45% of Digital Political Ad Spend in 2024 Will Go to CTV
by Frankie Karrer
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TV advertising has typically been thought of as expensive and cumbersome. However, times have since changed, with technology and solutions helping advertisers overcome these common challenges.
This article will explore TV advertising costs, the difference between national and local TV commercials, and how these costs are determined.
We hate to answer a question with another question, but how long is a piece of string? The costs vary greatly depending on the type of ad you’re producing, and the type of creative that you intend to use.
For example, utilizing existing stop-motion graphics from your existing pool of assets would be more cost-effective than creating a mood board, casting actors, hiring a producer, finding a location shoot, and so on. We break this down in the sections below.
In general, the cost of a TV advertisement can range anywhere from $1,000 or so on the low end, to over $1,000,000 on the high end.
The cost to produce a TV ad consists of three phases:
The creative and administrative work before filming begins in pre-production. Expect the majority of your budget to be spent here and on the following items:
The shoot itself, also known as the video production process, runs as short or as long as needed to get the required footage. Here are a few of the cost drivers during this phase:
Once the filming is over, there’s still a lot of work to do during post-production. Some of the costs incurred are:
So you’ve got your commercial ready. Now what?
TV advertising costs not only include the production itself but also navigating the media minefield to make sure that your dollars spent are getting your commercials on the air, on the right network, and at the right time.
Overall, your broadcast costs vary depending on the following factors:
The more localized the region, the lower the TV ad cost (because the number of impressions aired is lower than if you were to air on national television). While national ad spots tend to be more expensive, they generally yield a better return on investment. Advertisers have a more comprehensive pick of ad lengths to choose from (15 seconds, 30 seconds, and 60 seconds), while local spots come with more restrictions (limited to 30-second ad spots, for example).
One notable prime-time event that empties advertisers’ pockets in a hurry is the Super Bowl. This year, a 30-second commercial costs an average of $7 million. A clear rule of thumb is the higher the viewership, the higher the price.
Advertisers can place their ads in different time slots throughout the day, including breakfast, daytime, early peak, late peak, and nighttime. However, some times are pricier than others based on TV viewership statistics.
If we were to re-rank these time slots, starting from the most expensive—it would follow this order: late peak (8 pm – 10:30 pm), early peak (5:30 pm – 8 pm), daytime (9:30 am – 5:30 pm), night time (11 pm onwards) and breakfast (6 am – 9:30 am). Late peak TV advertising costs can be more than eight times as expensive as advertising in a daytime slot.
Weekend spots are usually on the higher end of the pricing spectrum, as higher-income viewers are likelier to tune in. However, advertisers shouldn’t discount the weekdays, as CPPs (Cost Per Rating Point) can vary as much as 16 percent from one weekday to another.
This can be a contentious one, as it’s more important to target the right audience that is aligned with your brand, instead of the biggest audience. However, a general rule is that the larger the audience, the higher the cost.
We also recommend approaching TV advertising through an audience-first, not a network-first approach, to make the most of your investment.
Also, keep in mind that not all demographics watch television (or the types of television) in the same way—linear TV and cable TV have taken a backseat as viewers have been cutting the cord in record numbers (especially during pandemic times) in favor of Connected TV.
Most advertisers have their pick of 15-second, 30-second, or 60-second ad spots—the longer the commercial means there’s more airtime (and higher TV ad costs). With that said, in the case of Connected TV advertising, longer commercials are still great at capturing attention.
This refers to how often the same commercial would be shown to a viewer. Of course, the more your ad is shown, the more expensive—but this could be counterproductive due to ad fatigue. It’s a savvier investment to favor reach over frequency, since reaching a new viewer (instead of serving the same viewer one ad multiple times) is more valuable, and another chance to connect with a potential customer.
Although we explored this to some degree in the sections above, ultimately advertisers need to consider whether it makes sense to advertise locally or nationally. So we’ll break down the unique TV advertising costs for each in the next two sections.
National TV advertising typically involves higher costs due to the extensive reach and production quality required to appeal to a wide, diverse audience across the country.
Local TV advertising is generally more cost-effective, targeting a specific community or region, with costs varying based on local market size and viewer demographics.
Unfortunately, not only is TV advertising expensive—it’s not entirely measurable (especially in the case of linear TV and cable TV advertising). However, Connected TV has changed all of that, and made streaming TV advertising more accessible to all.
MNTN Performance TV was engineered to make advertising on TV as turnkey as possible on Connected TV. The platform pairs your brand’s CTV ad creative with any combination of over 80,000+ third-party audiences (or your own first-party data if you prefer) and many top-tier, blue-chip networks known to drive performance.
Advertisers can run retargeting or prospecting ads on television the way they would on any other digital advertising platform, like search or social. MNTN makes TV advertising measurable from start to finish, via a customizable, real-time reporting dashboard, which reports on bottom-line marketing metrics like revenue, ROAS, and conversions.
The measurement (and cost) aspect is one part of the challenge facing marketers who want to advertise on TV. Producing a regular cadence of TV ad creative is another big hindrance. MNTN’s Creative-as-a-Subscription™ service solves this problem, by removing traditional barriers to TV creative and giving marketers access to quarterly, customized TV creative without investing in anything but their media goals.
Many factors go into TV advertising costs, like timing, frequency, audience, networks, and more. However, not all TV formats are built the same, nor do they have the same ability to truly measure an ad’s impact.
Thankfully, advances in the TV advertising space have welcomed new entrants like Connected TV / OTT advertising into the mix, which employs an audience-first approach to deliver targeted ads that can be tied back to advertisers’ goals and provide a solid return on investment.
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