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TV Advertising Costs: How to Find a Solution that Fits Your Budget

Jonathan Rolley
Jonathan Rolley Posted on Mar 22, 2016, 7:38:30 PM

Most entrepreneurs and marketers know that TV has incredible reach, but many don't give the medium any serious thought because they assume that TV advertising costs are too high.

'BUDGET' spelled out with cubes
In reality, a TV advertising campaign can be very affordable. The launch of new digital channels has opened up many more spots and there are solutions to suit all budgets. Some spots can be obtained for just a few dollars, while those in premium programs can cost over $50,000. This blog will explain how a television advertising solution can be tailored for businesses, ranging from small startups to huge multinational corporations.

Marketers need to weigh spot cost against response rate.

Programming is the biggest determiner of TV advertising costs, but transmission time is also a factor. A 30 second spot is half the price of a a 60 second spot, and a 15 second slot is 60% cheaper than a 30 second slot. However, one should not let these figures detract from the main point of TV ads: to generate positive ROI through a high response rate. For this reason, many direct response and performance advertisers choose to run 60 to 120 second spots, which deliver a response rate of up to ten times higher than a 30 second spot.

A recent trend shows advertisers choosing to run 15 second spots to increase reach and efficiency. We've reviewed many clients with this marketing strategy, as the response rates are drastically lower than compared to spots of 30 or 60 seconds in length. Spots that are longer than this ideal length are also less cost-effective. A four-minute infomercial in a morning time slot typically delivers a lower ROI than a 60 to 120 second slot at a better time. Marketers need to figure out the length of slot and programme that will get the greatest return on investment. For this reason it makes sense to run TV ads of different lengths and at different times to determine the best result to meet your goals. Such A/B testing allows marketers to optimise their campaigns for the greatest ROI.

 

Production costs also need to be factored in.

Production budgets can also vary greatly – from just a few thousand to several hundred thousand dollars – and these also need to be factored into your TV advertising costs. We recommend that you invest no more than 10% of your total campaign budget into creative, as it is only one of several costs that has to be taken into account when calculating ROI.

It's possible to produce great creative without breaking the bank if you recognise the two things that TV ads have to do: connect emotionally with an audience and include a call to action. Again, it makes sense to produce more than one advertisement so that you can measure the success of one against the other. Avoid sinking your whole creative budget into a single big idea on which the success of an entire marketing campaign relies. And remember, a 60 to 120 second slot is more likely to deliver greater ROI and is cheaper to shoot than a 4 minute infomercial, making these ideal lengths doubly advantageous to a marketer looking to limit their TV advertising costs

There was a time when only large, well-known brands would consider television advertising, but today, the myriad of channels offer great variety and flexibility. If you are interested in making use of this very effective medium and want to get the greatest ROI, consider the services of our leading performance-based Melbourne advertising agency. We develop optimised TV campaigns for all budgets and can ensure that you realise the potential for growth through television advertising.

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Image Credit: Aupair Link

Jonathan Rolley
This post was Written by Jonathan Rolley

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