Like Horoscopes, AdWeek's Commercial Price Survey Is Fun, But Best Used For Entertainment Purposes

Categories: 1-Featured,Broadcast TV,TV Advertising

Written By

October 14th, 2013

On Sunday, AdWeek's Anthony Crupi had a piece on the annual pre-season commercial spot estimates based on surveys from media buyers. The estimates are based on pricing information from the upfronts and summer months before the season starts and  before there are any ratings for new shows. Unfortunately, Crupi and AdWeek muddy the issue of the driver of the pricing being adults 18-49 ratings, mixing in references to some show's total viewership. Of course looking at the per show prices themselves would make it clear that adults 18-49 ratings (and subsets of them) drive the pricing, but many people won't do that, and the innumerate among the TV media seemingly refuse to do so. That being the case, you should prepare yourself for misinterpretations of the information by the TV media, and desperate, and not so desperate, fans.

A few things to remember about the numbers:

  • They're pre-season estimates. For veteran shows they're certainly tied to last season's adults 18-49 ratings, because how they did last year is a pretty good predictor of where they will start this year. For rookie shows they are based on pre-season expectations only (likely related to the ability of the network's ad salespeople) they are not tied to the actual ratings received by new shows this season.  Put another way, there is no direct relationship between preliminary rookie show ad pricing and their initial ratings.
  • While ad buyers lock in a price per adults 18-49 ratings point for a given number of promised ratings points for a particular show, if the show does better than expected (i.e. gets higher ratings than were promised at the price) they get a deal.
  • The reverse is not true. If a show delivers fewer than the promised ratings points, the ad buyer gets make good ads later to make their purchase of ratings points whole. That's why it's nonsense when desperate fans cite those pre-season prices as futile hope for their failing shows. Regardless of the pre-season prices, if the show's ratings do not deliver as promised, the ad buyer gets the ratings points they paid for.

Here are a things that jumped out at me:

  • CBS Friday dramas are cheap! H50 ($58,455), Blue Bloods ($58,460) are among the cheapest shows in primetime among the "big 4" English broadcast networks. Certainly tied to their low adults 18-49 ratings. Will those numbers convince folks their high total viewership is irrelevant to their ad revenues? Unlikely. Like the Geocentrists, they can always come up with some sort of alternate explanation that explains their goofy worldview.
  • Subsets of adults 18-49 ratings matter. Vampire Diaries adults 18-49 ratings are noticeably lower than those of the CBS Friday dramas, yet its ad rates are very similar. That's because it delivers a higher proportion of the youngest members of that demo who advertisers will pay more to reach.

The rest of numbers are fun to look at,  you can explore on your own.

Note: I borrowed from Robert's post a year ago, but since I'm a big believer in recycle, reuse, repurpose, c'est la vie!

 

 
  • http://tvbythenumbers.com Bill Gorman

    “The price of the spots is not “retroactively reduced” if a show under delivers”

    I agree, my bad, post now edited.

  • http://tvbythenumbers.com Bill Gorman

    ““Like Horoscopes, AdWeek’s Commercial Price Survey Is Fun, But Best Used For Entertainment Purposes” < =Just like this site's RENEW/CANCEL index. People who live in glass houses shouldn't throw stones."

    You make that sound like a bad thing.

    This entire site is, of course, for entertainment purposes (and money for us).

    Why else would we be doing it?

  • David Howell

    Also, projections based on new ratings data > projections based on summer ad spending.

    The main thing this tells us is that skewing young really matters to advertisers. How else can Glee and Mindy be getting NCIS-level ad rates?

    It’s also interesting to see how the new shows shook up in expectations. The drop from TBBT to Millers is huge, but I guess that’s because it was figured almost all Millers viewers would have watched TBBT, and the former draws folks who don’t watch much else in network primetime.

  • AniMatsuri

    The networks keep narrow casting to the 18-49 demo that the advertisers find sexy. It’s no wonder the over all audience share keeps dropping each year for them.

  • Joey

    So if a show does a lot better in ratings than what they thought the price stays the same and the network is out of luck? What are the promise rating points for a typical show and is it rounded to a tenth of a point or a full point?

    How often are these prices set? Once a year? Four times a year? For example since sleepy hollow has done well when will the network benefit from an increase in ad cost?

    What is the point of sweeps when a shows rating can easily be determined and averaged every week?

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