Sooner or later, every entrepreneur is tempted by the allure of television advertising. Yet most will never seriously explore the possibility of promoting their product in a TV commercial because they assume it is cost-prohibitive. But is that really true? Is television advertising cost-prohibitive for small- to medium-sized business owners? The answer is, well, complicated.
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When pricing a television commercial, you need to weigh the costs of two separate things: (1) the cost of producing the commercial, and (2) the cost of airing it.
It has been estimated that the average cost of producing a 30-second national TV commercial is nearly $350,000. But before you panic, understand that like any other form of advertising, a television commercial can be as simple or as complicated as you want to make it. Not surprisingly, the cost to produce the commercial goes up as the quality and complexity of the commercial increases.
Small- to medium-sized businesses cannot afford to invest $350,000 in a single commercial. But, decent quality TV commercials can be produced for as little as $1,000 if you know where to look. The best place to start is with freelancers or small production agencies.
A word to the wise: Some local television stations may offer to produce a commercial for you at a highly discounted (or even free) rate if you agree to advertise on their station. Don't do it! The quality of these commercials is usually very poor compared to those that are professionally produced. A poorly produced commercial can have a highly detrimental effect on your television advertising campaign's effectiveness and may leave viewers with the idea that your company is cheap, cheesy, and out of touch.
The second cost involved in television advertising is the price you will pay to run your commercial. Commercial time is sold in 30-second spot blocks. The cost of a 30-second spot varies according to the number of viewers expected to be watching it.
The standard half-hour of television contains 22 minutes of program and 8 minutes of commercials - 6 minutes for national advertising and 2 minutes for local. National advertising is obviously your most expensive option, but even then the rates vary by Nielsen-rated viewership. Highly-watched programs can command rates in the millions of dollars. For example, a 30-second spot during the 2005 Superbowl sold for $2.4 million. Commercials during less-watched programs are more affordable, but the cost of those commercials may still run in excess of $100,000 per 30-seconds.
Most small- to medium-sized business owners find that local advertising fits better with their budgets and marketing goals. A 30-second time slot in a medium-sized market can be purchased for as little as $5 per 1,000 viewers, meaning that you could easily expect to pay less than $100 per commercial slot. Even cheaper rates may be available for off-hour programming.
The best advice is to avoid surprises by checking out how much it will cost to air your commercial locally before you shell out the money to have it produced.