Analysis: Prime Network TV Ad Cost Dives in Q3

The average cost of a 30-second prime-time ad on network TV dropped 16 percent to just under $84,000 in the third quarter compared to Q3 2008. Meanwhile, boosted by higher ratings, cable showed a slight pricing increase during the same period.

That’s according to an analysis by New York-based independent media agency TargetCast, which noted that the double-digit drop was greater than in recent quarters when price declines were in the single digits.

Fox had the highest average unit cost at around $121,000, per the TargetCast rundown, while ABC, CBS and NBC were all in the $70,000-80,000 range.
Gary Carr, senior vp, executive director of national broadcast at the agency, said the average network pricing was affected by two main factors: lower ratings and a tough economy. “Even without counting the Olympics, which ran in 3Q last year, ratings among adults aged 25-54 were down roughly 10 percent versus the same time in 2008. No new broadcast network programs caught on with audiences this summer,” Carr said. “Furthermore, although the scatter market firmed a bit after six months of recession-driven problems, dollars in the market were down.”
In contrast to performance on the broadcast networks, ad-supported cable showed continued ratings growth due to original scripted series, major news events and new reality shows. The top 15 cable networks’ ratings were up nearly 5 percent among adults 25-54.

Four cable networks garnered particularly good ratings, per TargetCast. Fox News was up big due to Michael Jackson tributes and controversial commentators; TLC scored on the travails of Jon and Kate Gosselin of Jon & Kate Plus 8; USA had a hit with Royal Pains; and TNT continued to do well with The Closer.
And the higher ratings resulted in a single-digit price bump for cable despite the difficult economy, TargetCast said. The average unit cost in primetime for the top 15-rated cable networks (based on buys for adults 25-54) was up 5 percent to a little more than $10,000. ESPN at $27,000 and TNT at $17,000 were at the top of the list.
The agency applied syndicated research and tracking data from the NetCosts system to do its computations.

Nielsen Business Media