Buying TV advertising is a challenge, especially if it’s the first time. Here are some important considerations.
The Typical Pitch: A Package Deal
A typical TV advertising sales pitch may offer a package deal that appears to be a great value. A significant discount is available only for a limited time. The package usually includes a specific number of TV spots.
Sales reps generally sweeten the pot with a raft of bonus spots at no cost. The likelihood that these bonus spots may air at times when viewership is low may not be emphasized.
Focus on Gross Rating Points, Not Number of Spots
Experienced advertisers don’t focus on how many spots they buy. Instead, they buy market exposure, measured by the volume of gross rating points. Without measuring GRPs, the number of spots is meaningless. Professionals also look for reach and frequency. These measure how much of the target segment sees the message, and how many times.
Think Demographically
Few products appeal to the entire audience. Smart advertisers zero in on target demographics, age ranges of viewers who are most likely to buy a particular product. For example, a reality program with strong ratings in the 25 – 34 age demographic is an unproductive setting for a spot promoting retirement condominiums.
The concept seems simple – just tell the sales rep that the spot should air only in shows that are demographically right for the product. But TV stations sell ad time just like other commodities based on supply and demand. If an advertiser demands a specific demographic, stations generally charge a premium.
How to Buy Like a Pro: Hire a Freelance Buyer
Few experienced advertisers who buy volumes of TV spots deal directly with ad sales reps. Instead, they buy advertising like a pro. How? By hiring a pro. They work with an advertising buyer, a professional who makes a career of purchasing broadcast ad placements.
Buyers know the TV advertising market like most people know the local supermarket. They know where to find certain demographics, and they also know how to get them at a good price. Many buyers work for advertising agencies, but in most TV markets freelance buyers work with individual entrepreneurs who can’t afford an agency.
Buyers may work by the hour or by the job. In smaller markets, rates can be as reasonable as $50 an hour. A couple hundred dollars’ worth of their expertise can avoid huge mistakes in ad schedules that cost tens of thousands, or more. Think of buyers as financial consultants for marketing budgets.
Buyers may be able to get what’s called the non-commissionable rate, or net rate, which can save as much as 17 percent. This avoids the commission that TV stations pay to ad agencies for bringing in that business. Some stations charge the commission even if an agency isn’t involved. Saving this fee can by itself pay for the buyer’s services.
Cost Per Point
Most buyers consider cost efficiency their highest goal. They focus on a target demographic with ad placements that reach the highest proportion of that segment with the greatest frequency, all at the lowest cost. Many are expert negotiators who know all the tricks of the trade, and how to ferret out the best values.
How much should an advertiser expect to pay per gross rating point? It depends on the market. There are 210 designated market areas in the U.S., from #1 New York City to #210 Glendive, Montana. Obviously, prices in New York are exponentially higher than in Glendive. Cost varies widely by market size and market conditions. Ask the buyer for market specifics.
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