Elizabeth Thorp

 

One of the most common questions business owners and advertising leaders ask is, “How much does local TV advertising cost?”

The answer? Well, it depends. 

I know, not exactly what you were looking for when you searched for ‘local TV advertising costs,’ but we’ll get there – I promise.

The truth is, very few things have such a cost variance as advertising on local TV. We’re talking anywhere from $5 to several million per thousand viewers! 

So, how do you decide if local TV advertising is right for you? Are there better options out there for advertisers?

Today, we’re going to discuss the cost, ROI, and demographics of local TV advertising, plus four high-quality alternatives that could get you more results. 

[Table of Contents]

  • How much does local TV advertising cost?
  • How local TV advertising rates are determined
  • Network demographics
  • Test out more affordable formats first
  • Advertising on Local TV: The pros and cons
  • Work with the experts: Alternatives to local TV advertising costs

How much does local TV advertising cost?

Like any form of advertising, there is a range of prices in the TV medium. 

You may be able to pick up an 30-second ad-slot on Oprah through your local affiliate for anywhere from $90 to $300. Or possibly an afternoon soaps rotation for $150 to $300.

Unfortunately, coveted ad spots during the local news are going to cost you more. Costs often range from $200 to $1,500. Your commercial may cost you even more if you want to advertise during popular evening viewing times – like between 6 and 7 PM. 

In comparison, Adage found that a nationally broadcast spot for a commercial of the same length cost around $115,000 this year. Alternatively, an ad spot during the Super Bowl cost upwards of $5.25 million! I don’t know about you, but that’s a lot of money for 30-seconds. 

How local TV advertising rates are determined

These costs aren’t randomly assigned. In fact, a number of factors determine the cost of your local TV ad space. 

Everything from the average cost of local ad space in your geographic location, to the time your ad will run, and the size of the programming’s viewership, are all taken into consideration. 

Live viewership also affects ad space pricing. Because audiences can’t fast forward through the programming, advertisers are willing to pay more for the guarantee that their ads will be showcased. 

So, how is advertising on local cable TV measured?

First, let’s get some terminology out of the way. Local TV commercial advertising costs are measured on a cost per thousand bases, better known as cost per Mille or CPM.

CPM refers to the cost of your ad seen by 1,000 viewers. Although the factors that determine CPM can vary widely, the most important for advertisers is time, day, and location.

The average cost of local TV advertising can range from $5 to $35 CPM for a 30-second commercial — the most significant factor being your location. 

how much does local tv cost ctv ott advertising ctv ott advertising

How to calculate advertising on local TV cost

Once you know the average cost of local TV advertising in your area, the formula to determine approximate ad costs is pretty straightforward. Of course, prices and viewership are continually fluctuating, so this is merely an estimate. Prices can best be provided to you by a local affiliate or station representative. 

First, you take the total viewership during that program and divide it by 1,000. Then, you will multiply that number by your market’s CPM rate. 

For example, let’s say you want to run a commercial in New York City. Your local station estimates that 500,000 people will see the ad. Therefore, your cost equation will be (500,000/1,000) x 27.16. 

That comes out to a total local tv advertising cost of $13,580. 

However, it’s essential to keep in mind that just because “500,000” people may see your ad, they might not always be your target audience. Let’s dig a little deeper. 

Network demographics

Let’s be real. Advertising on local cable TV only works if someone is watching it. 

This isn’t really a concern during something like the Super Bowl – who doesn’t love Super Bowl ads? However, local TV advertisers might not be as lucky. 

You can’t guarantee that every “viewer” stays on the couch during the commercial break, but most advertisers would like to target the general demographics of their optimal audience. 

Many television stations publish their audience demographics online for easy access. These statistics reveal everything from the average age of their audience members to education levels and household incomes. They may also include the number of children within each household. 

Using this data can help you decide if your target audience matches that of a particular station. 

how much does local tv cost ctv ott advertising programmatic

Shift towards OTT

The way we consume media is changing rapidly. It’s just a matter of fact. You can’t use words like “everyone” and “all” when you talk about reach on Comcast local TV advertising anymore. 

As you can see, this chart shows that cable TV demographics are trending towards the 45-and-over age bracket. The average age of 45 and up is excellent if you sell a product that appeals to an older demographic. However, most brands value the purchasing power and influence of the upcoming generation. So, where are 18 to 37-year-olds spending their time?

The shift isn’t entirely unexpected; the number of people watching over-the-top (OTT) is growing at an unprecedented rate, particularly among ages 18 to 37. As of 2019, Netflix subscriptions exceeded 60 million in the U.S. alone, while nearly 70 million homes now own a connected-TV streaming device! You can imagine what this has done to cable subscriptions across all age groups. 

What advertisers don’t know is that OTT and connected TV still offers plenty of options for advertisers to run commercial time on the big screen. As the need for on-demand content rises, so does the popularity of advertising on devices that connect to the internet. 

In many cases, advertising with real-time tech is more targeted, has better tracking, and yields a higher ROI. In the case of connected TV, commercials even feature a TV-like viewing experience. 

In fact, the 52% of adults from the age of 18 to 37 using connected TVs is influencing many advertisers to explore other high-quality media.

What exactly are these devices, and how do they compare to local TV commercial advertising costs?

Test out more affordable formats first 

If we’ve established anything, it’s that advertising on local cable tv can take a chunk out of your budget. If you don’t want to risk a financial hit without being sure of your ROI, it may be worth it to consider other high-quality, affordable avenues. 

Connected TV, Youtube advertising, online ads, and geofencing are all less expensive than local cable tv advertising rates and could earn you a higher ROI. Since these advertising methods are cheaper, they work well for testing, which ad approach works best for your company. You might be surprised at the reach you receive in addition to lower costs. 

Here’s how they measure up to advertising on local cable TV. 

Television vs. Connected TV vs. YouTube vs. Online Advertising Costs vs. Geofencing 

Connected TV

There are a lot of connected TV (CTV) options out there. Apple TV, Amazon Fire Stick, Chromecast, and all major gaming consoles. For the sake of time, we’ll limit this example to the most popular – Roku

Roku is a connected TV device that allows its users to watch over-the-top (OTT) content. Did you know that it also offers advertisers massive advertising reach for a truly reasonable price?

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Advertising with connected TVs like Roku comes with a myriad of benefits. Beyond huge viewership, advertisers get all the benefits of digital media buying and data tracking, right there on people’s home TVs. 

For that, advertisers are willing to pay a premium. It also helps that you know this is where 18-37-year-olds are spending their time. Connected TV ads run for about $20 CPMs, according to eMarketer

Youtube Advertising

Youtube gets the kind of traffic local tv stations only dream of. We’re talking upwards of a billion users. Every. Single. Month. 

With that kind of reach, you’d be crazy not to use YouTube as at least a test for your advertising strategy. But what does it cost?

In 2017, the average was $0.10 to $0.30 per action/view. Per view or action means that each time your ad gets engagement, like a call-to-action click, you pay $0.10. Basically, if your ad campaign had a $0.10 video view, you would pay $1,000 for every 10,000 people that watch your video ad.

A variety of factors determine the average cost of your Youtube advertising campaign, such as:

  • Targeting options
  • Ad type
  • Bidding selection
  • Your bid amount

Online Advertising

If your advertising budget is on the smaller side, online advertising is a tried and true method of advertising. 

Depending on how you’re measuring, it’s more affordable than many other formats. Hootsuite reports that based on CPM, you’re paying an average of $7.19 for every thousand impressions. Cost per click is $0.27, just a few cents less than the high end of YouTube. 

When it comes to online advertising, you can input a plethora of data on your target market. Many platforms offer to target by level of education, income, buying behaviors, and interests. 

Geofencing

When you want to take local, personalized advertising to the next level, partner with the power of Geofencing

Addressable geofencing, in particular, has gained a ton of traction and truly inspired the next level of hyper-local personalization. The tech works through the creation of a virtual “fence” around a nearly unlimited number of chosen locations. 

When your consumers enter the virtual area, you gain the ability to target them. Targeting consumers based on their location is the perfect pairing for retargeting campaigns, local notifications, and reminders about your business based on their current, real-life experiences. 

Not only are your consumers targeted in real-time based on their current location, but you can do so with any form of media best suits your needs, whether that is high-quality video, retargeting campaigns, or a notification. 

You’d think that such specific targeting tactics would come at a premium price, right? 

Nope! Several factors can affect the cost – such as advanced targeting features and impression volume. However, a typical price range for geofencing is only between $4-14 CPMs, making it one of the most effective and affordable adoptions for local businesses. 

Advertising on Local TV: The pros and cons 

With so many high-quality advertising options available, what is the best choice for you? Should you advertise on local TV? Or should you go with an alternative? 

TV advertising has a lot going for it. If broadcast TV meets your demographic needs, it could very likely increase your reach and boost your sales. Many people turn to traditional television because of the engagement it provides viewers. There is something about pairing sight and sound that has captivated consumers for a century. 

On the other hand, we now know that there are other more affordable methods of local commercial advertising that doesn’t compromise on rich big-screen media. Plus, because broadcast TV doesn’t connect to the internet, it lacks in highly-specific targeting that other platforms have.

It doesn’t help that people spend their commercial breaks on their phones or running to the bathroom, and live TV can be expensive for advertisers. 

That said, let’s take a closer look at the pros and cons of advertising on local cable TV. 

The pros of local TV advertising:

  • Television ads reach massive audiences. As an advertiser, you want commercials on TV because, well, a lot of people watch TV. There’s a vast audience sitting around, waiting to see your ad. There are nearly 120 million homes in the U.S. that have at least one TV, according to Nielsen.
  • TV commercials aren’t limited to one sense. TV pairs visual and audio, unlike newspapers and radio. A multi-sense advertisement is an advantage because it creates greater appeal to consumers. A commercial is twice as persuasive if it appeals to more than one sense.
  • The most effective medium in advertising is on TV. Gfk/TVB released a study that found that consumers rate television ads as having the most significant influence on their buying habits and purchasing decisions.

The cons of local TV advertising:

  • Making changes is difficult. Producing an ad takes a lot of time and cost. Long story short, it’s a lot of both. It’s also difficult to make last-minute changes before an ad runs. When you advertise through connected means, real-time results make it easier to make updates.
  • People can skip your ads entirely. You finally get your commercial filmed, produced, and running. Then most of your audience skip over it at the click of a remote button or press silent on their remote. No matter how well targeted an ad is, people might not be responding well to it. Unfortunately, you don’t even know until money has been well gone and spent.
  • Targeting is difficult. Targeting on broadcast TV will never be a precise science. At least not in the same way methods like connected TV is. You can aim for broad audience targets – like running an ad for shoes during a sports event. But that doesn’t compare to serving an ad to someone that has shown interest in shoes recently or even to someone that has recently visited a shoe store (geofencing).
  • The costs add up. Perhaps the most significant disadvantage of advertising on local tv? Cost. Buying your ad spot and producing your commercial. It all adds up fast. Although TV commercials historically have good ROI, the introduction of new mediums means might be more risk than guarantee.

Work with the experts: Alternatives to local TV advertising costs

For years, small businesses nationwide have been dependent on television for local advertising. 

However, changes in the landscape of consumer TV viewing habits are creating more effective options for advertisers with a higher ROI. The best part? You never have to compromise on high-quality video content. 

In our internet-consuming age, video content is still King. At Moblyft, we can help you explore rich, localized data-driven advertising tactics with a higher ROI. 

We’d love to hear more about your local video advertising needs. Contact us today to receive our free media kit and read our case studies