Data gathered by the global television market shows there are over 1.7 billion pay TV households globally. Commercials have been around ever since televisions first entered our living rooms, and they still stand as one of the most effective ways to reach mass audiences, promote your brand and drive sales. Although traditional advertising has been disrupted by digital and online channels, TV advertising continues to offer promising results for businesses:
- TV commercials reach 92% of the population (Free TV Australia)
- TV reaches 70.1% of Europe’s population with an average daily viewing time of over 3.5 hours (The Global TV Deck)
- 86% of TV ads deliver a profitable long-term return (three years after a campaign finishes) – higher than any other advertising channel (Think Box TV)
However, the introduction of on-demand streaming services, audience segmentation and changing consumer behaviours has created a shift in how consumers watch TV. So, how do small businesses get started with TV advertising (and do it successfully) today?
In this guide, we cover the fundamentals of TV advertising to help you understand:
- What is TV advertising?
- The different types of TV advertising
- The pros and cons of TV ads
- How much TV advertising costs
- How to measure the effectiveness of your ads
What is TV advertising?
TV ads or commercials are short programs (usually around 15 or 30 seconds long) that are shown on TV channels to promote your brand, sell your products or services or
There are many different types of TV ads including:
- Demonstrations: When you show viewers how something works
- Testimonials: When someone reviews your brand, product or service to add credibility
- Stand-up presenter: A direct sales pitch to viewers
- Animation: A cartoon-style narrative
- Slice-of-life: A mini-narrative involving your product or service
- Jingle: A brand slogan set to memorable music
What are the different types of TV advertising?
There are three main types of TV advertising channels:
- Broadcast
- Cable
- Over-the-top services (OTT)
Broadcast TV is the original way to watch television. It refers to local channels such as ABC, FOX, CBC, etc. Broadcast TV is free and available to everyone. This makes broadcast TV great for brand awareness, but not so good for targeted ads.
Cable TV is a paid subscription service that offers viewers a wide range of channels such as HBO, Cartoon Network, MTV, etc. The reach for cable channels is smaller than broadcast but allows you to target a specific audience.
OTT services provide users with on-demand video content on any device that can connect to the internet. Unlike broadcast and cable TV, users can choose what they want to watch and when they want to watch it. More businesses are moving away from broadcast and cable TV as people continue to spend more time online, with OTT local ad spending projected to double by 2025 (BIA Advisory Services).
Examples of OTT advertising channels include:
- YouTube TV
- Netflix
- Stan
- Hulu
- Amazon Prime Video
- Tubi TV
- VUDU
As with any advertising or marketing strategy, there are pros and cons of TV ads that may impact how effective they are for your business. You should ultimately make a decision based on your advertising goals and budget.
What are the benefits of TV advertising?
The key benefits of TV advertising are:
- Scale and reach
- Consumers tend to trust TV
- High impact
TV advertising allows you to show your ad to a large number of people in just a few seconds. It’s also extremely popular with people across varying demographic groups, giving it an upper hand in terms of reach. In today’s digital world, it’s easy to go full-power with digital channels, but not everyone is spending time online. For example, TV may be a more effective channel to target baby boomers and older generations than social media.
People tend to trust TV more than other mediums. According to a study by Nielsen, 63% of consumers in the U.S. trust a TV ad when they see it. The internet is saturated with content and ads, while TV ads are associated with a sense of legitimacy and prestige – perhaps because it’s a traditional medium but also because not all businesses are doing it.
TV is also a multi-sensory experience and ads can be used to entertain or evoke certain emotional responses in your audience for a seamless ad experience. This opens up a lot of creative freedom to leave a lasting impression of your brand.
What are the disadvantages of TV advertising?
Of course, there are also some disadvantages of TV advertising to consider:
- More expensive than other mediums
- It’s difficult to make changes
- Limited targeting options
One of the downsides of TV advertising is that it’s more expensive compared to other mediums. To create a high-quality ad you will need to outsource a video production company. You will also need to purchase ad space on your chosen channel which can cost thousands.
Another drawback is that once your ad is up it can be difficult and expensive to edit things or make even minor changes. It’s important to create a strong concept from the get-go and make sure you haven’t cut corners on quality.
Lastly, you can’t guarantee your ad will reach your target audience. TV audiences are somewhat captive, but they might decide to get up during the commercial break to get a drink or start scrolling through their social media feed until their show resumes. Do your research into different channels and target viewers to give your ad the best chance.
How much does TV advertising cost?
TV advertising costs are split into two categories:
- Production/post-production
- Media planning and buying
You will need to budget for production costs including scripting, hiring actors, filming and post-production. You will then need to purchase an ad slot on your desired channel which can be higher than the production itself depending on the channel, ad frequency and air time. Primetime ads shown between 6pm and 9pm are considerably more expensive than ads shown between 9am and 5pm.
Other factors that can affect the cost of a commercial are:
- Geographical location
- Ad length
- Age and gender of your target audience
- Time of year/season
- Broadcast vs. cable vs. OTT streaming
You can bring costs down by targeting the right audience to reduce wastage. You can also save money by hiring a media buying agency as they can negotiate better deals with different media outlets.
Learn more about TV advertising costs for different channels.
How do you track and measure TV advertising?
Measuring the effectiveness of a TV ad is important, especially when you’ve spent so much on it. Below are some of the metrics you can use to measure the success of an ad:
- Monitor website traffic: Have you seen an increase in your organic website traffic or leads since airing the ad?
- Social listening: See how many people are mentioning and talking about your brand on social media.
- Sales and enquiries: Assess whether your sales have increased since the ad aired or if you’ve had more customer enquiries.
How does TV advertising work for small businesses?
To create a TV advertising campaign you will need to:
- Budget: Determine the costs to create a TV ad campaign and if you can afford it. Assess the value and cost-benefit for your business.
- Set advertising goals: What will be the purpose of your TV ad? What are you trying to promote or sell? Who is your target audience? Also decide on the metrics you will use to measure the return on investment (ROI).
- Media buying: Narrow down a few ad placement channels that align with your advertising goals and budget.
Consider hiring a media buying agency: Media buying agencies are experts in helping you produce and place effective ads that convert on various TV channels. They can also negotiate TV advertising rates on your behalf.
TV advertising can be a big investment so it’s important to ensure your strategy is strong and your ad messaging is refined. Plus, navigating the world of TV advertising rates and ad production can be time-consuming. Working with a media buying agency is a small cost that offers a great return. Learn about media buying agencies and the services they offer.
