Ad firms strike annual deals for television commercials

Television commercials range from the affordable to the expensive. The cost of such campaigns depend whether it is run on local or national channels. The fee for running the ad is computed by determining the price for convincing consumers to buy a certain product or service. The total amount needed to produce the television commercial is added to the fee charged for the total number of instances the client want their ad to be shown. The sum is then divided into the percentage of sales increase during the ad was shown.

Producing Television Commercials

The budget of production can vary from a few hundred dollars to as much as thousands of dollars. As quoted from Entrepreneur, some television stations offer to shoulder the production cost if a minimum 3-month contract for the ad is availed by the client. The American Association of Advertising Agencies said that, typically, 30-second television commercials cost between $200 and $1,500 when ran in local stations, while a whopping $342,000 is charged when the same length of commercial is shown on national channels.

Running Ads on National Stations

Usually, small companies cannot afford to air their television commercials on national TV stations, especially on high-peak events like the Super Bowl. Time published that a 30-second commercial spot during the Super Bowl in 2011 was priced at $3.5 million on average. AdWeek quoted that famous television shows, like American Idol, generate an estimate of $475,000 for every 30-second commercials. On the other hand, national TV shows with smaller viewer percentage charge a little over $100,000 for a 30-second ad campaign.

Local Ads

Usually, an average of 2 minutes of advertising per hour is offered by local TV stations. A more affordable rate is also charged as part of the channel's marketing plan. The cost of running TV campaigns depend on the time and year it is shown and its location. According to Entrepreneur, the price for 30-second commercials shown during noontime news programs can be between $200 and $1,500. Conversely, commercials shown during primetime, which is from 6pm to 7pm, are the most expensive.

Trimming Expenses

To cut down on costs, companies should ensure they are aware of the preferred programs of their target market. They should also know the peak days their consumers watch TV. For example, grownups going to work usually have time for television only during the night and weekends. Having an annual or bi-annual agreement with local TV channels also costs less. Additionally, asking the TV station to shoulder production expenses will reduce the cost of running the campaign. For branding purposes, companies can opt to run a 15-second trial of the commercial and another 30 seconds to persuade customers into availing the product or service the advertisement is pitching.