Buyer: Spot Costs Plummeting

Declining ratings and a moribund economy have begun to take their toll on the TV marketplace, as the average unit price of a 30-second prime-time spot dropped 15 percent in the fourth quarter of 2008.

According to a cost analysis by the New York-based media agency TargetCast tcm, the Big Four in Q4 ‘08 saw the average cost per unit fall to $122,133, down from approximately $144,000 in the year-ago period.

Although CBS remains broadcast’s prime-time ratings leader, the network showed the greatest decline, with a 22 percent drop. (The network’s price fell the most precipitously because it had more available inventory than the other three nets, according to TargetCast.) NBC fell 13 percent in the quarter, followed by ABC (-10 percent) and Fox (-6 percent).

In an email, a CBS spokesperson said the network “absolutely refute[s] the numbers TargetCast is purporting to have.” TargetCast said its analysis was based on syndicated tracking data from SQAD Inc.’s NetCosts system, which arrives at an average CPM by sorting through reported spending figures for prime time buys. 

Meanwhile, NBC’s average unit price fell 13 percent in the quarter, followed by ABC (-10 percent) and Fox (-6 percent).

Two factors lead to the downward trend, said Gary Carr, senior vp, director of broadcast services at TargetCast tcm. “The continuing decline in ratings––an overall drop of 13 percent across all the networks from a year ago––coupled with a declining broadcast economy is a recipe for lower prices,” Carr said.

In yet another blow to the broadcast business, the scatter market began just as the economy went into free-fall. “The networks were forced to drop their prices to get what little scatter money was available from advertisers,” Carr said.

Per Nielsen data, ABC saw ratings for the adults 25–54 drop 20 percent versus Q4 ‘07, while NBC weathered a 16 percent decline. In the same period, Fox’s 25-54 ratings were down 9 percent, while CBS showed the slightest lapse, dipping 4 percent.  

CBS is the lone broadcaster that is not in make-goods, Carr said. That said, scarcity of demand forced the Tiffany network to pull back on pricing.