Price For TV Networks With Fewer Ads? A Modest 7% Premium


Many media-buying TV executives applaud the TV networks that are looking to reduce commercial clutter. But paying a big premium for those fewer commercials is not likely.

Marketing and media agency executives said they would be willing to pay only a 7% premium on the networks that have trimmed back on TV ad clutter, according to an Advertiser Perceptions April survey of 304 executives.

Breaking down the 7% result, of the executives surveyed, 38% said they would not be willing to pay any premium, while 28% believed a 10% premium is warranted; 20% said a 15% premium is acceptable; 11% would accept a 5% premium; and 3% said a 20% premium would be warranted -- or more.

In addition, 53% of executives surveyed did not believe that advertising loads on networks would be a priority, while 47% said that this would be a priority.

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A number of new TV network groups are looking to reduce ad clutter this year, including Fox and NBC. Turner and Viacom had initiated efforts to reduce commercial clutter in previous seasons.

Media executives said they would not be more inclined to increase spending with networks running fewer commercials: 58% said they wouldn't spend more.

Forty-two percent of media executives said they would spend more with the networks that are running fewer ads -- 49% of marketing executives and 38% of media agency executives.

The survey also looked at overall TV upfront ad-buying activity -- 36% said they would be buying during the upfront market; 27% before the upfront; and 37% during the quarter-by-quarter scatter advertising market that follows the June-September upfront TV ad marketplace.

1 comment about "Price For TV Networks With Fewer Ads? A Modest 7% Premium".
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  1. Ed Papazian from Media Dynamics Inc, May 22, 2018 at 12:39 p.m.

    Wayne, this kind of research is totally predictable. Imnsted of asking vague questions why not specify what is being offered---two- or one-minute breaks without "15s" . as opposed to an average break with 6-9 ads, including "15s", plus PSA's and Promo spots.? When a respondent says he/she won't pay a premium to be in a very short break as an alternative to the usual cluttered break then the respondent is either posturing or is totally ignorant about the huge increase in ad recall and message registration to be gained in using the short breaks.

    I happen to think that the networks are perfectly right in proposing CPM hikes of 35-50% for short break "30s" but are they conducting objective and valid ad recall/message playback studies to document the advantage to the brands using such spots? And are they talking to those who make planning decisions who will appreciate the value of the shorter breaks in terms of ad communication? This kind of thing needs to be incorporated into the media planning phase beforehand, not just  the buying phase. Those brands that feel the need---or even  corporate buys involving brands that want the extra impact lift---should be developing upfront buying specs based on CPPs for two kinds of breaks---short and regular. If all of the needed groundwork has been skipped then the networks are in for a big and unwelcome surprise with buyer resisting higher CPMs without taking into proper account their advertising impact. As I reported to "TV Dimensions 2018" subscribers in one of our many "Alerts" , this concept could be a game changer---if the networks handle it properly.

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