Local TV Advertising Costs: 10 Factors to Consider

by The MNTN Team

1 Min Read

It’s a common misconception in the advertising world that people don’t like commercials. But as it turns out, that only applies to irrelevant ones: 69% of consumers will stay engaged during ads that promote services or products they are interested in.

Based on that data, we can all agree that television ads (particularly local ones) can be a valuable part of your marketing mix. However, they can also quickly get expensive if you aren’t careful. If you want to maximize your return on ad spend (ROAS) and avoid breaking the bank, you’ll need to optimize your local TV advertising costs.

With that in mind, we’ve outlined the top ten factors that impact local TV ad costs. Our list focuses on Connected TV ads as opposed to traditional cable and broadcast options, as the former gives you more control over ad expenses.

1. Target Audience

The size of your audience plays a major role in determining your local TV advertising costs. The bigger the area you are targeting, the more you’ll pay, which means you need to identify who you want to reach and tailor your campaign settings to align with that demographic.

A targeted approach not only increases the efficacy of your CTV ads — it can also optimize costs by reducing waste from broad campaigns. Balance is key, though. You don’t want to cast too wide of a net, but you’ll want to avoid becoming too narrow in your CTV targeting process as well.

You’re going to encounter some baseline expenses regardless of how many people see your ad, including production costs. As such, if you’ve already paid good money to create and edit content, you might as well show it to a large portion of your ideal consumer base.

2. Geographic Reach

The geographic reach of your campaign significantly impacts your local TV ad costs as well. CTV platforms allow you to narrow down your audience to specific regions, cities, zip codes, or even neighborhoods.

Some CTV platforms even allow you to position your content in front of audiences using a custom radius around your store or place of business. That sort of customized hyper-local targeting provides major efficiency gains compared to traditional TV models, under which you would have to purchase ad space for an entire designated market area (DMA).

3. Creative Production Costs

You need compelling ads that tell a story and showcase the value proposition of your products or services. But you also need to be mindful of your total video production costs, which include everything from scriptwriting and filming to editing and post-production.

High-quality ads can drive better engagement, but CTV platforms often offer tools and templates to help you create effective content at a lower price point. QuickFrame, for instance, specializes in producing cost-effective, high-quality video content tailored to your brand and audience.

4. Ad Placement Types

Under a traditional broadcast model, there’s only one ad placement type. CTV, on the other hand, provides several different placement options. You can run video advertisements before, during, or after content — or choose to run banner ads on the menu screens of streaming platforms.

While rates vary across platforms and display times, there’s still a general pricing structure. Banner ads tend to be some of the cheapest, whereas pre-roll spots may be more expensive (given they must be watched to access the content even partially). However, the latter usually sees higher rates of engagement.

5. Time Slots and Channel Selection

CTV offers more flexibility in terms of channel and time slot selection. You can schedule your OTT ads to appear during windows where your audience is most likely to be watching, regardless of prime time constraints. You’ll also be able to target specific genres of content, such as action, drama, comedy, and so on.

Taking advantage of that flexibility can lead to better engagement while also reducing your local TV advertising costs. For example, you could choose a time slot with slightly lower viewer activity (i.e., weekday afternoons) but precisely target programming that aligns with the interests of your audience. Your per-display costs will probably be lower, but your content will still be presented to relevant audiences.

6. Duration and Frequency of Ads

Ad duration has a huge impact on your total marketing costs. Shorter ads that run for 15 seconds are going to be cheaper than those that run for 30 or 60 seconds.

Additionally, ad frequency will have a direct impact on pricing. Getting your brand and products in front of consumers more frequently can help recall and improve brand awareness. However, it also means you’ll burn through your budget faster.

7. Budget Allocation and ROI

At the end of the day, you determine how much money you can devote to advertising. And CTV works to lower the barrier to entry and give you more control in that regard, allowing you to spend more money on production or run longer campaigns.

It’s essential to allocate your budget in a way that maximizes ROAS. While consumers want to see quality content, overspending on production may reduce your total reach. Try to strike a balance that engages customers while optimizing reach.

CTV platforms make achieving that balance easier by providing detailed analytics and reporting — allowing you to track everything from cost per acquisition (CPA) to campaign ROAS.

8. Competitive Bidding and Auction Dynamics

Depending on the backend platform you use, CTV advertising often involves competitive bidding and real-time auctions. During the campaign creation process, you’ll set a total budget, daily or weekly spending limits, and a bid amount for each ad display. When someone in your specified audience views content on the CTV channel you’re advertising on, your ad will be entered into an auction. The algorithm will then compare bids and pick a winner. Setting higher bids will mean you will win more auctions, but you will also pay more for each ad display, which will eat away at your budget faster.

9. Duration of Advertising Campaign

The overall duration of your campaign also impacts your local TV advertising costs. Short-term campaigns may have higher per-ad costs, but they’ll allow you to make adjustments quickly and gather feedback about consumer preferences. Running a longer campaign will allow you to be more selective with your bidding and achieve a sustained presence.

Throughout your growth journey, you will likely use a mix of short-, moderate-, and long-term campaigns. Each offers unique benefits and potential limitations, especially when it comes to cost control.

10. CTV Platform Selection

Lastly, choosing the right CTV platform is critical to the success of your campaign. Different platforms offer varying audience sizes, targeting capabilities, and pricing structures. If you go with native CTV platforms, such as Netflix or Hulu, you’ll only be able to buy ad space on those channels. Another concern is that some platforms charge extra for targeting and data analytics.

You can overcome all of these shortcomings with a unified solution like MNTN Performance TV. As a MNTN client, you’ll enjoy access to premium ad space, a wealth of tools at no extra charge, and all of the support you’ll need to mitigate local TV advertising costs.

MNTN and QuickFrame Make Local TV Advertising Easy

CTV platforms allow you to precisely target niche audiences who are most likely to purchase your products or services. They also track ad performance so you can determine which content delivers a strong ROAS. However, some CTV ad platforms charge hidden data fees for audience targeting.

MNTN Performance TV does not. In fact, we include a slew of add-ons, tools, and resources for no additional fees. One of our most popular offerings, Creative-as-a-Subscription™, provides MNTN advertisers with fresh creative assets produced by the pros at QuickFrame.

Let MNTN help you keep your local TV advertising costs at a minimum while ensuring the right people see your content at the ideal stage of their journeys.

Request a demo to get started.

Local TV Advertising Costs: Final Thoughts

Under traditional TV advertising models, it’s tough to track and reduce local television advertising costs. Fortunately, Connected TV and platforms like MNTN Performance TV put the control back in your hands with dynamic bidding tools, precision targeting capabilities, and all of the insights you need to maximize your impact.

If you want to get more bang for your advertising buck, embrace the CTV revolution and make your next campaign the best one yet. (With MNTN, we hope.)