For years the traditional wisdom was that buying local spot TV advertising is always more expensive than buying broadcast network television --
on a comparable national basis.
But the TVB, the advertising trade association for TV stations -- with the help of TV research company SQAD and its data estimates -- now says that in many more dayparts, local spot is cheaper than buying broadcast network TV scatter commercials.
For example, the TVB notes that second-quarter late-night network scatter for the adults 25-54 demographic will average $37.19 in the cost per thousand viewers (CPM) while spot TV is averaging $19.19.
In addition, morning broadcast network TV is 47% more expensive than local spot among 25-54 viewers for the second quarter of 2013 ($23.78 CPMs for network, $16.20 CPMs for local spot) and early news TV broadcast programming is 11% higher-priced than local TV spot among 25-54 viewers ($25.75 for network, $23.12 for local spot).
One veteran media agency executive is shocked by these numbers: "I have never seen anything higher than around $18 or $20 for adults 25-54 or 18-49 [in late-night network programming]." He maintains: "Local TV is generally less efficient that national TV."
The group also notes that broadcast network scatter CPMs rose faster from the first quarter to the second quarter of this year -- 32% -- in adults 25-54 CPMs than a rise during the same period for local TV spot CPMs, which witnessed a 10% hike.
TVB also says "spot TV prime CPMs are right on par with network scatter." Those came in at a $50.20 CPMs second-quarter projection for broadcast network; $50.39 CPMs for local spot.
Jack Poor, vice president of marketing insights for the TVB, stated: “Based on the analysis of the second quarter 2013 SQAD data, it is clearly incorrect to conclude that it’s more efficient for an advertiser to default to a national network scatter approach."