Wondering if advertising on television is the right fit for your brand? Explore the advantages and disadvantages and learn how to make effective TV ads.
Find out where and how to build a successful TV ad campaign
Advertising on television is one of the most popular ways to spread a brand’s message, but don’t let its ubiquity fool you. More home screen ways to reach households exist than ever. Finding the right fit, whether through big-budget campaigns on linear TV or targeted ads for CTV conversions, can greatly impact your TV commercial success.
Here’s everything you need to know about advertising on television to get started, and where to learn even more.
Big Advantages of Advertising on Television
Adding TV to your media mix is a critical step for any brand that wants access to a broad, deep, and engaged audience pool. Building persuasive TV commercials has evolved into an art form since the first one aired during a baseball game in 1941. The medium has grown significantly in potency and variety, particularly with connected TV advertising spend projected to reach $40.9 billion.
Here are three major advantages TV commercials have over other types of advertising:
- Wider reach: The national television audience is massive, remaining the primary mode of entertainment for a large majority of adults. Around half of U.S. households have linear TV subscriptions, with connected TV ads reaching over 90%.
- Dialed-in demographics: Traditional demographic details for linear TV networks give advertisers a good idea of who their message may reach. OTT advertising takes it further with performance tools and viewer insights for precise targeting, down to ZIP codes.
- Better brand awareness: According to our research, 46% of viewers consider TV ads the most memorable type of advertising they come across. These ads also have a “halo effect” that boosts other advertising forms, making them essential for your media mix.
These benefits and more make advertising on television one of the best approaches for any brand looking to expand its audience. To delve into the power of connected TV advertising, contact Alpha Media for a consultation.
The Basics of Cable TV Advertising
Cable TV ads have been a potent brand-sharing tool, but CTV challengers offer newer, cost-effective options. Still, crafting and placing the right cable TV commercials could be a worthwhile investment for your brand.
Cable TV ads are generally broken down into two categories:
- Spot advertisements, which are typically cheaper and region-specific, and air on any channel the cable provider offers.
- Network advertisements, which are more expensive but can target customers around the country, and are negotiated with individual channels.
Cable TV ads are budget-friendly compared to broadcast ones. Think of a Sunday Night Football ad, which could surpass $800,000 versus cable spots ranging from $5 to $500. But we’ll get into more specifics on the cost of advertising on television, however you choose to do it, in a moment.
The Cost of TV Advertising
Given the increasing prominence of OTT and connected TV advertising, marketers looking into advertising on television should be well-acquainted with their costs compared to traditional linear TV. Here’s what you need to know to make the price of placing TV commercials a well-justified expense for your brand.
Linear TV’s greatest strength is its massive reach, with an unparalleled capacity to deliver ads to audiences around the US across a range of demographics. OTT and CTV’s greatest strength is their power to target ads in a much more precise and cost-effective manner. OTT and CTV ads can also be used to extend the reach of linear TV campaigns, as well as search and social advertising.
Advertisers laid out nearly $67 billion on TV advertising in 2022, with the median price for AdAge-tracked shows coming in just north of $80,000. In 2019, cable TV upfront advertising came to an average cost per mille (CPM) of $19.45, while network TV upfront advertising that year had a CPM of $36. Meanwhile, OTT and CTV advertising spending reached just under $27 billion in 2022, with the average CPM for CTV ranging from $35 to $65.
Benefits and Drawbacks of Local TV Advertising
While the term “TV commercials” often brings to mind the sort of splashy, expensive advertisements you might see during major sporting events, focusing your efforts on local TV may yield more cost-effective results for your brand. Here are some of the pros and cons of advertising on television locally:
Pros of Local TV Advertising
- Wide local reach: Depending on your chosen area, local linear TV ads may still provide a huge number of potential exposures. For instance, advertising in San Francisco will be more expensive than other regions, but it will still put your ad in front of millions while costing less than a national ad.
- More precise targeting: Demographic data tied to local station viewership will make it easier to find more relevant audiences for your brand, rather than the broad metrics available at the national linear level.
- Affordability: Running a 30-second ad on a national network could easily cost hundreds of thousands of dollars, whereas a medium-sized local market may have a CPM of $15 to $25.
Cons of Local TV Advertising
- Lack of flexibility: The terms of a TV advertising campaign are typically set as soon as it begins, with little room for optimization or course correction. If any major changes are required mid-campaign, your brand may be in for a major headache.
- Unclear attribution: It can be difficult to track a customer from a local TV ad to purchase, which makes measuring campaign success more of a challenge than in some other mediums.
- Suboptimal metrics: While it’s easier to find definitive performance metrics for local TV than on national TV, they are still not as detailed or instantaneous as in CTV and OTT video.
How to Compare TV and Radio Advertising
The first radio advertisement aired more than a century ago for real estate development in New York City. Since then, radio has stood as a stalwart of advertising in the US, persisting even after the emergence of television as Americans continued to tune in during commutes, road trips, and more. Now evolving consumer behaviors mean the boundaries behind those formerly well-defined domains are blurrier than ever before.
While TV ads can capture audiences with attention-grabbing effects and instantly recognizable celebrities, radio ads only have listeners’ senses of hearing to target. That said, the digital age means consumers are likely to experience either type of ad while multitasking on their phones or other personal devices. Keeping ads simple yet creative is one way to help cut through the noise, whether audio or visual.
Building radio into your media mix is an important avenue for diversification, especially since the common run-of-schedule method of ad placements means you can save costs at the expense of controlling exactly when your ad will play. Production costs are an even greater point of differentiation, with radio advertisements generally being much cheaper and faster to create than TV ads of similar quality.
The Growing Role of Addressable TV
Addressable TV isn’t a standalone viewing method like linear TV or CTV; it’s a potent advertising approach used alongside OTT viewing. It’s based on the principle that not everyone watching the same show will have the same interests, and it uses targeting capabilities and viewer data that is inaccessible on linear TV to serve better-tailored advertisements.
But how do you know if addressable TV campaigns are successful? Here are three key performance indicators to keep in mind:
- Reach and frequency: Reaching a higher number of unique viewers is one of the most fundamental goals for ad campaigns — however, the next point is what makes it truly valuable.
- Conversion rate: The percentage of viewers who, having seen the ad, take the desired action (making a purchase, signing up for a free trial, and so on) within a particular period.
- Return on ad spend (ROAS): By dividing the revenue generated from the ad campaign by the total ad spend, you can determine how much of an impact your TV commercials made on your bottom line.
How TV Measurement Works
Typically, advertisers align the most valuable television slots with the most popular programs. This placement increases the likelihood of delivering a brand’s message to the widest audience. But how do we know which TV programs are the most popular? That’s where TV measurement comes in.
Nielsen, a trailblazer in TV measurement, began by distributing viewer diaries and specialized screen-capturing devices called Audimeters. They sent these to a representative sample of U.S. households. While Nielsen’s methods have adapted, recent events have dented its reputation as the definitive linear TV measurement source.
One of the most promising modern methods of TV measurement is automatic content recognition (ACR), which tracks what viewers are watching, then transmits that data to TV and set-top box manufacturers. When implemented with consumer privacy in mind, ACR can be an unparalleled measurement source of data for advertisers and broadcasters alike.
Power Up Your TV Advertising Plans
It’s clear that connected TV advertising is an unmatched destination for brands that want to reach wider audiences and the most engaged viewers possible. But not all means of CTV advertising are equally effective.
By partnering with Alpha Media, you’ll unlock access to the only CTV platform that was purpose-built for performance marketers. Our performance based CTV advertising solution will help you increase reach, lift, and ROAS by targeting the right audience at the right time, then hone the value of your campaigns with best-in-class analytics that measure the true performance of your ads. Request a demo today to see what we can do for your brand.
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