In Their Prime: Broadcast Spot Costs Soar

Gap between network and cable CPMs remains vast

Marketers looking to buy time on broadcast television have had to dig a little deeper, as the average cost of a prime-time spot is just shy of $110,000 a pop.

According to analysis by New York independent media agency TargetCast tcm, the average price of a 30-second spot in the first quarter of 2011 was $108,956, up 5 percent from the year-ago period. The percentage increase translates to an average hike of $5,000 per ad.

Thanks to its dominance among the 18-49 demo, Fox continues to lead the way in pricing, with an average Q1 unit cost of $188,974. Curiously, that represents a 6 percent decline from the first quarter of 2010, when TargetCast pegged Fox’s average spot at a hair above $200,000.

CBS, which won the season’s total-viewer and 25-54 crowns, boasted the second-highest rate ($113,842). The estimate marks a 21 percent improvement from the prior-year period, when CBS charged around $94,000 per prime-time :30.

ABC was up 4 percent, to $97,837, while NBC brought up the rear at $74,431 (down 2 percent).

During the fourth quarter of 2010, the average unit cost for the Big Four was slightly higher ($114,267). Fox again claimed the priciest rate at $139,931, an increase of 15 percent from Q4 2009. ABC was flat, at $121,879, while CBS was up a few ticks with an average charge of $115,928 per ad. NBC’s $87,617 price tag represented a 15 percent increase from the previous year.

While unit costs have declined in recent years—in the first quarter of 2010, they dropped 10 percent—the strength of the 2010-11 upfront and subsequent scatter market conspired to lift all boats. Naturally, declining ratings also helped boost pricing, as the decrease in GRPs created a relative scarcity in avails.

“The robust demand for television, combined with limited available inventory due to declining ratings and delivery liabilities of the networks, drove unit prices and CPMs higher,” said Gary Carr, executive director of national broadcast at TargetCast.

During the 2010-11 season, the most expensive buy on broadcast TV was Fox’s American Idol, which raked in approximately $475,000 per spot, according to media buyers. Close on Idol’s heels was NBC’s Sunday Night Football. The average 30-second spot in the Peacock’s NFL showcase cost around $425,000.

Based on rates set in the year-ago upfront bazaar, ABC’s priciest program was Grey’s Anatomy ($225,000 a pop). CBS charged a premium for the Monday night comedy Two and a Half Men ($215,000), while The CW scared up its highest rate with The Vampire Diaries ($75,000).

Ad-supported cable also has enjoyed significant gains, although there remains a significant gap between what cable nets can charge compared to broadcasters. The average unit cost of the top 15 destinations for adults 25-54 grew 19 percent to $13,100.

Sports led the charge, as ESPN boasted an average Q1 unit cost of $31,551, while TNT took a distant second ($16,474). In the previous quarter, the average rate charged by a top-tier cable net was up 22 percent to $16,395.

Among the demo, the most-watched cable channels in those two quarters included USA Network, ESPN, History, TNT, A&E, FX, ABC Family, TBS, Discovery Channel, AMC, Syfy, truTV, Bravo, Food Network, MTV, HGTV, and TLC.