In Depth

Leno’s Revenue Potential Unclear

Jay Leno’s “The Tonight Show” is a cash cow in late night. But just how much advertising revenue it will generate in prime time is anyone’s guess, media buyers say.

According to TNS Media Intelligence, “The Tonight Show” generates about $926,000 in ad revenue every night for NBC. Spots cost $50,877 for 30 seconds and advertisers pay $33.32 to reach 1,000 viewers (CPM) in the adults 18 to 49 demographic, based on C3 commercial ratings.

NBC’s prime-time programming in the 10 p.m. time slot generates an average of $2.3 million Monday through Friday night, ranging from a high of $2.6 million on Monday to a low of $1.5 million on Friday, according to TNS. Prices for spots range from $124,353 for 30 seconds on Monday to $70,239 for the same unit on Fridays. The CPM averages $34.87.

Until NBC provides more details about the show’s format, buyers are reluctant to estimate how big an audience Mr. Leno will draw in prime time. And that’s the most important factor in figuring ad prices and revenue.

“I think there will be a high curiosity factor at the outset, so if I was advertising, first month would be a good bet,” said John Swallen, senior VP at TNS. “But over the long haul, it feels to me that the ratings potential for this kind of program is going to be somewhat lower than the ratings potential for a conventional scripted or reality entertainment prime-time show.”

With lower production costs, NBC might ultimately make a bigger profit with Leno in prime time, “but if you’re looking at it in terms of ad revenue potential—just how much ad money they could generate—I would expect this is going to come in below average, as compared to an average prime-time hour on the network,” Mr. Swallen said.

Shari Anne Brill, senior VP at Carat, expects Leno’s show to perform differently from night to night, depending on its competition.

“I doubt they would guarantee a Monday-through-Friday average,” she said.