ABC-TV Sells Too Much Time Too Soon

When business is too good, business can be hurt, the sales staff at the ABC Television Network learned to its mild embarrassment last month.

They were thrilled, of course, by the unexpected strength of demand when they began selling commercials for the television season that begins in September. But as they booked advance sales during the habitually frenzied “upfront” negotiations with advertisers, they lost track of how much of their inventory they were selling.

They committed to more sales than they intended, according to advertising executives and industry officials, and were forced to abruptly close their books two weeks ago even as some advertisers lined up to book more commercials.

“They really let it get away from them,” said Michael Drexler, national media director for the Bozell, Jacobs, Kenyon & Eckhardt advertising agency. Drexler said the network planned to sell about 60% of its inventory of commercials for the 1987-88 season in the upfront period, but ended up selling about 70%.

Overselling can hurt a network because commercials command higher prices when they are sold later in the season during the so-called scatter sales periods.

Also, in making advance sales, networks offer a guarantee that if viewership does not reach specified levels, they will provide compensatory commercial time--”make-goods,” as they are known--later in the season. If ABC ratings are below expectations and the network is forced to provide lots of make-goods, that will further reduce the amount of time it can auction in premium-priced scatter sales.

“It could cost them real money,” said Drexler, noting that networks typically charge 15% to 25% more for commercial time in the scatter sales negotiations.

A spokesman for the network, Jeff Tolvin, denied that ABC had sold more than it intended.