TV advertising costs are primarily for production and airtime. National networks charge high prices for ad spots during popular shows, while local producers pay less. Costs depend on equipment quality and complexity of shoots, and involve a large team including directors, actors, and crew.
The two main costs of television (TV) advertising are production and airtime. Most of the various expenses related to a television advertising campaign fall into one of these two categories. A production company is typically hired by an advertising agency or directly by the producer or distributor to create the TV commercial by hiring and coordinating a large team of creative and technical people. The television advertising costs associated with broadcasting or airing the spot are paid to the network by advertisers.
National television networks bring in billions of dollars in advertising revenue each year. This is because television advertising airtime costs can be $1 million US dollars (USD) or more for a 30-second commercial run during a particular show with a large audience. For example, 30-second commercials aired during the Super Bowl can easily cost several million dollars each. The price that networks charge advertisers for commercial spots is based on the estimated audience.
A half-hour comedy (sitcom) has 22 minutes of show time and eight minutes of commercials. This means there are typically 16 30-second spots available for sitcoms. If the show has the best ratings for its time slot, this means that it is estimated that a lot of people are watching it and that TV advertising costs during this schedule will be high. While this may or may not be true when the show airs, the rate for the slots would still be high. Since national broadcasters have the ability to reach large audiences, they are able to make more money on TV advertising revenue.
Producers who create commercials for local and regional broadcasts also have to pay far less than production companies who run national TV commercials. The exact costs of television advertising also depend on the quality of the film equipment and how elaborate the photo shoots are. For example, many national commercials feature extensive set decorations and/or outdoor location shooting, while a local video producer may only have the shop owner speaking into the camera while outside or inside his shop in a TV ad.
Some of the different costs that are often part of a larger commercial television production are for director, assistant director, actors, art director, copywriter, film crew, props director, makeup artist, hair stylist, and wardrobe consultant. Even though the commercial is only 30 seconds long, the large team works together for as long as it takes to produce a quality commercial. Video production companies and local television stations usually charge a package or project fee rather than the time spent shooting the film.
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