CPMs Highest Among TV Broadcast Nets, Online Video Limited

TV broadcast networks cost-per-thousand viewer prices are still tops among all media in 2013 -- with digital in-stream video CPMs higher than cable TV.

For 2013, TV broadcast CPMs averaged $44.11 for adults 18-49, the most popular viewing category, with in-stream video (for all demographic groups) at $23.03 and cable TV at $15.63 for 18-49 viewers. This is according to Tarrytown, NY-based SQAD, the independent researcher in the U.S. for TV, radio and digital costs and analysis.

Both TV broadcast and cable TV network CPMs rose 5% year-to-year. SQAD did not offer any 2012 comparisons for in-stream video.

Looking at just the major TV providers that deliver digital video -- NBC, CBS, and ABC -- their premium programming average was $30 CPMs in 2013 versus the overall $23.03 average for digital video.

“In many cases, online premium video inventory is still somewhat limited, so it's not that surprising that rates are high right now," stated Neil Klar, chief executive officer of SQAD.

"Broadcast TV networks command premium CPMs because of their reach and programming, and they have leveraged those commodities to obtain upper-tier in-stream video CPMs," he added.

Digital display CPMs  continue to struggle, as other research has also shown -- down 1% year-to-year to $10.88 from $10.98.

"Watching TV" photo from Shutterstock.

17 comments about "CPMs Highest Among TV Broadcast Nets, Online Video Limited".
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  1. Darrin Stephens from McMann & Tate, March 27, 2014 at 11:43 a.m.

    A blatantly misleading report from SQAD which you have dutifully parroted. It compares only the most expensive network TV (primetime, neglecting less expensive dayparts)) to all in-stream video (whatever that means, does it include clips of guys getting hit in the nuts?).

    I'm not even sure if the costs are equivalenced to a 30 second basis. That's kinda important when comparing CPMs.

  2. Timothy Daly from ITN networks, March 27, 2014 at 5:34 p.m.

    Wayne, you can't really compare Adult 18-49 CPMs to CPMs "for all demographic groups". Ask SQAD to put the CPMs against a demo group that is the same across Network, Cable, and digital. It may well show that whatever SQAD is including under "digital instream video" has higher CPMs than network according to their data. I would also question how SQAD determined the 1% year to year drop in Digital.

  3. J Neighbors from II media , March 28, 2014 at 8:23 a.m.

    Great insights Darrin and Timothy. These trades too often write articles based on press releases NOT true reporting!

  4. Mike Einstein from the Brothers Einstein, March 28, 2014 at 9:03 a.m.

    I wonder what the CPMs are for ads that people actually see. BTW, just curious, but let's say woman watches a particular commercial on the network morning news (relatively cheap CPM) before going to work and then watches the same commercial in prime time on the same network (much higher CPM) when she's back home for the night. Why is there a different price to reach the same person with the same message on the same network? And why are we even debating this foolishness when that same woman spends two hours a night on Facebook where CPMs are less than a buck? Sounds to me like the TV guys have this perverted mess well in hand.

  5. Debbie Coffee from WHTM-TV, March 28, 2014 at 9:09 a.m.

    Darrin, Timothy and J- agreed!
    Mike-it's not just "reaching" a target- it's effecting them and TV has proven itself as the most effective advertising medium in every major category along the decision/purchase stream. Why do politicians spend more of their money in TV then any other place?- because it works!

  6. Mike Einstein from the Brothers Einstein, March 28, 2014 at 9:27 a.m.

    @Debbie, FWIW, I am the guy who, 32 years ago as a business development specialist for the CBS affiliate in Honolulu, first introduced "emotion" to the TV sales lexicon in the prize-winning spot I produced for the TvB's first-ever contest among member stations to produce an on-air spot promoting the use of television as an advertising medium (at least that's what it says on the FIRST PRIZE plaque I received). So, please, drink all the Kool Aid you want, but spare me the TV sales primer. And your response still doesn't reconcile the difference between the CPM in the network morning news and the same network's prime time CPMs, so you entire thesis sort of flies out the door. BTW, you can view my prize-winning spot -- which, admitedly wouldn't play very well online -- by simply Googling: Mike Einstein, Why Television Works.

  7. Darrin Stephens from McMann & Tate, March 28, 2014 at 10:51 a.m.

    Mike, I'm guessing you don't have any of these highly sought after "plaques" for economics. Commercials cost more in primetime for a variety of qualitative reasons that affect supply and demand.

  8. Mike Einstein from the Brothers Einstein, March 28, 2014 at 10:57 a.m.

    Thanks, Darrin. Say hi to Larry for me.

  9. Mike Einstein from the Brothers Einstein, March 28, 2014 at 11:34 a.m.

    By the way, Darrin, what you've described is the stranglehold television (especially in local news) continues to exert on the media ecology as the scalable-reach devil we know. The online guys have chosen the presumed ability to target the audience one-on-one (rendering the Web virtually worthless as a branding medium) over television's proven ability to reach it in scale, much to the TV guys' delight. Every time a Twitter du jour dumps a billion more impressions into the digital ad mix, the cash registers ring at the TV networks. Doesn't take an Einstein to see why the big money is on TV, and for once, I actually agree with you. Watch my pre-Web commercial for TvB and see for yourself.

  10. Timothy Daly from ITN networks, March 28, 2014 at 11:43 a.m.

    There are simple quantitative reasons, too. The CPM is based on the characteristics of all 1000 viewers, and to say each viewer in the 1000 has the same value is not quite right. The CPM is an average across viewers, and some viewers are expensive and some are inexpensive. Let's give the woman in our example the same price in both prime and early morning. The difference in daypart prices is because of the value of the other 999 viewers. Primetime has more expensive hard to reach viewers than early morning - and on top of this there are a host of qualitative environmental and ad receptiveness factors as Darrin points out.

  11. Ron Stitt from Fox Television Stations, March 28, 2014 at 11:57 a.m.

    I know it's the holy grail for some because their spreadsheets have to line up, but there are so many variables that go into creating value around an impression that it renders cross-media CPM comparisons borderline meaningless. On the local level, advertisers may not be masters of media math, but they're not stupid. They know what works.

  12. Mike Einstein from the Brothers Einstein, March 28, 2014 at 12:29 p.m.

    Timothy,you make no sense at all. The HUT levels in morning vs prime tell us that folks are easier to reach at night, not harder to reach. Same number of channels, just lots more folks watching TV. That's why they call it "prime" time. Just follow the money. Scalable reach is the only non-discretionary line item in most big-brand media spends, and TV is where they spend it. Better yet, try this one on for size: If you look at the weekly cume (audience reach) totals in any market for the four major networks, you see them each "reaching" similar percentages of audience, which, when added together, total more than 300%! Assuming you agree that there can only be 100% of anything (including an audience), these cume totals reveal that all 4 stations reach the exact same people -- over the exact same time period! And yet for some reason, media buyers and sellers -- apparently some folks here, too -- think there are "qualitative" differences among stations and viewers. Logic, common sense, and Neilsen, say otherwise. But don't despair, Timothy, there may be a place for you at McMann & Tate.

  13. Timothy Daly from ITN networks, March 28, 2014 at 1:34 p.m.

    Lot's more "hard to reach" folks watching primetime, Mike. And please, station cumes represent the reach of all of the spots on a station in a daypart. What advertiser buys all of the spots? Think about how audiences and the reach of a typical ad campaign builds and you may begin to understand that heavy viewers are easy to reach and relatively cheap, and light viewers are hard to reach and relatively expensive.

  14. Mike Einstein from the Brothers Einstein, March 28, 2014 at 3:01 p.m.

    Once more for grins, Timothy: You have it completely backwards. The reason the nets can and do charge more in prime is because advertisers want the guaranteed audience scale and ease of buying that only prime time TV continues to deliver and which is MIA online. But the real argument against your "harder to reach in prime" position is the emergence of local news as the highest-rated, most expensive inventory on many stations. No matter how many distractions across the cable band and/or the Web, at news time, it suddenly becomes a 3 or 4 station TV universe. The point is, local news ratings in many markets now eclipse their affiliated network's best-rated programming, with prices in most markets to reflect the easy, repeat, easy way to reach consumers in scale. And your reference to cumes is dead on -- it measures the cumulative reach of the station, which was my point. In fact, the real irony hidden in the cumes is the fact that upon closer inspection, you realize that a consistent ROS schedule always outperforms a cherry-picked schedule of similar weight in terms adult delivery. And over time, say 10,000 adult GRPs worth, you notice that you're actually paying less for the folks in your presumed target demo than if you had purchased them a la carte.

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  16. Kevin Barry from Barry Marketing & Media, March 30, 2014 at 9:21 p.m.

    One of the prime reasons morning news costs less than prime is the assumption that the morning viewer is putting on makeup and feeding the kids breakfast while she's watching. The prime time viewer has fewer distractions. I doubt that can be definitively proven, but I must admit, it passes the smell test.

  17. Tom Adams from SQAD, April 2, 2014 at 1:30 p.m.

    We are often asked about cost comparisons among Network TV, Cable, Display, and In-Stream video.
    After completing the first year of In-Stream video CPM reporting in WebCosts, we decided this would be a great time to respond and put a perspective out there. SQAD reports market costs on TV and Internet advertising. All reported costs are based on the aggregation of buy-side contracted rates.
    The 2013 TV / Internet perspective provides a solid, first time, comparison of what the market is paying for in-stream video and includes many popular sites. We compared it to Network and Cable A18-49, because it is a most desirable demographic attracting a significant amount of ad dollars. As most people know, at this time there is not a universal currency like Nielsen’s measurement of A18-49 for In-Stream Video. But, we are confident that the industry will settle on currency style metrics for in-stream video. At that time, Webcosts will certainly incorporate this data.

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