What Factors Go Into the Cost of TV Advertising?

The masses are inundated with TV advertising daily, yet few know what it costs to air those attention-grabbing ads. Most people are aware that airing an ad during an event of social importance such as the Super Bowl has the potential to cost millions of dollars. However, less information about the costs of airing commercials on regular TV is publicized. A myriad of factors play a part in determining the cost of TV advertising. Here’s a quick look at those financial determinants.

Local Vs. National Audience

Advertising on national TV is more expensive than advertising on local TV. The difference in cost is the result of the audience size. A TV commercial aired to the entirety of the nation increases the return on investment more than a TV commercial aired on local TV. Furthermore, TV ads aired for exposure to specific towns or cities tend to cost less than ads placed on regional TV simply because the size of the audience is different. In the end, the number of potential impressions is the primary factor in determining the cost of TV advertising.

Length of Commercial

Break down the connected TV advertising statistics and you’ll find TV commercials tend to be 15, 30, or 60 seconds in length. Ads that are a full minute are the most expensive as they maximize viewer engagement. TV commercials that are 15 seconds in length are less expensive as they are displayed in front of the viewing audience for a shorter period of time. The 30-second commercial is the happy medium between the two extremes.

Timing is Everything

It is often said that timing is everything in life. This adage also holds true in the context of business, including advertising on TV. Advertisers are empowered to present ads to the public in the morning, afternoon, or evening. The cost to air commercials in each time slot differs accordingly.

In general, it is more expensive to air TV commercials during the peak hours of 5:30 pm to 10:30 pm as this is the period of time when people are most likely to watch TV. Daytime ads typically come in second in terms of air cost as most people are at work between the hours of 9 am and 5:30 pm.

The average person hits the hay around 11 pm, making ads that air late at night less expensive. TV commercials aired during the breakfast hours of 6 am to 9:30 am are the least expensive as this is the time of day when most people are sleeping or getting ready for work. The differences in cost for each time slot are significant. As an example, airing ads during the late peak hours of TV is upwards of eight times as costly as advertising during the day.

Weekdays Vs. Weekends

TV ads aired during the weekends tend to cost more than those that air during the week (except for those that air during peak hours Monday-Friday) as the average person is focused on work, school, and family obligations on weekdays. Furthermore, coveted higher earners with significant disposable income are more likely to watch TV on the weekends.

Frequency of Airing

The frequency at which the commercial airs partially determines the overarching cost of TV advertising for the business in question. As a business owner, it is in your interest to air your TV ad at a high frequency yet oversaturating the market can backfire. The more frequently the ad is shown, the more costly it will be.

Strive for a happy medium between maximizing viewership and frequency, connecting with a significant number of viewers intermittently at different times of the day/night and you’ll maximize the return on your advertising investment.

Keep an Eye on Production Costs

The number of potential impressions, frequency of airings, and time of day at which commercials air are the primary determinants of the cost of TV advertising yet the financial investment in the production of those ads also matter. Overlook production costs and your business might end up sinking a sizable amount of money into commercials that ultimately yields a negative return.

Research the cost of TV commercial production and you will find it is possible to produce a quality ad for as little as a couple of thousand dollars. A professionally produced TV commercial at the opposite end of the financial spectrum has the potential to set you back $50,000 or more in production costs. Everything from reserving a venue as a backdrop for the commercial to the cost of voice-over service and even featuring a celebrity or other well-known entity has the potential to drive up the costs of TV commercials to exorbitant figures.

Keep a close eye on your production costs while planning/creating your TV commercials and you’ll stand a much better chance of generating a meaningful return on your advertising investment.

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