tv commercial costs

How Much Does It Really Cost To Advertise On TV?

This is a very complicated question. The short answer is that every situation is different, so it makes sense to understand what your goals are and then speak with our team of professional media buyers and strategists. Of course, that’s not why you’re here and instead are looking for ballpark cost estimates. The rest of this article is the long answer to that elusive question.

First caveat here: different brands have different objectives. Let’s look at two different types of advertising campaigns:

  1. A brand awareness campaign for a large auto insurance company or prominent search engine.
    For businesses like these, one goal might be to establish brand awareness and recall in 100 US markets. Taking that information, we might build a media plan that establishes a specific reach (the number of people exposed to the ad) and frequency (the number of times a specific person saw the ad during the campaign) in each of those 100 markets. Here, the ad budget allocated to each market will be reflective of the size of an individual market and the target frequency of the campaign. That might cost $180,000 in New York City and $12,000 in Boise in order to achieve the same objective.
  2. A performance marketing campaign for a growing e-commerce business.
    Even as e-commerce companies look to expand outside of paid digital advertising, their core KPIs remain the same: find new customers and clients for a specific target Cost Per Acquisition (tCPA) and scale ad spend at that CPA. If a company has a target CPA of $75 to acquire a new customer and the campaign goals predicate finding 1,000 new customers during the flight, the budget should be around $75,000. In this example, we are less concerned with brand recall and overall reach. Instead, we are concerned with buying the most efficient media to hit our goals. (Note: most of our clients are performance-oriented).

Okay, with that said, let’s dive in.

What makes up TV Advertising Costs?

Television advertising costs are made up of 3 factors. We’ll dive into each of these in some detail.

  1. Costs to produce an ad/commercial
  2. Costs the air the ad
  3. Third-party performance tracking software, where applicable
Why Advertise On TV? Because It Works. Contact us today to find out how we secure primetime TV ads at a fraction of the cost.

TV Commercial Production Costs

So you’ve decided you want to run a TV spot. Now, we need to produce a broadcast quality ad that encapsulates your company’s value proposition in a limited time window. The most common commercial durations are 15 seconds and 30 seconds, although there are also durations of 60 seconds, 120 seconds, and even 30-minute infomercials. For the sake of this article, we are going to consider 15-second and 30-second spots.

As most of our clients are performance-oriented, our view of a successful commercial is one that produces results within a specific KPI window, usually Cost Per Website Visit, Cost Per Lead, or Cost Per Purchase. Additional goals can include brand lift, brand recall, branded search term lift, incremental direct website traffic increases, and many others. Note, specifically, how none of those goals are “have a blockbuster quality, cinematic production”.

A great TV commercial does two things: 

  1. Clearly gets the message across
  2. Looks professionally produced

As a rule of thumb, our performance-oriented creative team usually starts with the following format: problem, solution, means to connect. Spelled out deeper, what problem do your consumers have, what is your solution to that problem, and how do you want prospective customers to get in touch with you.

While you can technically produce your own spot for the cost of the graphics, voiceover, and music, most brands choose to bring in a 3rd party to produce broadcast quality commercials. To simplify things, we can talk about three different flavors of ads.

First, we have a commercial that is a combination of client-provided, high-quality images or videos, stock footage, and custom graphic work. Visually, this can be a quick-to-produce and cost-effective means of building a stunning asset. Combine a solid script and on-brand voice talent, a lower-third with your website or phone number, and a Call-To-Action screen at the end and you are ready to air. This project can take 2 to 4 weeks to complete and will cost between $4,000 and $10,000.

Moving up in cost and production value, we have an in-studio shoot with 1 or 2 actors. This could be a “talking head” with a green screen background, a semi-custom set that effectively highlights your product/service and a million things in between. This requires a producer, videographer, sound and light team, and actors (including the cost of caring for and feeding the whole crew). Depending on a number of factors, this can take 4 to 12 weeks to coordinate, shoot, and complete post-production work and will cost between $10,000 and $30,000.

The last broad bucket involves a full custom shoot. Often these include filming at multiple locations with multiple actors, some of who are celebrities and require us to plan around their busy schedules. The production value for this type of creative is of the highest quality both in video and audio. The timeline for these creatives is hard to pin down, but the planning usually starts at least 3 months in advance of filming. Starting budgets will land around $40,000 but will likely average closer to $75,000 and can go as high as $1,000,000, especially if you factor in celebrity talent.

Why Advertise On TV? Because It Works. Contact us today to find out how we secure primetime TV ads at a fraction of the cost.

TV Commercial Media Costs

By far the largest and most flexible part of the TV budget comes from the cost to air your commercial. Different advertisers and media companies report costs in different ways, so we will use a baseline metric for the purpose of comparing multiple cost structures: the cost per thousand, or CPM. The CPM is defined as the price of 1,000 impressions served and the formula for CPM is:

cpm calculation

We consider the CPM to be the great equalizer of cost metrics. TV is a sledgehammer, not a scalpel. Our job is to get your commercial in front of as many viewers within your demo as possible for the budget. This is a tonnage play. Here is an example.

  • Commercial A costs $5,000 and serves 333,333 Impressions.
  • Commercial B costs $10,000 and serves 1,333,333 Impressions.

When buying TV advertising, it is important to think of productivity rather than cost. Commercial B costs more but is twice as efficient at reaching your audience than commercial A. The price of 1,000 impressions served for Commercial B is $7.50, contrasted with Commercial A which has a CPM of $15.00.

It’s for this reason that we focus on CPM.

Great, now that we got that out of the way, let’s talk about TV commercial budgets.

Local TV Advertising Budgets

The truth is that you can get your commercial on TV for a very small amount of money. You can call your local TV station and be on air for as little as $1,000 per month. Is this going to change the trajectory of your business forever? No. But, you might get some recognition and hey, it feels good to say that you have a business on TV. This type of buy is best executed directly as most media buying agencies will not execute buys at this budget. Anticipate a very high CPM for a small local buy like this.

If you want to establish a brand presence in a local market, plan to spend between $20,000 and $1,000,000+ per month. To make a large impact in New York, LA, or Dallas (top 5 TV markets), you could easily spend $500,000 – $1,000,000 per month. If your goal is to reach folks who live in New York, but you are not concerned with brand recognition or recall, campaigns should start at around $50,000 per month.

This budget can be reduced to as little as $10,000 per month for smaller markets like Omaha or Shreveport.

National TV Advertising Budgets

National TV campaigns can serve a variety of purposes. Large brands use national TV to blast their message out, establish brand loyalty and recall, and generally stay top of mind. Most of our clients utilize national TV for a different reason: CPM efficiencies on national buys can be immense, and our clients usually have the goal of acquiring new customers at their target CPA.

For national campaigns based on performance, plan to start around $200,000 per month and scale based on performance and hitting your KPIs. It is not uncommon for advertisers to run $500,000 per month campaigns, even increasing that budget during “peak season” – think Black Friday/Cyber Monday, Christmas, or Mother’s Day.

Connected TV

Because it offers more precise delivery and you pay per impression, CTV offers additional flexibility on budget requirements. As long as you can manage a proper frequency, Connected TV campaigns can start for around $10,000 per month and go up from there. If you are an e-commerce business trying to determine if CTV will work for your business, it is important to get enough data to substantiate your decision one way or another. A good guideline is to spend $30,000 on any specific tactic or CTV channel before determining if it works for your business.

What are the most expensive national TV time slots to buy?

  • NFL Superbowl 2021: $5,500,000 for a 30 second spot.
  • NFL Sunday Night Football: $750,000+ for a 30 second spot.
  • NFL Thursday Night Football: $625,000+ for a 30 second spot.
  • NBC This is US: $475,000+ for a 30 second spot.
  • NBC The Voice (Monday): $250,000+ for a 30 second spot.
Why Advertise On TV? Because It Works. Contact us today to find out how we secure primetime TV ads at a fraction of the cost.

3rd Party Tracking Software

As clients and brands continue to look to track their TV as a performance marketing channel, a crop of 1st and 3rd-party tracking software has risen up. These tools attempt to create an attribution model that says, with reasonable confidence, that a website visitor came from TV. Some of these systems can even track down-funnel conversion events, like a lead sign up or purchase, using pixels and cookies.

The team at The Remnant Agency utilizes systems like these to determine the effectiveness of your TV campaigns. We can optimize by channel, the hour of the day, the creative asset, and many other variables. A good media buying agency is nimble, willing to adapt, and focuses ad budget on what is working and away from what is not working.

Is Television Advertising Worth the Cost

Thanks to technological advancements, there are now many different ways consumers can consume media, significantly affecting television advertising. We live in an era where streaming platforms are all the craze. It may seem like people don’t watch traditional anymore, but a recent Nielsen survey revealed that the average household spends nearly eight hours watching television each day.

Even with such drastic changes, people still consume TV and TV ads at the highest rates of any platform. So if you’re a brand that is looking to make the push onto the national stage or even just a small business trying to make a splash in your local market, television ads can definitely be worth it. Make sure you perform thorough research so that you’re choosing the appropriate channels based on your industry, budget, and your target market.

Save Money on TV Advertising with Remnant TV Advertising

At The Remnant Agency, we create massive ROI for our clients by purchasing remnant TV ads. Remnant television ads are spots that a publisher or media company couldn’t sell, so they are sold at the last minute at a considerable discount. These ad spots run during primetime and on popular shows, so you’re able to secure a significantly larger reach at a fraction of the average price.

As a TV advertising agency, one of the most frequent questions we get is, “how much does a TV commercial cost?” The reality is that every business is different and will have a different cost basis. Contact us today to learn more about how we can help your brand grow with remnant tv ads.

Are you ready to see what The Remnant Agency can do for you?

The scale of traditional media is unrivaled across any other marketing channel. Experience that reach, ROI, and scale at a fraction of rate card pricing. We look forward to meeting you.