Few things have such a cost variance as television ads. For most people, what’s not surprising is how expensive they can be. However, what may be surprising is how inexpensive TV advertising can be. (Having said that, the least expensive options may not be the best opportunities, either).
Overall, the cost of producing a commercial can run from as little as $1,000 if you are using stock photography and a simple voice-over, to upwards of hundreds of thousands of dollars if you need to have multiple cameras, hire union actors and filmmakers and are looking for a final look that reflects high production value.
Following are some fundamentals about TV advertising costs.
TWO MAIN COSTS OF TV COMMERCIALS
1) A TV commercial(s) needs to be produced
2) The TV ad needs to be shown to viewers
If you have a fixed budget, you can spend less on production and more on getting the message out on via cable TV or broadcast TV as much as possible. (Common for some local TV advertisers). Conversely, you could spend a bigger chunk of the budget on the production of the commercial and spend less on broadcasting the message numerous times. (Think Superbowl commercials).
For most advertisers, their budget is dependent upon an evaluation of short and long-term business objectives, as well as what they can realistically afford.
- Is the advertiser raising awareness about their brand?
- Is the advertiser calling attention to a special short-term promotion?
- Is the advertiser launching a new product or service?
- Is the advertising part of a lead generation campaign that involves TV as well as online advertising components?
Broadcasting costs can be as cheap as $15-$25 for 30 seconds in a small market, or thousands of dollars in large markets. But of course, you cannot buy just one spot. Hence, you’ll be buying a package of spots. So, even on the low end, for the least expensive placements, you’ll be spending a few thousand dollars, depending upon the market.
Furthermore, do you want to produce just one commercial, or a few? Multiple commercials do a better job of getting your message across. Not only can multiple commercials reduce viewer fatigue, but they can emphasize a broader or more complex message via bite-size pieces. (A cardinal rule is to “keep each message simple!”). Also, when planned well, producing multiple similar commercials may be achieved for a marginal additional cost, compared to producing just one.
NATIONAL OR LOCAL TV?
When we think “TV is expensive,” we’re thinking of national TV advertising. Although some of the biggest brands may spend several million dollars for a 30-second spot on the Superbowl, a more routine number would be in the six-figure range for 30 seconds on national TV. (And other than the Superbowl, one 30-second showing will not be meaningful. Many viewings are needed to make an impact).
Conversely, local TV can be surprisingly economical. If you are a local or regional company and you aren’t selling a product or service to a national market, then the decision is simple: buy local TV advertising.
A local commercial on a local station at 2:00 am might run as cheap as $5 per 30 seconds. However, 2:00 in the morning may not be the best time to advertise your product or service, even though it can be inexpensive. (It can be good for selling pizza if there is someone watching!)
Having said that, if you think your product or service might interest late-night viewers it could be worth running a split-test to see if it’s profitable.
TV COST VARIABLES
There are a number of factors that determine the cost of broadcasting a TV ad. Such variables include:
- The region it will be aired (some are more expensive)
- Time of day
- Day of week
- Quantity of expected viewers
- Length of the commercial (15 sec, 30 sec, 60 sec or a 30 min infomercial)
- How frequently the spots will run
In brief, the cost of broadcasting a 30-second spot mostly varies according to the number of viewers expected to be watching it.
To throw out some ballpark numbers on the low side, which would pertain to many small- to mid-sized businesses, a 30-second time slot in a medium-sized market can be purchased for as little as $15-$25 per 1,000 viewers.
CABLE VERSUS BROADCAST TV
Lots of people have a cable TV subscription. But anyone who has a television can get broadcast TV channels for no cost. This means there are more broadcast TV viewers.
Sidenote: For long-time cable TV subscribers (particularly younger ones) you may not know that broadcast TV is free. That’s because your cable TV may charge you a monthly fee for broadcast TV (which is just a way for cable companies to make more money). You can get broadcast TV for free, without cable, by using a TV antenna. So, if you ever cut the cord, you’ll still have access to broadcast TV, even without an internet connection.
Anyway, from an advertising perspective, there are key differences between advertising on cable TV versus broadcast TV.
Cable TV allows for more targeted advertising, as cable operators can target more specific demographics with greater accuracy than broadcasters. This means that advertisers can tailor their messages to specific audiences more effectively, resulting in higher conversion rates.
Another difference is that cable TV generally has lower ad rates than broadcast TV. This is due to the fact that cable TV audiences are typically smaller than broadcast TV audiences.
EXAMPLES: If you want your commercial seen by a broad local audience, then advertising on your local broadcast news station would be a good bet. If you have a home improvement product that can be sold to anyone in the country, you may want to consider advertising on a national cable TV show about home improvement.
Although cost may be the most important point for some businesses, more precise targeting generally results in a better return on ad spend (ROAS).
COMBINING TV AND ONLINE ADVERTISING
Nowadays, you can get more bang for your ad dollars by simultaneously promoting your TV commercial(s) online. In fact, some advertisers will have a more sophisticated online ad campaign in conjunction with TV, because there is more flexibility with online video advertising.
As an example, let’s say you have one (or more) TV commercials rotating throughout the day, targeted towards a specific geography and demographic. Perhaps this would be viewers in one town, or one county, or a region of the country (say, Southwest USA). You could also have the same spots showing online in the same geography as the TV campaign, but also be more precise about the demographics of the targeted audience: such as age, gender, parental status, household income, job categories, and interests.
Additionally, the online ads could feature similar messaging and picture elements but could be longer in time and with more variations. For example, you might have one or two 30-second TV commercials running simultaneously, but at the same time have 6-12 online video ads that are 15-seconds to several minutes in length. (There is also a strategy of promoting a series of 6-second “reminder” spots that rotate in series with longer “story” spots.)
The point is that both online ads and TV ads are found to work better when they are done at the same time, instead of doing each independently of the other.
There’s a lot one can learn about TV commercials and online video advertising as well as creating combined campaigns, but one final point worth emphasizing is that online advertising is an effective way to split-test elements of your TV commercial(s) before producing them. In other words, if your product or service has too many benefits to include in a 30-second spot, which do you choose to include? The solution is to test each element online and find which generates the greatest user engagement. For example, let’s say you have twelve points you want to communicate. That’s way too much information for a 30-second spot. One point is ideal, but if you have two or three simple points, that can be workable. But which of those points should be featured? Well, by running simple (and inexpensive) online ads for each of the twelve points (split tests) and comparing the results, we can find which points generate the most audience response and that will help inform the messaging of your TV commercial(s).
BEYOND THE MONEY
Of course, the costs of producing and airing TV commercials are important to any business. However, in many cases, the TV ads would be best if they contain The Three Essential Ingredients for Successful TV Advertising.
And bear in mind that a quantity of airings is vital to measuring effectiveness. If you run a commercial just once, it’s very unlikely you’ll see any increase in sales. Repetitive broadcasting generates the viewership familiarity that will make your message memorable.
Sometimes we offer special video advertising promotions. Visit our Skyworks Marketing home page to see what we’re offering this month.
EVEN MORE INFO
For more information, including concept, process, editing, distribution, advisement and examples, visit VIDEO & TV.
Avid hiker, bicyclist, motorcyclist and long-time advertising pro. Founder of Skyworks Marketing, Nonprofit Fire and Our Ventura TV (cable TV). One career highlight was working on a small team that built a business from nothing to over $100 Million in 3 years. Skyworks Marketing provides lead generation and video advertising services. We create custom marketing funnels that provide the highest-quality leads and sales.