Typing Faster

August 5, 2010

Mad Men: Most Successful Show With the Least Amount of Advertising?

Filed under: Future of TV, Mad Men — petertypingfaster @ 9:51 am

There was an interesting article in Advertising Age the other day. In it they take a look at the advertising revenue, or lack thereof, generated by Mad Men. Despite Mad Men‘s continued cultural influence, advertisers simply aren’t ponying up cash to buy spots with the show.

Airings of “Mad Men” took in only $1.98 million in ad revenue in 2009, according to Kantar Media. In 2008, the show nabbed just less than $2.8 million, and in 2007, approximately $2.25 million. These are paltry amounts when one considers that a 30-second ad in an equally buzzy program such as “24” on Fox cost between $200,000 and $280,000 as the show, off its peak, headed into its final season.

Compound this surprising lack of ad revenue with the shows anemic ratings (season four premiered with 2.9M viewers when you factor in the live +7 ratings, but ratings have since fallen back to 2ish million) and one can’t help but start to wonder why AMC keeps making the show.

Advertisers will “only pay so much” to be in high-quality programs such as “Mad Men,” said Kris Magel, exec VP-director of national broadcast at Interpublic Group of Cos.’ Initiative, because its traditional TV reach is limited. “Once that cost hits a ceiling, the network has to make a decision: Can they afford to continue to make the show for the amount of revenue it generates?” he asked. “Sometimes they do, because the halo generated for the network as a whole and its other programs outweighs the expense. And sometimes they can’t.”

The “halo effect” is probably the best explanation. Mad Men is a critical darling, and the longer AMC can keep it on the air the more that halo will burnish the rest of the networks offerings.

Of course the foreign distribution and DVD revenues don’t hurt either.

That broader “after-TV” audience keeps “Mad Men” coming back to the TV screen each summer. Just as the executives at Sterling Cooper Draper Pryce try to help their clients sell Lucky Strikes and Glo-Coat to the masses, so too do they attempt to bolster both AMC, which airs the program, and Lionsgate, the show’s production studio.

Each episode of “Mad Men” costs approximately $3 million to produce, estimated Sandra Stern, Lionsgate Television’s chief operating officer, owing to the show’s large cast and the producers’ attention to the smallest historical details. To cover part of its costs, Lionsgate depends on a license fee paid to it by AMC. The licensing cost of a high-end drama could come in between $2 million and $3 million per episode. Meanwhile, Ms. Stern estimates Lionsgate is able to secure “slightly north of” $500,000 per “Mad Men” episode by selling it to international distributors. Digital revenue, DVD sales and merchandising add more dollars to the coffers, though some of those monies are shared with AMC.

While the revenue that comes in isn’t on par with what a broadcast-network crime procedural might generate, she said, “We declare success and victory with a much smaller audience.”

Interesting.

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