Legacy TV has seen higher “effective” cost-per-thousand prices for deals in the TV upfront ad markets over the last three TV seasons, according to Standard Media Index (SMI) -- but with lower total upfront advertising spend in key dayparts.SMI says the trend is expected to continue for the next TV upfront ad market, set to begin in a few weeks.
“This funneling of both supply and demand -- coupled with the supply crunch due to video’s digital migration -- will leave the legacy video publishers in a position of strength-from-weakness to (likely) maintain price growth,” according to the TV advertising research company.
Effective CPMs -- which are calculated as "delivered" CPMs for upfront advertising inventory -- rose to a 268 index, up 14 points from a year ago for all programming for the 2021-2022 TV season so far (October through February).
The eCPM index number is indexed to all TV programming. For the 2020-2021 TV season, it was a 254 index, while for the 2019-2020 TV, season it was 248.
The "supply crunch" has also dramatically resulted in an overall drop in legacy TV ad spending due to a shift of dollars to digital media.
For example, looking at five networks -- ABC, CBS, Fox, NBC, and CW -- total prime-time ad spend (for non-sports programming) dropped to $1.7 billion, season-to-date (October to March). The total was $2.1 billion over the same time period last TV season, and $2.6 billion for each of the previous three TV seasons.
At the same time, average 30-second commercial unit costs for upfront programming continue to drop -- due to a lower supply of viewing gross ratings points.
The current TV season (October through March) is now averaging $55,000 for a 30-second commercial unit -- down from $59,000 from the previous TV season (2020-2021), and $76,000 for each of the 2018-2019 and 2019-2020 TV seasons.
SMI captures between 70% and 95% of all media agency spend, with data coming from raw billing records of all media transactions. This includes television, digital, out-of-home, print, and radio.