Question

Topic: Advertising/PR

How Do Local Tv Advertising Agencies Do Their Pric

Posted by Anonymous on 7/3/2009 at 10:39 AM ET 250 Points
how do local (US) TV advertising agencies do their pricing? I know there are multiple ways to do it, I'm specifically curious how most local TV ad agencies do it - the ones who research, write, produce the ad as well as do the media buy. I'm aware that agencies get a 15% discount on the media buys so they get money that way, but how much do they charge for the entire package?

Do they research and produce the ad for cost and just make money on the media buy? If so, what does that typically run? Is there a markup on that? If so, how much?

Thanks
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  • Posted on 7/3/2009 at 1:39 PM Author
    To give a little more information, my production company is branching out into the advertising business as my background is in marketing. I'm trying to decide on pricing. The problem is that I cannot get information about the competition how they do their pricing.

    I'm thinking of charging $4,999 for the production of the 30 sec spot plus the media buy. I'm of course targeting local businesses, not large ones with big ad budgets. How does that pricing compare? Is that way too much? Is that ridiculously cheap?
  • Posted on 7/6/2009 at 12:14 AM Author
    Thanks, I tried that but they refused to give me any prices. :-/
  • Posted on 7/6/2009 at 6:12 PM Author
    Sorry, I just don't feel right about doing that. :-/ I know everyone does it, but still...

    It would really help if I could get some ideas of typical pricing for this kind of a business. Does anyone know?
  • Posted on 7/14/2009 at 9:03 AM Accepted
    I'm not sure there is a "typical," and if there is it probably varies from market to market. You might check out Spot Runner, which is kind of the ready-to-wear version for small businesses and local markets. They actually do a pretty good job for a very reasonable price. Again, better in some markets than others, and better for some product categories than others.

    The other approach (in the US) is to check with the local cable company and see how they price their advertising packages. In some markets, they produce the commercials free when you commit to an advertising schedule.

    Those should give you a starting point. You may choose to price your package higher than either of those to communicate the higher value, but at least you'll know what the obvious alternatives are charging.
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