Audiences Flee Late Night, But Advertisers Stay Tuned

Broadcast in late night is a long way from the Johnny Carson monopoly days. Each of the big three networks is betting big on a name host and in the early stages of robust three-way competition, however cable, SVOD and time-shifting are siphoning off even more viewers.

As a result, the broadcast late-night daypart is bleeding viewers as badly as primetime this season. In some ways, the sophisticated social media and digital video arms of each network’s late-night operations are an acknowledgement that the glory days of live tune-in aren’t coming back. And yet, due to an extremely tight ad inventory situation, the networks have been able to get marketers to pay significantly more money for a dwindling audience.

The networks were able to garner sizable ad rates for late night inventory in the upfront because of strong demand. With ratings now down in many cases by double-digits compared to last season, doling out makegoods has tightened the scatter inventory even more. But there are still advertisers who want in, even at the inflated prices.

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All three of the broadcast late night show hosts—NBC’s Jimmy Fallon, CBS’ Stephen Colbert and ABC’s Jimmy Kimmel—have seen significant audience defections this season to date. So why are agency clients still interested in ad time at the end of the broadcast day?

Sam Armando, lead investment director at MediaVest/Spark, says despite the audience shortfalls, the three broadcast late night shows, when their audiences are combined, still “have plenty to offer.”

He explains, “Kimmel has a higher concentration of Hispanic and African-American viewers. Colbert has a high concentration of men, and Fallon has the largest and youngest audience. In addition, reach is built by including all three due to the loyalty of viewers watching each show.”

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While there are some advertisers who want to steer clear of broadcast late night because of the perception that audiences are older, that’s not necessarily the case if compared to broadcast primetime. If brands are looking for younger in late night, cable is the place to go, but cable late night talk show audiences are smaller than the broadcast shows. And the broadcast late night median age audiences ranging from 54 to 59 are in the ballpark of most broadcast primetime shows.

So reaching nearly 8 million combined viewers, including 2.5 million in the 18-49 demo, if they buy all three shows, makes it a bit more attractive for marketers. Still, buyers don’t want to be paying inflated rates for total audiences that are still a fraction of the size of broadcast.

“Late night show ad rates are still cheaper than primetime but are rapidly gaining,” says one media agency buyer. “And right now because there is a limited amount of inventory compared to primetime, the networks can hold out and charge what they want. Late night has gotten the largest percentage rate increases in the upfront in the past few years. But this overwhelming demand by advertisers at some point will abate. And brands will start to plan around broadcast late night and put dollars elsewhere.”

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Thus far this season, late night leader Jimmy Fallon’s Tonight Show on NBC is down some 340,000 viewers, averaging 3.14 million, nearly a 10% decline compared to the same period last season. And 18-49 and 25-54 demo viewers are down almost 13% apiece.

Fallon, however, is still by far the top draw and has maintained his media age audience from last season at 55, lowest among the three early shows airing at 11:35 p.m. ET.

Second-place Stephen Colbert’s Late Show on CBS has had the smallest percentage total viewer loss of the three—down just over 4% to 2.59 million—but has lost the most 18-49-year-old viewers on a percentage basis with the demo declining 15.8%. That loss, however, is logical, since fourth quarter last season was when Colbert premiered as David Letterman’s successor, so early ratings were higher than usual.

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Colbert’s median-age audience, due to the large number of 18-49 viewer defections, has increased by a year to 59. However, Colbert this season is drawing viewers pretty much on par with Letterman in his final season as far as demos and total audience go.

Kimmel continues to be mired in third place, down 8% in total viewers to 2.21 million and down more than 13% among 18-49s and 14% in 25-54s. Kimmel is second among audience median age, averaging 57, same as last season.

The “late-late” battle between NBC’s Seth Meyers and CBS’ James Corden still has Meyers leading in viewers and demos, although Corden has cut the gap this season. Corden is also the only late-/late-late-night show that has gained viewers this season. He is up about 3% to 1.28 million viewers. That’s compared to Meyers, who is down 5.5% to 1.51 million viewers.

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In the demos, Corden is down 1% among viewers 18-49, but up 3.9% in viewers 25-54 to 527,000. That compares to Meyers who is down 8% in viewers 18-49 and almost 11% in viewers 25-54 to 667,000.

Corden has held his median age audience at 55, while Meyers edged up a year to 54.

Colbert and Corden were the only late night broadcast programs to show increases in this year’s November sweeps compared to last year, with Colbert’s Late Show averaging 2.62 million viewers, up 4% from last year, and Corden’s Late Late Show averaging 1.29 million viewers, up 9%.

Colbert also got a one night boost on Dec. 6 when Vice President Joe Biden visited the show and drew an audience of 3.39 million viewers, its best Tuesday night in viewers since Oct. 6, 2015.

However, the large audience beat Jimmy Fallon that night by only 80,000 viewers.

So why is broadcast late night down in viewership? Agency execs offer a number of reasons. And unlike primetime, it has nothing to do with really bad shows.

First, as more primetime viewing is done on a delayed basis, live audiences only have so much time to watch the shows they record. Many of them are doing so during the 10 p.m. hour and that has caused the networks live viewers in that time period to dwindle. If viewers are not watching one of the Big Three broadcast networks at 10 p.m., they are probably not staying on for the local news and then the late night shows that follow.

MediaVest/Spark’s Armando believes recorded viewing could be taking place not only at 10 p.m. but also continuing into the late night shows.

“The 10 p.m. to 11 p.m. hour is down across all three broadcast networks, which could be due to waning interest in those programs, but may also be a case of people viewing what they recorded earlier,” Armando says. “Most of primetime’s highest-rated shows air at 9 p.m., including This Is Us, Empire and Modern Family, and people may be time-shifting during the 10 p.m. hour, as well as during the late night daypart.”

Brian Hughes, senior VP, audience intelligence & strategy at Magna Global, agrees. “At least some, and possibly most, of the declines in broadcast late night are due to the general fall-off in linear TV viewing in favor of connected device usage,” Hughes says. “Late night may be particularly vulnerable to today’s on demand ecosystem because it can be impacted both by audiences viewing prime content on a delayed basis within the daypart itself, and the ability to see particular clips or sketches from various late night shows at a later time rather than watching the entire show.”

The presidential campaign this season did not help the late night entertainment shows that had to compete with the cable news shows in late night. But late night audiences were also down last fall overall when there was no presidential campaign.

As for Letterman’s departure in the daypart, Colbert is pretty much drawing the same audience his predecessor did. However, some buyers continue to be disappointed that Colbert did not bring his younger viewers from his Comedy Central late night show when he moved to CBS. In fact this season his median age audience got even older. His 25-54 audience this season has risen by 3.9%, while his 18-49 audience is down close to 16%. Although one buyer opined that political audiences tend to be older and maybe Colbert drew more of that viewership this fall.

One agency exec, who did not want to speak for attribution because of the sensitivity of negotiations, believes Colbert has kept many of the Letterman viewers but lost most of his fans from Comedy Central. He alienated them, the buyer said, because he did not maintain the same persona he did on that show.

But most agency execs believe CBS can be happy because Colbert is mirroring the viewership levels that Letterman had in his latter seasons.

Some ad buyers, however, point to Corden’s buzz with Carpool Karaoke and wonder if he might be better suited as Late Show, rather than Late Late Show host.

However Armando says a lot of Cordon’s buzz has been from viewers who’ve watched his Carpool Karaoke skits on social media. And while he has seen a slight increase in viewership since he began doing those skits last season, Armando doesn’t think it would be enough to pull in an audience that surpasses Colbert’s if he replaced him.

“If CBS put Corden ahead of Colbert initially, we all would have scratched our heads and questioned that decision,” Armando says. “Corden’s skits work much better socially and his popularity has grown because of them. The question now is, has Corden’s popularity soared enough that his audience would rise about 60% if his show was on at 11:35? That is what would be needed to match Colbert’s rating. And also while Corden has done a good job in growing female audiences, male views have not caught on at a similar rate.”

Buyers say if they are paying more for broadcast late night, they need to find ways to better monetize it. With broadcast primetime they can get more value with delayed viewing and VOD telecasts, but few viewers are watching the live late night shows in delayed viewing mode and they are not shown on other streaming platforms.

Buyers say while clips and highlights from skits on Fallon, Colbert and Kimmel get sizable viewership on YouTube, those highlights aren’t streamed with commercials in them. And many viewers wind up skipping the actual shows and going to the streaming platforms just to see the highlights.

Corden’s “Carpool Karaoke” segments are a prime example. While their popularity may have brought him a slight audience gain this season, way more viewers are catching those on YouTube and other streaming sites than they are live.

A recent segment on Fallon’s Tonight Show with the rock group Metallica drew more than 30 million viewers to the streaming of the bit online, but there was no advantage directly to the show’s advertisers.

“As total audience buying comes into play in the upfront, if the networks want to charge premiums for late night, they have to find ways for our clients to better monetize those buys beyond just the traditional TV platform,” one buyer says.

Meanwhile Armando says the late night shows need to continue to grow the use of brand integrations.

“The key for late night may be what they permit brands to do beyond the traditional ad unit,” Armando says. “Integrations and brand involvement offer an element you don’t get in primetime, especially with the opportunity to do it live. Then those brand integrations can be streamed beyond the initial air dates via social media platforms.”