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HOME • MANAGE SUBSCRIPTIONS • MEDIA KIT
Prime-Time TV Commercial Prices Plummet, CBS Faces Biggest Drop
by Joe Mandese, Tuesday, February 3, 2009, 11:26 AM

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The cost of an average prime-time price plummeted 15% during the fourth quarter of 2008, and CBS led the decline with a whopping 22% decline, according to an analysis released this morning by independent media services agency TargetCast tcm. TargetCast estimates that the price of a prime-time network TV commercial fell to $122,133, down 15% from the fourth quarter of 2007.

While CBS experienced the steepest decline, all of the major networks saw significant pricing rollbacks, including NBC (down 13%), ABC (down 10%), and Fox (down 6%).

The prime-time unit price deflation is being caused by a number of factors, says TargetCast Senior Vice President, Director of Broadcast Gary Carr--but the two biggest factors are the economy and the networks' declining share of TV audience viewing.

"The continuing decline in ratings--an overall drop of 13% across all the networks from a year ago--coupled with a declining broadcast economy is a recipe for lower prices," he stated, adding that the situation became exacerbated during the fourth-quarter scatter marketplace, as economic conditions worsened, and "the networks were forced to drop their prices to get what little scatter money was available from advertisers."

TargetCast estimates that ratings for adults 2-54 have fallen 20% versus a year ago at ABC and 16% at NBC. Fox's ratings were down 9% and CBS was down 4%.

Although CBS had the smallest drop in ratings, the Tiffany network's unit price fell the most because it had more surplus inventory coupled with waning demand. In other words, CBS didn't have to give a lot of makegoods for under-delivering on audience guarantees and the ad units it had been holding in reserve were released for sale and suppressed the average price the network could charge.

The TargetCast analysis, derived from SQAD's NetCosts system, examined actual reported spending for prime-time ads on ABC, CBS, NBC and Fox to compute an average unit cost for each network.

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