related to gross impressions, not ratings. "Thepossible underdelivery of audience would occur if local cable systems covered a nationalspot that then resulted in underdelivery of gross impressions promised to anadvertiser," he explained.

Company sources added that the make-good sum amounted toless than 1 percent of HGTV revenue.

The questionable double-selling practice first came tolight in late September, in an affidavit filed in New York State Supreme Court by ReeseSchonfeld, the founding president of Food Network who now is president of PacesetterCommunications, a Food co-owner along with Scripps.

In his affidavit, Schonfeld alleged, "The fraudulentconduct of the HGTV traffic department consists of scheduling advertising spots paid forby national advertisers in slots that have already been sold to local cable-systemoperators."

He contended, "HGTV knows that these slots will bepre-empted, or 'covered,'" by operators' local avails, and he wantedto keep that practice from spreading to Food.

Some ad agencies said they were upset.

At TN Media Inc., senior vice president and executivedirector of local broadcast Howard Nass said last week, "I'm hoping it was dueto an overzealous salesman who neglected to tell advertisers it was local [time], ratherthan national, and [that] it was an oversight on [HGTV's] part" to delaydisclosure.

Perhaps 15 years ago, he recalled, MTV: Music Televisionsold local avails to national clients. But that network was upfront about it, and it soldthose units at a discount, he added.

"I don't think any [network] in their right mindwould [double-sell] in this day and age because they're going to be found out,"Nass said, adding, "I just hope I'm right."

Nass -- who said his clients have not yet received HGTVmake-goods -- said he was not aware of other cable networks engaging in double-selling.

Until now, the problem only appeared to be an internationalone. A January 1998 article in Multichannel News International reported thatmonitoring of cable-network commercials in several Latin American countries indicated thatin Chile and Argentina, between 1 percent and 9 percent of spots on average were coveredby local commercials.

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