Pssst, want to buy a prime-time commercial? Here's the menu.

Healthcare costs may be on the rise, but it's getting cheaper to advertise on medical dramas.

Every fall, Advertising Age tries to figure out how much a 30-second spot (what civilians call commercials) costs on every broadcast television prime-time show. It makes for fun reading, although even Advertising Age warns that the numbers should not be taken "as gospel."

But the figures do provide a good barometer of the ad market and what shows are worth the most. For example, ABC's "Grey's Anatomy" is still the most expensive drama to buy a commercial on, but the cost fell to $240,462 this season from $326,685 last season. Fox's "House" is averaging about $184,000 this season, a big drop from last season's $260,179.

Of course, with the rare exception of the Super Bowl, the finale of "American Idol" and various award shows, most commercials are bought in bulk and not on an individual show-by-show basis.

So how does Ad Age determine the price of a commercial for a particular show? The publication's TV editor, Brian Steinberg, explained that major media buyers are surveyed about how they allocated their clients' commercial buys across a network's schedule, and from there a value for a particular spot can be determined.

Now, this survey is done based on spending before the season starts and before anyone knows what's going to be a hit or not. A spot on "Glee" costs less than several other new shows that are not as strong in key demographics. That will change in the scatter market, which is what the industry calls the week-to-week sale of advertising time.

The most expensive program to buy a spot on this fall is NBC's Sunday night football game, at a cost of almost $340,000. Even that is off almost $100,000 from last season.

And that will change once we hit January and Fox's "American Idol" comes back. Commercials for that hit are averaging between $360,000 and $490,000, depending on the episode. The closer to the finale you want, the more you have to spend.

-- Joe Flint

Photo: "Grey's Anatomy." Credit: Scott Garfield / ABC

Anheuser-Busch taking over 'Saturday Night Live'

Maybe if we drink enough the show will actually seem funny.

As part of its push for Bud Light Golden Wheat, Anheuser-Busch has cut a deal with NBC Universal to be the exclusive sponsor of this week's "Saturday Night Live," which is being hosted by Gerard Butler and features Shakira. That means every commercial on the show will be for Budweiser. Lets see how many times some Bud shows up in skits as well. Maybe there is a drinking game in it!

Furthermore, Anheuser-Busch is going to host viewing parties across the country to hype the brew. No word if Comcast's Brian Roberts and Steve Burke will be attending the one in Philadelphia.

As a perk for those of us having to endure this onslaught of Budweiser, "SNL" is also going to feature a series of never-seen clips from the show's 35-year (yes, 35 years) history.

BTW, Bud Light Golden Wheat hit stores Oct. 5. Seems a little plug is the least we could do for providing us with such good material so early in the morning.

-- Joe Flint

Ad spending 2009: Even media is buying less media

How brutal is the advertising market? Even big media isn't spending as much on big media.

Advertising tracker TNS Media Intelligence this morning issued the grim news that ad spending plummeted 14.3% to $60.87 billion during the first six months of 2009 compared with the first half of 2008. The second quarter of 2009 became the fifth consecutive quarter to post year-over-year declines.

Among those cutting back on advertising was media itself. Walt Disney Co., News Corp. and Time Warner Inc. all reined in ad spending in the first half of the year. Spending by Time Warner was down 11.1% to $574.3 million; Disney expenditures were down 11.7% to $517.6 million; and News Corp. cut its ad spending by 6.9% to $672.3 million.

The cuts were partly because their movie studios released fewer films in an effort to lower marketing costs. TNS said that General Electric Co., which owns NBC Universal, was the only media firm to boost its advertising budget for the first six months of 2009, raising it by 5.1% to $548.3 million.

Not surprisingly, automotive, financial services, real estate, tourism and retail businesses took a cleaver to their marketing budgets. Even spending to promote basics such as food and candy was down. Oh Henry!

Newspapers, magazines, television and radio all felt the pain of a dismal first half. Newspaper ad spending was off 24.2% compared with the first half of 2008; radio spending plunged 24.6%; television spending (including national network, local station, syndicated and Spanish-language outlets) was off 10%; magazine spending dropped 20.9%; and billboards and other outdoor media saw their ad revenues tumble 15.7%. 

Meanwhile, Verizon Communications Inc. surpassed perennial leader Procter & Gamble Co. to become the top advertiser by shelling out $1.19 billion during the first half of the year. Procter & Gamble, which cut its ad spending by 20%, came in second place at $1.18 billion. P&G pared its television ad budgets by a whopping 30% but it spent the same on magazine ads, TNS Media found.

The only growing media sectors were Internet display advertising and free circular inserts in newspapers. Internet display advertising increased 6.5% compared with the first half of 2008 while newspaper insert spending climbed 4.6%.

"The market has been steadily tracking at around 14% declines for several consecutive months and this represents billions of lost revenue," said Jon Swallen, senior vice president for research at TNS Media. Swallen said that early data from the current quarter "hint at possible improvements for some media due to easy comparisons against distressed levels of year ago expenditures."

-- Meg James

Big media's new research coalition's mixed message

It's not an academic exercise. No, it's a research foundation. It's a competitor to Nielsen. No, it's not a slap at Nielsen at all.

Confused? We are too. The conference call detailing the media industry's creation of the Coalition for Innovative Media Measurement (see our earlier post) sent out a few mixed messages. Let's hope their efforts to develop new and better ways to measure ratings are a little clearer.

NBC Universal Research President Alan Wurtzel opened the call, saying the coalition  was "neither a trade or academic organization" as all the members have "skin in the game" and it's "time to take our future into our own hands."

Pretty tough talk. Yet a few minutes later Wurtzel went out of his way to say the purpose of CIMM was not to build a better Nielsen.

"This is not about establishing a competitor to Nielsen," Wurtzel stressed. In fact, he added, this was "never really about Nielsen."

So lets get this straight. A group of media giants including News Corp., NBC Universal, Walt Disney Co., CBS, Viacom, Time Warner and Discovery are getting together with Procter & Gamble, AT&T, Unilever and several major advertising agencies to do research on how to better track media consumption -- and it's not about Nielsen?

CBS's Dave Poltrack said the purpose of this organization is to "support innovative research," but that if anything is actually developed for commercial use, that would be done independent of the coalition. 

Missing from the list of industries involved is new media (no Google, no Yahoo), which is interesting because one of the things this organization stressed is that it wants to find a better way to measure media consumption online and on mobile devices. That doesn't mean the group won't be adding new members who are able to pony up the entry fee. The companies involved would not say how much they have raised in funding but indicated it was in the seven figures. The entry fee to be part of CIMM is not seven figures, however. 

This is not the first time there have been efforts to build better systems to measure audiences, and it certainly is needed. Nielsen has had lots of issues over the past few years with its measurement systems, and if a bunch of big companies getting together can help encourage them to shake things up, that's not so bad. In fact, CIMM is not against having Nielsen join its efforts if it wants to apply for membership.

A Nielsen spokeswoman said the ratings firm "shares all of the objectives" of the coalition and "has always worked closely with clients to bring innovation to the industry." The company said it looks forward to working with CIMM and would like to hear more about its plans. 

So would we.

-- Joe Flint

Photos: Top right: NBC's Alan Wurtzel. Credit: NBC Universal. Bottom left: Dave Poltrack of CBS. Credit: CBS

AMC moves back to Hollywood

Start popping the popcorn: AMC Entertainment, the nation's second-largest theater operator, is moving back to Hollywood.

The Kansas City, Mo., chain, which operates 307 theaters, said Thursday it will open a new film office in Century City to strengthen its ties to the studios and develop alternative entertainment, such as live broadcasts of sporting events. The company had closed its film office in 2005 in a company-wide consolidation.

"We are pleased to reestablish a physical presence for AMC's film team in L.A.," said AMC Chief Executive Gerry Lopez. "The addition of new talent and the relocation of key AMC film associates will re-energize our strong industry relationships, which are integral to our programming expansion strategy."

Robert J. Lenihan, president of programming, will oversee the new office with a staff of five in Los Angeles. The new office will be close to one of its flagship theaters, AMC Century City 15.

In February, AMC tapped Lopez, a former Starbucks Corp. executive, to become chief executive. He replaced Peter Brown, who retired after the privately held company sustained heavy losses  and dropped plans for an initial public stock offering. AMC and other theater chains have been enjoying a strong year at the box office but face long-term challenges to boost attendance and draw younger audiences.

-Richard Verrier

Networks' big advertising gamble on economic recovery may not pay off

As my colleague Meg James reported today, the upfront market where the majority of television commercials for the fall season are sold, is finally winding down.

Normally done in a fury over a weekend in May, this year's bad economy caused the deal making to move slower than the 405 on a Friday afternoon. The networks didn't want to lower their prices and media buyers knew they couldn't go back to their clients without substantial cuts in ad rates.

In the end, the networks blinked. The five broadcast networks will end up selling about $7.5 billion in commercials for primetime shows, compared to $9.2 billion last year. However, an apples-to-apples comparison is difficult because, unlike previous upfronts where the networks would sell as much as 85% of their commercial inventory, this time they sold between 65% and 70%.

The networks are betting that the economy will improve in the fourth quarter and early next year, at which point they wil be able to hike ad rates again. 

One problem. If they all held back, then even if the economy does improve, it will still be a buyer's market because there will be so much inventory available for sale. One of the ironclad rules of economics is that an abundance of supply drives down prices.

Sorry to ruin their weekend.

-- Joe Flint

Television ad sales winding down, down, down

Broadcast television networks typically sell the bulk of their advertising for the coming season in a handful of days in late May and June. But this wasn't a typical year.

With the sour economy, declines in consumer spending and sagging prime-time rankings, network sales executives have had to work overtime this summer to close deals with advertisers. For more than a month, talks were stalled because advertisers were demanding steep cuts in pricing -- and the networks initially were refusing to give in. Several weeks ago, the impasse melted and the networks started to slowly ring up sales with major advertisers.

Until now, none of the networks nor the advertising buyers was publicly discussing the results of the closed-door negotiations.

However, this afternoon, the No. 1 network, Fox Broadcasting, broke its silence and said it was nearly finished with its "upfront" sales and that it was pleased with the results. 

"As the upfront selling season winds down, Fox Broadcasting has achieved its prime-time revenue goal," sales president Jon Nesvig said in a statement.  The network declined to provide a dollar amount for the business it wrote this summer or say whether its "revenue goal" included shaved ad rates.  

Fox conceded that it did not sell as many prime-time commercials this summer as it has in the past. That is an indication that the network held back commercial time rather than slash prices simply to make sales and move inventory. The network is betting that its new fall shows will perform well in the rankings, thus allowing the network, owned by Rupert Murdoch's News Corp., to command higher prices later on in the year.

In fact, Fox is being a tad bullish.

"While the overall economic climate was difficult during the first six months of 2009, the short-term market for national broadcast time remained strong," Nesvig said. "With a broader economic recovery seeming to take hold, we are very comfortable in our marketplace position for next year."

Wall Street analysts have predicted that the upfront sales season would end with networks booking 15% lower revenue than last year's slightly more than $9 billion in sales of prime-time ads.

 

— Meg James 

IRS has questions about buying ad time (and they're asking us)

Who does the Internal Revenue Service call when it wants to know how the television business works?

Apparently journalists.

Several Los Angeles Times staffers got an e-mail from the IRS asking questions about how commercial time is sold. Maybe they're poking around the upfronts to see what's taking so long.

Among the things the IRS wants to know: Do advertisers choose what time their ads air? (Sometimes, but not usually, as most ads are sold across a network's schedule.) And, once a buyer purchases a commercial, how certain is it that the ad will air? (Reasonably certain, although there can be preemptions for news, and an ad might be pulled if it would appear to be insensitive in light of a current event).

We don't know who or what the IRS is probing. A spokesman wasn't particularly interested in telling us. But the e-mail, from the Los Angeles office of the chief counsel, says the agency is working on a case that involves how commercial time is sold. I hope they don't audit me now for revealing this.

-- Joe Flint

Matt Weiner is no Don Draper

If Don Draper were Matt Weiner's boss, he'd can him on the spot.

"It's about selling, kid," we can hear the cool creative director lecturing the self-important, idealistic writer, grinding his cigarette in the ashtray, exasperated at the obviousness of the wisdom he was trying to impart. "And selling puts the vegetables on the table. You don't like to eat?"

That's how we imagine it.

In fact, Weiner, the creative force behind AMC's "Mad Men," which follows the lives of ad man Don Draper and his cronies at Sterling Cooper in the Swinging Sixties, won a battle this week with the cable network over the amount of commercials in the program. AMC wanted to shoehorn two more minutes of commercial time to the show, which would have meant cutting some of the dramatic narrative from each episode.

Although that sounds bad (who wants more commercials?), keep in mind that "Mad Men" has fewer commercials than just about any other hour-long show on TV. The show usually runs 12 minutes of commercials and promos, compared with the 14 to 16 minutes on other cable shows and 18 minutes on broadcast shows. In other words, Weiner has it pretty good at AMC.

Weiner didn't see it that way. A very hands-on creator, he fought back and got AMC to instead let the show run longer than an hour with the additional commercials so that he wouldn't have to trim dialogue and scenes from the show. Of course, AMC and cable operators will have to find a way to insure that the show's post-11 p.m. end time doesn't screw with our TiVos and DVRs. Often when a show runs over, the very end is cut off by the recording devices (at least this is our experience).

Fans of the show are no doubt cheering Weiner on and we get that. But AMC wasn't being greedy when it wanted to insert a few more commercials spots to the show. Critical raves and awards do not automatically translate into viewers and dollars. In its second season, "Mad Men" averaged 1.5 million viewers, a great number for AMC, but paltry compared with other dramas on cable such as TNT's "The Closer," which drew more than 7 million viewers in its premiere last week.

In terms of ad revenue, our Madison Avenue source tells us a 30-second spot on "Mad Men" can go as low as $10,000, while a show like USA's "Burn Notice" gets $21,000. In other words, "Mad Men," a show about advertising, doesn't generate a lot of ad dollars for AMC. In fact, it's a loss leader (we can almost see on Roger Sterling's face a look of disgust bordering on revulsion upon hearing the words "loss leader").

And the show has become even more costly since it premiered a few years ago. Lions Gate, which makes "Mad Men" for AMC, signed a two-year deal with Weiner (after an ugly negotiation that had the studio thinking it might have to find a new show runner) worth $9 million, according to Variety's Cynthia Littleton. Some of those costs were passed on to AMC in the form of a higher license fee.

It's real easy to beat up on the network anytime there's an issue with a creator, but in our humble opinion Weiner should stick to creating and let the Don Drapers of the world do their part to make sure the show does indeed go on. Got it, kid?

-- Joe Flint

Top photo: Jon Hamm as "Mad Men's" Donald Draper. Credit: Associated Press 

Bottom photo: "Mad Men" creator Matt Weiner. Credit: Anne Cusack / Los Angeles Times

I got those upfront blues

A scathing and hilarious take on what's going on in the ad world set to Don McLean's classic "American Pie." Enjoy! Unless, of course, you are a network executive, in which case it's never too early to hit the martini bar. The author prefers to remain anonymous but goes by the pen name by "L McDuff" on his YouTube bio.

-- Joe Flint