How to Negotiate the Cost of TV Advertising

Television advertising can be affordable.

The high cost of television (TV) advertising can be intimidating to both small and large businesses. Television sales representatives often present a rate card to the client with advertising rates for each television program. These rates may seem high, but they are usually just a starting point in the negotiation. With careful planning and some flexibility, advertisers can increase the efficiency of their television advertising budgets by negotiating lower rates.

Things You'll Need

• Advertising budget
• Rates from various television stations

Instructions

1. Ask for lower rates. Comparing rates and ratings for the company's target demographic (for example, men ages 25 to 54) from various television stations in the market will help you know which rates are too high.

2. Consider using a media buying firm to purchase the advertisements. Media buyers usually receive a 15 percent agency discount and have established relationships with, and knowledge of, various stations.

3. Offer to air shorter commercials at a reduced rate. A 30-second spot is the most popular commercial length. By creating 10- and 15-second spots, a company can increase its advertising frequency at a lower cost. Airtime for 10- and 15-second spots is typically 60 percent the cost of airtime for a 30-second spot. The shorter spots should reinforce the message of a longer spot.

4. Propose steep discounts during low-demand times of the year. Because rates reflect supply and demand, they tend to be higher around holidays. The first quarter of the year is the best time to negotiate discounts because that is when many retailers run lighter advertising schedules.

5. Commit to an annual schedule. A television station will usually offer a 10 percent discount in return for an annual contract.

Tips & Warnings

• When purchasing advertising directly, ask for an agency discount. Sales representatives often reluctantly agree to give it to direct advertisers.

• Ensure the commercial's message is on target, and avoid skimping on production quality.

References

• Entrepreneur: Television Advertising
• "USA Today;" Ad Rates Usually Have Wiggle Room So Negotiate; Steve Strauss; April 10, 2006