Can I Annoy You for a Penny a Minute?

Networks are getting paid peanuts for distracting you

US TV advertising revenue is expected to reach $78.8 billion this year. The average person over 2 years of age in the United States still watches an amazing 29 hours and 47 minutes of TV per week. Which means, when you work it out, that’s just $0.18 in ad revenue per hour of TV watched.

TV Networks are even speeding up their programming in order to fit in more ads as prices fall and viewership dwindles. The average hour of cable television now has 15.8 minutes of ads compared with 14.5 minutes five years ago. The Wall Street Journal reported that “TBS used compression technology to speed up [movies and TV shows]” — this video on YouTube shows an example of this tactic with a Seinfeld rerun. For reruns and movies especially, cable networks have long rolled credits very quickly or cut TV opening sequences out entirely.

Just like online advertising, more ads pushed at the same audience may even be hastening the decline in ad revenue.

Marketers worry that an oversaturation of commercials will reduce the effectiveness of their spots and drive more viewers away from watching traditional TV to commercial-free streaming services such as Netflix and Amazon.

When I did a similar calculation in 2009, I came up with $0.24 per hour of TV advertising. That means a 25% drop over the last 5–6 years.

“It is a way to keep the revenue from going down as much as the ratings,” said a top executive at one major cable programmer. “The only way we can do it is to double down and stretch the unit load a little more.”
Critics say the practice is misguided. “They are trying to deal with a problem in a way that is making the problem bigger,” said Chris Geraci, president of national broadcast at media buyer Omnicom Media Group of the practice of increasing the commercial loads to make up for declining ratings.

By the way, despite the high penetration of DVRs (there are over 182 million DVR users of the total 284 million person TV audience), only about 10% of all TV viewing is actually time-shifted and potentially subject to commercial skipping (Nielsen).

So if you were to look at cable TV and assume 15 minutes of ads per hour, and our $0.18 per hour revenue figure, each minute of advertising is worth a measly 1.1c! That’s 1.1 cents per minute of your time. We can compare that to:

  • The federal minimum wage of $7.25 will earn you $0.12 per minute
  • Driving your car costs over $0.23 per minute
  • This person made $1.50 in 20 minutes, about $0.08 per minute on Amazon Mechanical Turk mimicking facial expressions

Makes me think — what’s a minute of my attention worth? More than 1.1 cents I hope.

And it makes me wonder of course whether on television, on my computer or mobile phone: where’s this advertising thing as a source of money to help create/produce content, really headed?

Sources: Techcrunch (Strategy Analytics figures), Nielsen Total Audience Report