The Improbable Economics Of Linear TV Addressability

By: AdExchanger
September 26th, 2016

…In the US, TV inventory is nested, with advertisers able to reach audiences at a programmer level, through syndication, spot TV and local zone cable. On average, there’s about 14 minutes per programming hour of commercial ad time across US linear TV.

With the sell-side value proposition of addressability achieving higher CPMs than a typical 30-second avail, we have to assume that addressable campaigns must exceed the CPMs realized within the spot TV marketplace. Otherwise, what’s the point?

In Q1 2016, the market intelligence firm SQAD projected the adult 18-49 high-average prime-time CPM across all 210 designated market areas was $82. In that same quarter, Nielsen demonstrated in its Total Audience Report that 276 million adults 18 to 49 years old in the US spent an average of about 54 hours watching live and time-shifted linear TV each month.

If we assume that at least 65% of that time – 35 hours – was spent consuming ad-supported TV programming, the average 18- to 49-year-old saw the equivalent of 982 30-second ads a month (14 minutes x 35 hours) during the first quarter of 2016. Annualized, that’s nearly 12, 000 ads per person; when multiplied against a cumulative tuning audience of 276 million people in demo, the linear TV audience capacity for US adults 18 to 49 years old stands at roughly 3 trillion impressions…

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