Small Business

Time to Buy TV, Radio, and Internet Ads?


Business owners who might not have considered such advertising in the past should know rates are down and audiences are up

These days, you don't have to be an insomniac to come across television commercials for products like the "Snuggie" or "ShamWow." With advertising dollars scarce and large corporations cutting back on their marketing efforts, smaller businesses are reaping the benefits of significantly lower rates for ad buys they may have once thought were out of reach.

Prime-time TV slots are going for a 25% less than they sold for just last year, says Steve Cox, spokesperson for the Better Business Bureau. "The playing field for TV advertising is becoming more level, and small business owners can now take advantage of steep discounts for prime slots, as well as cut rates from PR firms and productions companies," he says.

J. T. Hroncich, managing director and principal of Capitol Media Solutions, a full-service advertising agency in Washington, says advertising rates are more negotiable than ever. "Before, some of these media companies didn't do business with firms with smaller budgets, but it's very easy to negotiate now with Web sites, television, and radio," he says.

More Eyeballs

In addition to more flexible rates, small businesses can get more bang for their ad bucks today because viewership is up, Hroncich says. "People aren't going out as much; they're staying home watching TV or looking at the Internet. So these venues are getting more impressions but they're charging less money" for their ads, he says.

But it's not always easy to persuade smaller firms to try new ad buys. "Companies like to stick with what they know best, but we're trying to get them to branch out and try electronic or interactive ads. If they even take 10% to 20% of their ad budgets and use that to see what results they can get with broadcast or Internet, they're liking these options they weren't able to get 6, 9, or 12 months ago when prices would have been double," Hroncich says.

Cox advises small companies to identify customer demographics when deciding where to advertise, rather than being biased by their own viewing habits. Advertising slots that have the most cost-effective reach may be on niche cable TV programming that reaches a particular geographic area or target audience, he says.

And while large corporations have budgets that allow them to run ads simply reinforcing their brands, small business ads should get viewers off the couch. "Small businesses need to have their phones ring or orders coming in at their Web sites" in order to determine that an advertisement is successful, Hroncich says.

They're Prepared to Haggle

Smaller firms do not have to spend a fortune on production costs for broadcast advertising, he says. And many media companies today are willing to take spots on a test basis, rather than lock advertisers in to six-month or one-year commitments as they have in the past. "These companies are looking to survive, so they're willing to do short-term campaigns without minimums, at discounted rates," Hroncich says.

A small company can contract with a freelance graphic artist or video production company to design its ads or hire an advertising firm to do both the design and placement of the ad campaigns. In some cases, Cox says, the media outlet will work with advertisers to produce the spots.

Entrepreneurs should be prepared to haggle over pricing, he says, being aware that it's better to run more spots at a less desirable time than to blow their ad budgets on one prime-time slot.

Hroncich says that businesses can get a week's worth of oft-repeated radio spots for $1,500 in many markets: "You'll either see results immediately or you won't, so you can see how it goes. Your rates may go up later, but by then you'll know if it's worth it."

Similarly, he suggests that his smaller clients try month-long banner ads on targeted Web sites or week-long ads on cable television. "Cable is cheap as opposed to broadcast TV and the cable viewers will be local. It may cost $1,000 to $2,500 to produce a cable advertisement, and you could air it for $25 or $50 a spot, depending on what time of day and what shows you're looking at," Hroncich says.

Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.

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