Trad 30-Sec Spot Shines, Costs Up 5%

Television's 30-second ad commercial units costs keep climbing -- now nearly three years in a row. In the fourth quarter, the average cost per 30-second commercial grew 5% -- to $122,734 from $116,699 in the fourth quarter of 2011, according to analysis from media agency TargetCast tcm, utilizing data from SQAD's NetCosts service.

Fox had the highest unit cost at $179,375, with ABC and CBS around $55,000 behind. ABC came in at $124,938 and CBS at $123,824. Although NBC was well behind these levels at $90,043, it made a big jump of 19% over fourth-quarter 2011.

But TV wasn't growing everywhere in the period -- top cable networks dropped in scatter pricing in the period, due to a softened scatter market. Average unit costs for the top 15 cable networks among 25-54 viewers in prime time were down 9% to $17,123. TargetCast says the decline was most likely due to the soft scatter market.

ESPN maintained the top price -- $54,415 for a 30-second commercial. TBS was next at $24,040.

Cable networks get most of their advertising revenue in the quarter-to-quarter scatter market versus the upfront market. It is the opposite situation for broadcast networks, where those networks get anywhere from 70% to 80% from upfront advertising sales, and around 20% to 30% of their ad revenues from scatter market activity.

Still, cable keeps growing in viewership -- up 1% among 25-54 viewers in the fourth quarter for the top 15 networks. TargetCast says top networks' ratings and ad costs are being affected by the growth of smaller networks.

Gary Carr, senior vice president and executive director of national broadcast for TargetCast tcm, stated that despite factors such as declining broadcast ratings, the growth of cable, and a less than booming economy, "demand for network television seems to be holding.”

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1 comment about "Trad 30-Sec Spot Shines, Costs Up 5%".
  1. Michael Natale from MCM Media Sales , March 14, 2013 at 10:01 a.m.
    I will say it again...It's almost like advertiser extortion. Ratings go down quarter after quarter, year after year but cpm prices go up. I love the positioning of the Networks....."you don't have to buy us if you don't want to, go try and find your scale elsewhere"... What percentage of shows bought in the upfront lasted the entire season and achieved their ratings estimates? Where else can you do a bad job and not only get rewarded for it year after year but get price increases?