TV Ad Rates (But Not Ad Revenue) Are Dropping
https://www.forbes.com/sites/bradadgate/2019/10/15/tv-ad-rates-but-not-ad-revenue-are-dropping/#2b5726ee119f
This article talks about how TV ad rates have been declining. For example, “in 2019-20 there were only four programs that $200,000 for a 30-second TV commercial.” In contrast, in “2015-16, there were ten programs that commanded a 30-second ad rate of over $200,000.” We can see that in just 4 short years the amount of advertisers.
The article claims that ad rates are dropping for these reasons: “the audience for most primetime programs on broadcast TV continues to decline” and “younger age groups are more likely to watch video content on devices.” However, ad revenue is not dropping for these reasons: declining viewing, broadcast networks adding more commercial time, premium live sporting events, and networks producing more original content.” This is because “declines in viewing can actually help the networks by building demand since advertisers have to buy more commercial time to build ‘reach.'”
This article relates to class because it talks about the pricing of ads which we have been discussing a lot with auctions and VCG procedures. It is also interesting to note that the article said that “led by Google and Facebook, ad revenue for digital media is expected to outpace traditional TV in 2019.” This is relevant because we have been discussing Google and Facebook and how they price their ads.