A single TV advertisement has the potential to change the course of your business. However, most business owners are unaware of the real cost of commercials. This is your deep dive into the true cost of advertising on TV.
Advertising on TV is More Affordable Than You Might Assume
In general, the cost of a half-minute ad on a major nationwide TV network during the prime time hours of 7:00-9:00 PM ranges from a couple hundred thousand dollars to a million dollars. Opt for a regional or local ad and you’ll find the cost is significantly lower.
The cost of advertising on TV also differs by style of ad. An animated ad with elaborate special effects will likely cost more than a simple live-action commercial shot in a studio. Some TV networks provide bulk ad purchases or package deals that lower the cost even more. If you are considering placing an ad on TV, it is in your interest to review the merits of teaming up with a media buying agency to nab lower rates and the best possible deals.
Other factors that shape the cost of a TV ad include the financial strain of production and post-production. As an example, it costs money to buy the software necessary to edit an ad. Moreover, actors, script writers and the set itself also cost money. Add up the entirety of the costs to create and air an ad and you might find you need to budget hundreds of thousands of dollars.
National Versus Local TV Ads
Airing a commercial on a local TV station merely one time has the potential to cost as little as a couple hundred dollars. If the commercial is half a minute in length, it might cost several thousand dollars to air it. Airing an ad on a national cable network is likely to run you even more.
The length of the commercial, the network it airs on and the time slot of its airing also shape the cost. A 30-second ad that airs on national TV during prime time is likely to run hundreds of thousands of dollars unless it airs during a major event such as a sports championship broadcast.
Time of Year and Frequency of Airing
The more frequently a commercial airs, the more it costs to show that ad to the viewing audience. Even the time of the year plays a part in determining the cost of the ad. Presenting a commercial during prime time hours is more expensive than presenting an ad to an audience outside of peak viewing times.
In general, prime time viewing is the period of time after dinner on weekdays and before the 10 pm news broadcast. Inquire with TV networks to get a sense of the cost of airing an ad on local or national TV and you might find the cost is higher than expected. However, there is some room for negotiation. Float out a counteroffer to the station’s advertising manager and you might find he or she bites simply because ad volume has lightened.
TV CPMs
The cost per thousand impressions quantifies the amount of money spent to reach 1,000 TV viewers or households/apartments. Referred to with the acronym of CPM, cost per thousand viewers, might seem a bit confusing as the letter M doesn’t belong. M is representative of the Roman numeral for 1,000.
CPM compares the relative cost of advertising media ranging from print to radio and TV ads. CPM is typically presented in dollar figures, providing businesses like yours with an idea of what it costs to present an ad in front of 1,000 viewers. The calculation of TV CPMs is determined by dividing the aggregate cost of a commercial campaign by the total number of impressions, meaning the number of homes or viewers reached, then multiplying that figure by 1,000.
As an example, consider a half-minute ad that costs $20,000 likely to be presented before a million viewers. The CPM in this hypothetical situation is $20. When reviewing potential CPMs prior to placing an ad, be aware that they differ by network or program including the time of the airing on a specific day/week.
As noted above, airing an ad during a major event such as the PGA Championship’s final round will cost a pretty penny compared to airing an ad smack dab in the middle of a daytime news broadcast.
Once you have CPMs in hand, you can use them to compare the cost of running commercials on different programs and networks on both local and national TV. Review the numbers and you’ll have a better sense of the true cost of reaching your target audience.
Mind the Production and Distribution Costs
Producing an ad for local, regional or national TV costs money. Though you can outsource the labor for TV ad production to a specialist, doing so will cost more than it would cost to get the job done in-house. There is also the option of relying on your local TV station’s in-house production team to create and produce a commercial on your behalf though such a reliance is not cost-efficient.
Once the commercial is recorded and produced, it is time to distribute it. TV ad distribution places commercials on TV. Your overarching strategy shapes how ads are placed, the timing of their placement and the frequency of airing.
Even the channels for content distribution play a role in shaping ad success. TV commercial distribution also requires demographics to be accounted for. Everything from location to interests, gender and age are important in terms of the viewing audience.
When in doubt, rely on an experienced media buyer to zero in on target audiences for optimal distribution in accordance with viewing behaviors, commercial placement and other nuances.