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Abstract
Purchasing of television advertising time is an annual event involving extensive negotiations, multi-show packages, and billions of dollars. Nevertheless, research in the area of television commercial time pricing is limited in the marketing literature. This study is an econometric analysis of pricing by the three major networks for commercial time within top-rated prime time programs from 1984–85 through 1987–88. Our analysis confirms that prices of prime time commercials are positively related to the exposure of the commercials. Additionally, the analysis shows a substantial degree of heterogeneity among the three networks in their pricing activities. For the period studied, NBC appears to be the network leader, and was able to maintain a higher marginal price per audience exposure than either CBS or ABC.
