Friday, March 03, 2006

How Much is My TV Advertising Watching Worth?

I was wondering how much my time spent watching commercials was worth to the TV networks. So, I went back to my favorite Census .pdf on media information.

In 2003, on average Americans watch 1745 hours of TV a year, or if we assume 270 million Americans, 471 billion hours. The TV networks and cable operators sold $33.6 and $14.3 billion in advertising respectively for a total of $47.9 billion.

That works out to just about $.1/person hour. So my eyeballs are worth 10 cents on average to the TV network for every hour I watch. Put another way, if 15 minutes of every hour (or 25%) is commercials, watching just ads is like a $.40/hr job. Given their viewing pattern Americans watch about 8 1/3 hours of commercials a week, which would be worth $3.30.

My number might be a little low, as it assumes 270 million Americans, and the census numbers were only based on the over 18 crowd. Also, the commercial free TV such as HBO and PBS are included in here. Also over at, they put the number for broadcast advertising at $42.5 billion, and I can't really tell if that includes cable or not. If it doesn't, that number is much larger than the Census number.

Another way to look at this is to look at a particular show. The Wall Street Journal reports

A 30-second spot on this week's episode of ABC's "Desperate Housewives," which had 26.5 million viewers, cost $574,504, according to Nielsen Monitor-Plus.
If there are 15 minutes of commercials in this hour, that is 30 30 second spots for a total of $17.2 million. Divided by the 26.5 million viewers that works out to $.65/viewer for this hour of TV (or as a wage $2.60/hour to just watch the commercials). This is much larger than the other number. Not sure if this means advertisers will pay a big premium for the large audience/good demographics, or if my other number is low.

But, at $.65 a viewer, that is still much lower than the $2 that iTunes is selling the show for. I would think then that ABC would much rather have people download the show then watch it on TV. Or, if they buy the 22 episode DVD at Amazon for $40, that works out to a little under $2 an episode.

I wonder in the future with Video-on-Demand, whether people will be able to have the choice to watch TV with commercials for free, or without for a fee. Given the low hourly rate the advertisers are paying for my time, I think I would go with the fee version. But then again, I bet the advertisers don't want to allow that choice, because then the rich people/best potential customers will choose not to watch the ads. Then again, since all the ads seem to be for McDonalds, beer and credit cards maybe you don't want rich people anyway.

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