HOW MUCH DOES TV ADVERTISING COST?
Great news! TV audiences are up! TV costs are down. In terms of cost-per-lead and driving traffic to your website, TV is cheaper.
Recently, we’ve delivered targeted TV viewers (Grocery Buyer demograph) for $2.40 per ‘000, and produced TV ads for less than $2,000.
But the better answer to the question ‘How much does TV advertising cost?’ is “Nothing!”
That’s right. Zip. Zero. Zilch.
Well, basically, there are two kinds of TV ads: Brand and Response.
Brand ads promote your brand by reminding people of your brand’s qualities and values. With repetition, this encourages consumers to keep buying your brand, or to consume your brand more often.
Response ads are different. They do a sales pitch based on your product or service’s features and benefits. And they persuade viewers to take action, like jumping onto your website to check out your product and buying it right away.
Brand ads need repetition.
But a Response ad is an independent sales machine.
One viewing should be sufficent to generate enough sales to pay for its TV time-slot and deliver a profit.
Meanwhile it’s clocking up thousands of brand impressions, free.
HERE’S HOW IT WORKS:
Say the margin in your product, after product and despatch costs, is $50.
And you buy a $25 TV spot to advertise your product.
Say that spot delivers 4,000 views by people in the demographic group who are most likely to buy your product. It could be women 25 – 45, or men 40 – 60, or the household Grocery Buyer, for example.
That means the cost per 1,000 targeted views for that spot is $6.25.
If the response rate to your ad from your target audience is, say, 0.4%, then that spot will send 16 warm leads to your website.
If your website’s close-rate for warm leads is one in eight, you’ll sell two products, and your profit will be $100.
After you pay the $25 spot cost, you’ve made $75 net profit, plus your ad made 4,000 brand impressions on your target market.
Now, what would you do if you had a machine where, every time you put $25 into it, $75 came out?
REPEAT & SCALE IT UP!
Of course! You’d do it again, only bigger.
So say you commit to spend $5,000 on TV, spread over a number of weeks.
And for your commitment, we are able to negotiate media discounts and bonuses that lower your target audience cost per view to $4 per ‘000.
With the same response and close rates as the first example, the result is 625 sales with a profit of $31,250, less the TV spot costs of $5,000.
That’s a net profit of $26,250. And you also made 1.25 million brand impressions on your target market.
OR LOOK AT A REVENUE STREAM …
We could plan a campaign where you spend $100 per day on TV ads. Same product, same margin, same response rates. And say we’ve negotiated a CPM of $5.
That calculates out to 80 warm leads and ten purchases each day, plus 20,000 brand impressions, and a net profit of $400, or $2,800 per week, or $19,600 per month.
The above numbers are chosen to demonstrate the principle. Maybe there isn’t $50 margin in your product, but $100, or $10. Maybe your target market is smaller and more exclusive, or bigger and less defined.
Every product is different and will produce a different set of numbers.
But whatever the case, the principle is the same: we work out an allowable cost per sale for your product, then set up a TV-driven sales channel where every time you put a dollar in, you get two, three or several dollars out.
Also, note the impact the target audience cost per ‘000 views (CPM) has on a campaign’s profitability.
COST PER ‘000 VIEWERS IS THE KEY
You have to run ads that reach your target customers where and when they cost the least.
If you pay too much (say, $40+ per ‘000 viewers during a prime-time spot on a Sunday night on Sydney or Melbourne TV) you’re not making a media investment, you’re making a media donation.
You could likely buy those exact same viewers across a number of cheaper spots in non-peak-night viewing hours for a tenth of the cost or less.
You also need A) a reasonably good product, B) a Response ad with a sales pitch and a response strategy, and C) a flexible media buying strategy that lets you move your ads around to focus on the programmes and time-zones that deliver the best results.
But honestly, it isn’t rocket science. It’s mostly common sense and following the numbers.
Contact us to discuss how TV advertising can sell your product.
And see how we created a TV ad-driven sales campaign for a $390 product and sold over 40,000 units.
“WEB TRAFFIC INCREASED 300%.”
“During the first week of TV, while testing in minor regional markets only, our web traffic increased 300%.” Cliff Mearns, CEO, Credit Counsellors Australasia
“BEST ROI EVER!”
“Sales of gift certificates grew by more than 600% in the first 3 months. This the best ROI we have ever had!” Simonetta Lo Po, Marketing Manager, Penrith Whitewater
“SALES UP 58%”
“Online will always be the one of the cheapest channels but if you want the rest of the market, you need to add in TV.” Sonia Molnar, Marketing Manager, Thomson Education Direct
“RESPONSE 6 X HIGHER THAN ANTICIPATED.”
“Response to the national TV campaign is over six times higher than we anticipated. We are experiencing a massive number of hits and our website is going into meltdown.” Steve Delnawaz, CEO, Stubby Strip Australia
“Their creative ideas matched our brief beautifully and the results were stunning. Our author experienced a threefold sales increase.” Jim Demitriou, Chief Operating Officer, Harper Collins
“TV – LOWER COST PER SALE THAN EBAY!
“The TV campaign generates all the sales I need, month after month. And the TV cost per sale is actually lower than our cost per sale on eBay!” Peter Rose, General Manager, Kayaks2Fish
“VISITOR NIGHTS UP 28%.”
A 12 week non-prime-time TV campaign increased domestic visitors by 22.1% and nights stayed by 28.4%, while competitor regions experienced significant downturns. Rita Fisher, President, Blue Mountains Tourism Limited
FOUR CRITICAL QUESTIONS:
1. What action do you want your market to take?
2. What do they need to believe, to take that action?
3. What do you need to tell them to make them believe?
4. What evidence do you have that will convince them?
For a low-cost introduction to TV advertising that will grow your business, drop us a line via our contact page.
Because our experience is measured in hundreds of TV campaigns, we know which buttons to press to make people respond. Because we analyse the results of what we do, and have worked with hundreds of different kinds of businesses, we know what works and what doesn’t.
- Aussie BronzeSacha Roberts,CEO, Aussie Bronze
The video looks and sounds fabulous! Thanks again for all your hard work. Can't wait to share it ...
- Possibilities Management GroupJonathan Oastler,Managing Director, Possibilities Management Group
The TV commercial looks absolutely fantastic, couldn’t be happier. The Instructional video also looks fantastic. The voice was spot on. Thanks so much for all your effort.
- Community Colleges AustraliaDavid Hurley,Manager - Business Development, SG&S Community College
Wow! I found the video to be inspiring, the stories just blending so well together and picking up so many key decision-making triggers. Well done to you and your team.
- Stubby Strip AustraliaSteve Delnawaz,CEO, Stubby Strip Australia
Response to the national TV campaign is over 6 times higher than we anticipated. We are experiencing a massive number of hits and our website is going into meltdown. Thanks guys!
- Sterling Mining Co.Monique Hayes,Marketing Manager, Sterling Mining Co.
Love, love, love the film! I passed copies out generously when I was in Toronto last week for broker meetings and at the Chicago conference the week before and I've been getting a lot of very favorable feedback.
- YPB SystemsJohn Houston,Executive Chairman, YPB Systems
We are delighted with the product and your service, and your co-ordination of the Chinese translation for us. We've had a tremendously positive response to the video in London, Beijing and Australia.
- DematicPeter Trotter,General Manager Marketing, Dematic
Billy and the team have an amazing way of exceeding my expectations. They really understand consumer, direct, industrial and B2B marketing. It’s what I need in an agency.
- Goldsearch AustraliaJohn Percival,Chief Executive Officer, Goldsearch Australia
On the day Billy & Shaun's corporate film for Sterling Mining Co. was premiered at this year’s Silver Summit, the share price jumped from a previous base of $3.35 to over $4.20.
- Harper CollinsJim Demetriou,Chief Operating Officer, Harper Collins
Their creative ideas matched our brief beautifully and the results were stunning. Our author experienced a threefold sales increase and is now one of the top ten Australian fiction authors.