Monday, October 22, 2012

Ad Rates 2012: Six Big Takeaways

It's that time of year again! The great Brian Steinberg over at Ad Age has released his look at the 30-second spot costs for primetime. As every year, I will advise not to read too much into them because they are very rough estimates. Then I will proceed to read too much into them! A lot of this is pretty repetitive with past years, but I suppose it's a good thing that there's some consistent logic. Here are a few of the big things I took away from this year's edition:

1. The Live+SD A18-49 ratings remain a solid indicator. I entered 63 shows into my ad rates spreadsheet, attempting to stick to shows that were either in the same timeslot or in a pretty similar timeslot situation. Those 63 shows showed yet another solid correlation of r = 0.93 when lining the ad rates up against their 2011-12 18-49 averages.* That's a bit worse than last year when it was r = 0.96, perhaps due to me slightly loosening the criteria to make the list, but it still suggests that the Live + SD ratings and the actual ad rates line up pretty well.

*- Not that there are a lot of people "debating" total viewers vs. A18-49 these days, but... correlating total viewers and ad rates, r = a much, much weaker 0.65.

As always, the most important "death of broadcast TV" metric is not necessarily ratings declines. It's how the ratings declines are lining up with the increases in CPM, or the advertising cost per thousand impressions. As long as those things are about the same, broadcast primetime is not really getting that much unhealthier, because the overall money's not declining. The articles that came out early last summer suggested a CPM increase in the upper single digits. My 63 shows outputted an average value per demo point of just over $53,000, which was up by 10% on last year's just over $48,000. That's definitely a bit higher than the 7-8% that the CPM articles suggested, which would've been almost exactly on par with the "league average" entertainment ratings decline of 7% last season. But it's not that far off. Perhaps my numbers are a bit too high because they put a little too much value on the extreme outliers, most of which are in the positive direction this year, like...

2. ...Fox animation, which remains the most "overvalued" lineup on TV. As usual, I'm not suggesting that the advertisers are wrong to pay so much more than their A18-49 ratings suggest. I'm just noting that they do it, and there's definitely a very good reason since this happens every single year. Lots of males, lots of 18-34s, lots of people who don't watch much TV elsewhere. Whatever it is, these shows continue to drastically exceed the "league average" for dollars per 18-49 rating point. This is something very much worth keeping in mind when considering Animation Domination in the relative landscape.

Of the five highest-valued shows per demo point, Fox animation takes four spots, with old faithful The Simpsons garnering a whooping 88% more dollars per demo point than the league average (diff).

A18-49 Price ($) $/A18-49 diff
The Simpsons 2.86 286131 99760.41 +88%
New Girl 3.23 320940 99387.87 +87%
Family Guy 3.03 276690 91434.91 +72%
Bob's Burgers 1.87 153115 82025.89 +54%
American Dad! 2.28 158546 69436.20 +31%

3. As bleak as the Friday/Saturday ratings picture looks, the ad dollars (still) look even bleaker. Of the bottom nine in dollars per demo point, seven air on those two nights, with an eighth (Rock Center) being another newsmagazine type of program in the same vein. Sadly, the people who stay in on Friday and Saturday nights are generally not the people the advertisers want.

A18-49 Price ($) $/A18-49 diff
Dateline Fri 1.32 39970 30386.55 -43%
Cops 1.27 43800 34578.95 -35%
Rock Center 0.88 30950 35259.49 -34%
CSI: NY* 1.62 58206 35880.41 -33%
48 Hours 1.15 41519 35983.13 -32%
Primetime: What Would You Do? 1.43 53600 37497.94 -30%
The Bachelor 2.57 98233 38229.42 -28%
Undercover Boss* 1.78 69100 38820.22 -27%
Cops (R) 1.19 46300 38989.47 -27%

*- The Undercover Boss rating averages include only the Friday numbers, though the show fell so much late last season that they are likely speculating even weaker ratings. That is likely true of CSI: NY as well, though I will note that the ad prices were based on the show airing at 8/7c. They might have been a bit higher at 9/8c.

4. Advertisers are big believers in the "sophomore bounce." Coming off one of the best years for new shows in recent memory, the top four "approximately same timeslot" year-to-year ad dollar gainers and five of the top seven are sophomore shows. (The other two, TBBT and Modern Family, went way up because their ratings went way up.) Now, a lot of this is probably just that the advertisers drastically underestimated the shows' potential when they had zero data points last year. Still, these shows were also consistently "overvalued" when comparing last season's ratings with the "league average" $/A18-49, including the not-pictured Person of Interest (+21%), which means it seems pretty likely they were being speculated upward even beyond what they actually did in season one.

A18-49 Price ($) $/A18-49 diff y2y
New Girl 3.23 320940 99387.87 +87% +156%
2 Broke Girls 4.25 269235 63349.41 +19% +62%
Once Upon a Time 3.27 203537 62191.86 +17% +52%
Scandal 2.01 139668 69338.72 +30% +51%
The Big Bang Theory 4.97 275573 55437.99 +4% +39%
Modern Family 5.05 330908 65526.34 +23% +33%
Grimm 1.53 71100 46415.43 -13% +28%

The bad news is that the fall 2012 has seen almost everything do about 10% worse than usual, and the sophomore bounces aren't really happening. I get that New Girl probably has a very young, advertiser-friendly audience, but it's hard for me to imagine that its upper-2 demos of the season to date are justifying $320,940 per spot.

5. Are advertisers bailing on reality and the CW? For some reason, it seems like everyone else who ever writes a blog post about ad rates only cares about Sunday Night Football and American Idol. This year, though, it's with pretty good reason, as the Idol ad dollars have taken a noticeable downturn. But Idol is far from alone in that regard. Many other unscripted franchises took massive year-to-year hits. There's a good reason for that: they took massive hits in the ratings. But in almost all cases, the ad rates drop is even larger than the ratings drop, which is pretty atypical in a world of overall CPM increases. That means they think these shows are gonna continue to collapse.

Three of the top four year-to-year decliners are on the CW. It's another situation where the ratings were really bad and yet it seems the advertisers are "overreacting," taking the ad dollars down much more than the ratings went down. Part of it, I'm sure, is projecting continued collapses; and they'd be right, especially if you look at the CDub's Monday this season. Another part might be that the highly prized even younger set (adults 18-34) is falling away from the net at an even quicker rate.

A18-49 Price ($) $/A18-49 diff y2y
Gossip Girl 0.59 37902 64514.04 +21% -62%
90210 0.70 42046 60065.71 +13% -46%
The Bachelor 2.57 98233 38229.42 -28% -45%
The Vampire Diaries 1.29 61887 47940.63 -10% -43%
30 Rock 1.54 76775 49971.89 -6% -42%
Celebrity Apprentice 2.02 86250 42683.45 -20% -41%
Dancing with the Stars Tue 3.06 136217 44462.52 -16% -37%
American Idol Thu 4.89 296062 60589.43 +14% -37%
American Idol Wed 5.33 340825 63943.01 +20% -32%
Dancing with the Stars Mon 3.28 160466 48906.44 -8% -31%

6. Advertisers whiffed on the new shows to a larger extent than usual. Again, I'll note that these are estimates of estimates and not really meant to be drilled into on a case-by-case basis. I always try to take more of a broad-strokes approach, and usually that kind of approach suggests the ad rates provide a decent picture of the new show spectrum. The flops always bomb a lot harder than the ad rates predict, but they usually pretty much get what the flops are.

This year? Not really.

Price Spec A18-49 diff
The Mob Doctor 168089 2.8 1.2 -59%
The Mindy Project 161740 2.7 2.1 -24%
Partners 161675 2.7 2.1 -22%
Nashville 142833 2.4 2.4 -1%
Elementary 141690 2.4 2.6 +10%
Ben and Kate 134300 2.3 1.6 -30%
The Neighbors 129883 2.2 2.3 +2%
Go On 128710 2.2 2.8 +30%
Last Resort 121132 2.0 1.9 -10%
666 Park Ave 120996 2.0 1.8 -14%
Vegas 115030 1.9 2.2 +11%
Revolution 97133 1.6 3.4 +107%
Animal Practice 84233 1.4 1.2 -14%
The New Normal 84183 1.4 2.2 +51%
Guys with Kids 77490 1.3 1.6 +25%
Made in Jersey 71074 1.3 1.0 -29%
Arrow 62995 1.1 1.3 +22%
Chicago Fire 60058 1.0 1.7 +67%
Emily Owens M.D. 43633 0.7 0.5 -32%
Beauty and the Beast 40699 0.7 1.0 +38%

To get the advertiser-speculated number ("Spec") I divide the ad rate by the $53,000ish "league average" per point. I also baked in a 10% year-to-year league average decline, which I probably should've done in past years too.

All you really need to know is that two of their top three new shows were The Mob Doctor and Partners. I can understand why they felt like Partners would do solid retention out of How I Met Your Mother. I'm not sure how in the world they felt The Mob Doctor was going to do the same ratings as Bones. But... there you have it.

One other trend is that they vastly underestimated the NBC new shows from top to bottom, with Animal Practice the only exception. Yeah, all these ratings will drop significantly as the season progresses, so the NBC estimates may end up not being that far off. But in the relative landscape it certainly seems like they've underestimated the performances of Go On, The New Normal, Guys with Kids, Chicago Fire and especially Revolution - the only real newbie success of the fall on any network.

1 comment:

Spot said...

Love the analysis. NCIS is a bargain, New Girl is a rip off.

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