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How to Buy TV Advertising on a Budget

For small businesses, here's the reality of TV -- the medium can be an affordable messenger.
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Television advertising is often bypassed by small and mid-sized businesses in favor of print, radio, and even Internet. They often view TV as too expensive and may believe that only large national companies can advertise on it. While that may have been true a generation ago, the advent of cable television and the explosion in the number of stations and programming has made TV an advertising medium that is effective for even local businesses -- a medium that businesses of virtually any size can afford.

"If you're a local firm, such as a jeweler, you don't need to run ads nationally," says J. T. Hroncich, managing director and principal of Capitol Media Solutions, an agency that helps companies buy advertising. "Cable TV is very reasonable. As opposed to taking out an ad during American Idol on broadcast TV, you can take out a local ad on a popular cable show, such as Top Chef. It all depends on who your target market is."

The following article will review why TV is a good advertising medium, how to target your TV ads, and how to buy TV advertising on a budget.

Dig Deeper: TV Spots for Small E-Commerce Firms

How to Buy TV Advertising on a Budget: Why Buy TV Advertising

For certain types of small or mid-sized businesses, television may be a better advertising medium than any other. "Television is an attractive use of an advertising budget since it maximizes the reach of a commercial message and provides the opportunity for your potential customers to visually understand your service or product," says Lori Weston, a freelance media professional working in the Boston market with media buying service, Media Period, of West Bloomfield, Michigan.

If your product is visually appealing -- such as an automobile or a Snuggie or diamond jewelry -- TV advertising may showcase that product better than other media, such as radio. "If you feel your product is better suited to people seeing it as opposed to hearing about it, then TV makes a lot of sense," Hroncich says.

What's more, television is "sexy," Weston says. "Television is captivating and holds an audience's attention," she says.  "Additionally, if your ad fits in well with the programming where it's advertised, it could prove to be an outstanding tool in your marketing efforts."

Typically, an effective advertising campaign that includes TV advertising is expensive and complicated; however it does not always need to be.  With some patience, good negotiating skills, and an open mind you can buy TV on a budget.  

How Much a TV Ad Will Cost
Before jumping in, you need to understand your budget for advertising. Be sure to include the costs associated with producing your commercial. You can produce your ad independently or with a television station, but costs can vary wildly. "It really depends on what you want," Hroncich says. "If you're a family-run business and you want to film a 30-second spot that shows a screen shot of your dinner special, it's not going to be very costly. But if there are actors employed, that will cost you more." He estimates that TV commercials can cost anywhere from $2,500 and up.

Then there is the cost of the advertising campaign. You typically don't want to spend your advertising budget all at once. You want to air it with a bit of frequency so that people will see it a number of times and it reaches a larger percentage of your target market. Typically, television stations will accept spot lengths of 10, 15, 30, and 60 seconds, and even longer if it is a direct response ad, Weston says.

You may have access to co-op advertising funds from manufacturers of products you sell that would augment your budget, Weston adds. "If so, make sure that you clearly understand the terms of qualifying for those funds, for example the ad may need to run a specific number of times or within a definitive time frame," she says.

Dig Deeper: How to Make Your First Advertising Buy

How to Buy TV Advertising on a Budget: Target Your TV Ad Campaign

Before launching a TV ad campaign, you need to develop a plan for who you want to reach where, when, and how. Here are some considerations.

Geography.
Options for advertising on TV include national networks, which reach a national audience; local broadcast or independent stations, which reach a regional or local market; and cable television, which can be national, regional, or local.  "Any one or a combination of these can be used to achieve success," Weston says.

Target audience. Who is your core customer?  "If you are trying to sell hearing aids your target audience would likely be adults 55 and older," Weston says.  "Do not, under any circumstance, believe everyone is in your potential market."

Timing and seasonality. Identify any days or seasons that have the greatest potential for increased revenue, i.e. furniture stores target weekends and ski retailers target winter, Weston says. Something to keep in mind is that rates change every quarter -- broadcast TV rates usually rise in the fall when the new season starts for certain shows. Also, when a hotly contested election is on the horizon, demand for TV spots in certain markets may rise, Hroncich says.

Dig Deeper: TV Advertising for the Rest of Us

How to Buy TV Ads on a Budget

Now that you know the basics, here are tips on how to find the bargains when it comes to advertising on TV.

  • Pay upfront. "Station sales representatives love this," Weston says. "They know the money is there, and their commissions are secured.  They will work hard for you and maintain a schedule with little preemptions."
  • Commit to a multiple-week schedule. Most cost-efficient packages are sold on a 10-13 week basis, Weston says. "Stations much prefer to have spots booked ahead of time," she adds. "It helps them manage their inventory." If you work through a cable company that has many different stations, you might be able to strike up multiple week deals on a variety of programs. "If you are looking to advertise during the weekend, you could strike up a 13-week weekend schedule whereby your ad runs in live sports programming and news, along with old movies and syndicated programs," Weston says.
  • Take advantage of market conditions. If the local economy is slowing, chances are the airtime available on local television stations is aplenty and you can negotiate some terrific deals. That was the case during the recent economic downturn, when TV and cable companies were looking to fill their advertising slots and willing to negotiate.
  • Look for fire sales. "Although they don't happen very often, fire sales provide the opportunity to purchase advertising packages far in advance," Weston says.  Quite often, they will include programming you would otherwise not be able to afford.
  • Auctions. When you purchase advertising via an auction, you will need to pay upfront, and may not have a clear understanding of what time slots you'll be receiving.  Rather than base your entire television schedule on auctions, you may want to simply use the auction to complement your original schedule, Weston advises.
  • Buy remnant advertising. You can purchase inexpensive remnant packages with a range of flexibility; the more flexible you are, the more savings you will receive.  "For example, you can purchase an 'auto-fill schedule' of 100 spots per week to air 6 a.m.-12 a.m., Monday through Friday," Weston says. "It may seem like a risky schedule, however at such a low cost if one or two spots air in a popular program this essentially 'pays' for the remaining spots."
  • Negotiate added value. When booking airtime, you can almost always negotiate for extras or "a value add," Hroncich says. "We did a cable TV buy for one of our clients recently and we got some free advertising on their website as a value add and some public service announcements at no charge." PSAs are 10-second spots to air when available during your flight (the schedule of advertising for a period of time).  Hroncich says that advertising agencies can often help negotiate these value add deals better because they're aware of what the stations have offered other advertisers in the past.
  • Negotiate a media mix. Ask if the television station has a website and see if there are any potential promotional activities on that website if you buy tv advertising. "Negotiate to have your video commercial stream on a website," Weston says.  "This is where TV trumps radio." While still advantageous, a radio ad streaming online does not carry the weight of a TV ad.

As you fine tune your TV advertising schedules, you'll start to realize the two or possibly three stations that provide the most value, Weston says. "If it is completely obvious, it's okay to drop the other stations considered," she says. "Develop a relationship with your best performers and invest in them.  It will be worth your effort."

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Recommended Resources

iMedia Connection: Media Planning and Buying
Understanding ratings.

Media Planning and Buying Calclulators
Understand and calculate gross rating points (GRPs), reach, and frequency.

Nielsen
Includes a section on "Inside TV Ratings."

SQAD
Media forecasting source.

Television Bureau of Advertising
Tools and resources to help advertisers make the best use of local television.

Last updated: Sep 14, 2010




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