The shop said ABC, CBS and Fox saw the average cost of a commercial unit fall between 9% and 12%, while NBC's average unit cost tumbled nearly 25%.
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 to measure future costs.
The first-quarter numbers show just how the writers strike has hurt network ad prices. During the fourth quarter of 2007, which included six weeks of the strike, the average network prime-time unit cost -- or the out-of-pocket cost for an advertiser -- rose nearly 4% to $141,376. CBS and Fox were flat, according to the analysis. ABC saw its unit cost rise 7.3%, while NBC saw its unit cost rise 3.4% from a year earlier.
Drop-off begins with first quarter
But first-quarter numbers show much more of a drop-off. ABC's average unit cost fell 9.5% to $122,509, down from $135,313 in the year-earlier quarter. CBS's average unit cost fell 11.9% to $112,641, down from $127,875. Fox's average unit cost fell 9.2% to $237,237, down from $261,275. And NBC's average unit cost for a prime-time ad fell 24.7% to $77,893, down from $103,449.
Will these figures have an impact on upfront bargaining? Not necessarily. Each year, networks and advertisers dither over the cost to reach a thousand viewers, or CPMs. Those figures are likely to rise; as ratings dwindle and audiences erode, it takes more airings of a commercial to reach an audience of a specific size.
Because ratings are down this season, the networks have held back a significant amount of inventory in order to satisfy the audience guarantees they had made to marketers. That pushed CPMs so high that many advertisers shifted dollars out of network and into other venues, causing actual unit costs to drop. Unit costs waned, at least in the fourth quarter.
Even so, suggested Steve Farella, CEO of TargetCast tcm, the numbers indicate that advertisers "are in a pretty good position" come May.