Broadcast Net Unit Costs Fall in Q4

Even while the scatter market was buoyant in fourth quarter, a new survey suggests that broadcast networks on average were cheaper during the final quarter of 2009 than at the same point a year ago.

The average cost of a thirty second ad, or unit, in primetime across the big four broadcast networks was $105,821, an 11% drop on the previous period in 2008. According to agency TargetCast, New York, Fox had the highest unit cost with a thirty second ad priced at $105, 821 while NBC was in fourth place at $76,436.

The main reason for the drop was two-fold; continued ratings fall-off but also the broadcast networks’ decision to roll-back pricing in last year’s upfront a result of the economic decline.

TargetCast Senior VP/Executive Director of National Broadcast Gary Carr, said Conan O’Brien’s ratings difficulties also worked to reduce the cost of advertising in late night.

NBC’s Tonight Show ratings in the adult 25-54 age group versus those for Jay Leno were off 35% according to TargetCast’s analysis of NetCosts data. “This had the effect of lowering NBC’s unit costs in the late night daypart by 8% to $22,643,” wrote Carr. “Only the strong scatter market prevented these costs from falling further.”

By comparison, ad rates even at the most highly rated cable networks were much smaller. ESPN, for instance, recorded a unit cost of $40,000, followed by USA and TBS which were almost $18,000 per spot. Though the report did not give precise figures for all networks, TargetCast computes that cable unit costs fell by 2% on the top 15 networks in the 25-54 year old demographic.