What would Shakespeare do?

Three major networks have begun to compensate advertisers for abominable TV ratings for the fall season.

Compensation comes mainly in the form of extra ad time. But according to some media buyers and network heads (via Reuters), NBC has begun paying its dues in cash.

NBC stated its refunds form "an extremely small portion of NBC's business and accommodate the changing needs of our clients' marketing plans." Compensation thus far amounts to about $500,000 per advertiser.

Meanwhile, NBC, ABC and CBS are also providing "make-goods" — free commercial time — to advertisers for Q1, Q2 and Q3 of 2008. Fox, a News Corp. property, has thus far declined to provide compensation.

The writers strike does not solely bear blame for lower ratings. Increased use of DVRs like TiVo, few big hits and waning interest in comeback shows contribute to the strain.

For early next year, networks have begun preparing reality shows and (still more, and more) reruns. Expect ratings to go on taking blows.

In early December, the Alliance of Motion Picture and Television Producers made a proposal called the New Economic Partnership to the striking storytellers. Days later, the Writers Guild responded with a revised compensation proposal, which did little more than stir existing ire.

Far from cheery about free ad time and financial recompense, ad agencies and media buyers continue to squirm.

"Ad agencies have to negotiate with networks for revised schedules based on current strike replacement programming and get client approval for the revised schedule. We're working on a month-to-month basis," said EVP Aaron Cohen for Horizon Media.

SVP Shari Brill of Carat USA, a media buying firm, echoes Cohen's skepticism about the climate of '08.

"Advertisers generally prefer to be in scripted content, and will not readily accept being put into lower-quality reality fare when their upfront dollars were spent on the expectation of being placed in quality scripted content," she explained.

With a touch of foreboding, Brill added, "If the networks are in this ratings under-delivery situation now, it could only worsen in the event of a prolonged strike."

Even before the New Economic Partnership was proposed (and quickly lambasted), the writers strike was projected to bleed into January.