If you are a student doing research on TV advertising costs for an advertising or marketing class you are not alone! We have had so many requests for help that we have posted this page just for you. We are often asked vague questions like “Please give me a ballpark figure on the cost to advertise on TV, the radio, in magazines, at trade shows and on billboard signs”. However, the problem is that this is a question that can’t be answered any better than asking what does a car or a house cost. I would be correct in stating that a house will cost $300,000.00 and I’d also be correct if I stated that it would cost $3,000,000.00 and $30,000,000.00 may seem extreme but it is also a correct answer.
What Does TV Advertising Cost?
The correct answer to What does it cost to advertise and what does it cost to buy a house and what does it cost to buy a car is a question. The question is; what is your budget? Tell me about your budget instead of asking about TV advertising costs. For example, if I know your budget I can find you the right car, the right house, and the right advertising plan.
For example, radio advertising is often more expensive during the times that we drive our cars. Conversely, it is less expensive during the middle of the day. Of course, if you have a talk show with a loyal fan base then that show could cost more than a morning or evening drive time show.
How Does TV Advertising Work?
The answer to any question about TV advertising costs and how TV advertising works is also very complex. For instance, there once was a time when you could advertise on just three broadcast networks, ABC, NBC, and CBS. Consequently, if you wanted to reach one-third of the American public you had only to pick one of the three. Today we literally have hundreds of networks which each have dozens of shows. Additionally, every show in every city has a rating. That rating along with supply and demand as well as the number of households covered will determine the cost to advertise. Of course, the advertising cost of a show will be different in every city.
Magazine Advertising
Of course, the same is true of newspaper and magazine advertising. For instance, each newspaper and magazine in the country will set their own prices based on market conditions. Also, you could buy an ad in a magazine or newspaper in a wide range of sizes which would alter the costs. Plus, magazines and newspapers will offer substantial discounts based upon the contract you will sign with them. For example, if you agree to buy a large number of ads during the year the rate reduction compared with a one-time ad will be huge.
This is all interesting to know but you’ve got a school project due and still need to know what will it cost to advertise on TV!
TV Advertising Costs
I’ll give you some real examples of TV advertising costs. As long as you understand that these are just examples then you can make some guesses about your project. If this was for a real client rather than a school project then we would be asking a lot of questions. For instance, who you are trying to reach is important for us to know as well as the monthly budget. For example, you may be trying to reach women age 20-35. In that case, there are TV shows we would suggest. Conversely, there are other shows we’d never recommend.
Maybe your budget won’t allow us to get the exposure we need on this show. In that case, we may go after a less expensive show reaching fewer people. Another option would be to run the ad in a smaller market area. Always remember that every show sells for a different price. For that reason, our prices are only to give you an idea of what something cost. These prices have nothing to do with what it may cost to reach a real client of yours.
Florida TV Show Costs
Here are the examples you’ve been waiting to see which will show you TV advertising costs for different clients of ours.
A client in Tampa Florida sells and installs satellite TV systems. His clients are typically 50 years old and older. For that reason, they are happy to switch from cable to satellite if they can save $15.00 per month. He wanted to advertise this on TV. However, the cable companies will never agree to allow you to advertise satellite TV. For that reason, we recommended broadcast TV. The client wanted to spend $10,000.00 per month on his advertising. Click to view the pdf file showing a broadcast TV advertising schedule.
Cable TV Advertising Costs
This schedule is for a client who wanted to spend only $1,500.00 per month to advertise. His product would only be purchased by people who like to snow ski. Click to see a pdf file showing a schedule for cable TV advertising in Denver.
Now you may wonder why one client is spending $10,000.00 per month to be in one city and another client spends only $1,500.00 in another city. The answer is that with broadcast TV the signal is broadcast into the air (yes it is on cable too) so everyone in a city can see that show. Conversely, for less money using cable TV advertising, we can buy just a neighborhood in the city.
Which is Better Cable TV or Broadcast TV?
So the answer is that when you reach fewer people your TV advertising costs go down. For instance, compare a restaurant chain with locations all over town and a single mom and pop restaurant. The mom and pop could spend $1,500.00 on cable TV advertising. Consequently, they would reach just the people in their own neighborhood. However, the chain could spend $10,000.00 per month and reach the entire city.
Broadcast TV is More Economical
If the restaurant chain has 20 locations within the city then they are paying only $500.00 per location. So it is more economical for the big chain to spend $10,000.00 to cover the advertising needs of 20 locations.
Cable TV is More Economical
However, the mom and pop restaurant only has to spend $1,500.00 not $10,000.00. So, which is better Cable TV or Broadcast TV? It depends on your advertising budget and store locations. Additionally, the mom and pop restaurant would be wasting money on broadcast networks. The problem is that people won’t drive across town when so many restaurants are closer.
For a better understanding of how it is perfectly reasonable for us to ask one client to spend $10,000.00 on TV while another spends only $1,500.00 please take another look at the pdf files above. Then, check out the reach and frequency. You can see why the TV advertising costs are so different. Plus, they are both appropriate depending upon the client. Here is an explanation of these media terms.
GRPs, TRPs, Reach and Frequency
The aggregate total (the sum) of the ratings is called Gross Rating Points or GRPs. The sum of the ratings of a specific demographic segment may be called Target Audience GRPs or more simply TRPs. The term GRPs is generic and may refer to household GRPs or to specific target segment GRPs.
TV Advertising Reach
Reach is the number or percent of different homes or persons exposed at least once to an advertising schedule over a specific period of time. Reach, then, excludes duplication.
TV Advertising Frequency
Frequency is the number of times that the average household or person is exposed to the schedule among those persons reached in the specific period of time. Because it is an average frequency, dispersion of frequency of exposure will differ between specific schedules and daypart mixes.
GRPs, reach, and frequency are mathematically related in the following ways:
GRPs = Reach X Frequency Reach = GRPs / Frequency
Frequency = GRPs / Reach
Here is an example of how a large car dealership spent their advertising dollars. Click to see a car dealership TV advertising budget.
It is my sincere hope this these examples of TV advertising costs help you with your class project. Additionally, when you graduate and find yourself involved in a career as a marketing director please contact us. We will be happy to assist you in planning how to use a real advertising budget.
Contact us today for all of your TV advertising needs!
Sincerely,
Rick Goldman
President