Price of Network Prime-Time Spots Falls 15% in Fourth Quarter

TargetCast: Declining Ratings and Bad Economy Led to Lower Cost Per Unit

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NEW YORK (AdAge.com) -- Poor ratings and a waning broadcast economy sent the average cost per unit of network prime-time spots spiraling down 15% to $122,133 in the fourth quarter. The finding was part of TargetCast TCM's analysis of prime-time network costs for the fourth quarter of 2008.

4Q '08: Shows with highest unit price
*TargetCast TCM study based on NetCost data
Network Program
Fox 24
ABC Desperate Housewives
ABC Grey's Anatomy
Fox House Tuesday
ABC Grey's Anatomy Thursday
Fox House
Fox Family Guy
Fox Simpsons
ABC Extreme Home Makeover
CBS Two and a Half Men
ABC Dancing With the Stars Tuesday
CBS CSI
ABC Dancing With the Stars
NBC Heroes
NBC The Office
*ABC, CBS, NBC, Fox; no sports or specials

The independent media agency also found that CBS saw the biggest decline by far and led the fall with a 22% drop, trailed by NBC at 13% and ABC at 10%. Fox saw the smallest decline in cost per unit, with only a 6% drop.

Gary Carr, senior VP-director of broadcast services at TargetCast, in a statement said the economy was in a free fall as the scatter market began, which forced networks to drop their prices in order to get "what little scatter money was available" from marketers.

Down demographic
The agency's analysis revealed that ratings among adults 25 to 54 were also down considerably at three of the four major networks compared with a year ago. ABC's ratings in the demographic were down 20%, NBC's 16% and Fox's 9%. CBS, however, saw its ratings drop only 4% in that highly coveted demographic.

Mr. Carr said CBS took the biggest hit in cost per unit, despite experiencing the smallest drop in ratings, because it had a considerable amount of available inventory. "Since their ratings were fairly flat, they did not have to use the inventory for make-goods," he said. "With so few dollars out there, they were forced to drop prices."

4Q '07: Shows with highest unit price
*TargetCast TCM study based on NetCost data
Network Program
ABC Grey's Anatomy Thursday
ABC Grey's Anatomy
ABC Desperate Housewives
Fox House
NBC Heroes
CBS CSI
CBS Two and a Half Men
ABC Dancing With the Stars
CBS Survivor
Fox Family Guy
Fox Simpsons
ABC Extreme Home Makeover
CBS CSI: Miami
ABC Brothers and Sisters
ABC Private Practice
*ABC, CBS, NBC, Fox; no sports or specials

It's also unusual to see a decline in the fourth quarter, given that many marketers are eager to advertise in the weeks leading up to and during the holiday shopping period. But the major decline in prime-time ratings and the bad economy led to lower costs this time around.

Most expensive shows
ABC and Fox shows commanded the highest unit prices, with ABC's "Grey's Anatomy" (both Wednesday and Thursday nights) and "Desperate Housewives" and Fox's "24" and "House" among the five most expensive shows in the fourth quarter of 2008.

The analysis uses syndicated research and tracking data from NetCosts System, a service of Tarrytown, N.Y.-based Sqad. The service compiles confidential data from agencies and in-house buying systems to help advertisers understand the unit-price relationship with each network and measure future costs.

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