Cost of Marketing II: Advertising on cable TV

Cost of Marketing II: Advertising on cable TV

by Stephanie Morrow, December 2009

Studies show people spend more hours per day watching television than paying attention to any other medium. Almost 99% of North American homes have at least one television. Television advertising has consistently proven to be more effective than both newspaper and radio ads. Your product can find its specialized market. Unfortunately, such an effective tool doesn't come cheap. One 30-second television commercial during prime time evening viewing can cost up to 30 times more than one radio spot during the prime listening "drive time."

For many small to midsize businesses with a limited advertising budget, national, broadcast television advertising isn't a viable option. But that doesn't mean that you can't use this effective tool. A low cost alternative to traditional television advertising is putting those advertising dollars into cable television.

Over half of American homes now subscribe to cable. Lifetime, Nickelodeon, FX...television has grown from the top three major networks to hundreds of cable channels, and people are changing their viewing habits from Everybody Loves Raymond and ER to Nip/Tuck and the Sopranos.

From established networks like USA, Lifetime and CNN to emerging channels such as HGTV, Oxygen and TLC, cable advertising has become the new, affordable way for businesses to take advantage of television advertising.

Cable - The Low Cost Alternative

Cable advertising's advantages of targeting, frequency and media cost make it one of the greatest mediums for advertising. Cable advertising is a lower cost alternative to advertising on network television, usually 10 to 20% of the cost of regular broadcast time. Prime time spots on network television that may cost $2,000 to $3,000 per spot usually cost around $175 on cable. For a 30-second spot in a suburban area, advertisers may only spend $25 per spot on channels like CNN and ESPN, $20 for Nickelodeon and TNN, and $15 for channels such as VH-1. In fact, businesses in smaller towns may buy commercials for as little as $2 to $3 per spot on cable television.

Since cable offers more programs and specialized channels, it is even easier to reach a target audience. Not only can you choose specific times in which you think a certain audience will be watching like the traditional networks; cable allows you to choose entire channels dedicated to a target audience.

Companies can even specify a certain time of the year to advertise. For example, a company that sells snowboards and skateboards, which may not have a huge advertising budget, can put their advertising dollars into running all of its ads during "The X Games" on ESPN 2. And, since businesses are spending less per commercial, they can buy more air time than on the regular networks, raising its frequency level.

Production Doesn't Come Cheap

Although cable advertising is definitely the cost-effective route to television advertising, someone still has to produce your commercial before it makes it on the air. The production of a commercial can be much more expensive than simply designing a newspaper ad or recording a radio spot. A sharp, catchy TV spot can easily cost anywhere from $100,000 or more to produce.

Advertising agencies or TV commercial production facilities are usually the best companies for creating a quality commercial that will effectively promote your business. However, some television stations and cable companies produce commercials for much less than ad agencies, and may even package the production with air time. If using this option, however, make sure to determine if the commercial quality and content the TV station or cable company is proposing will successfully represent your business.

The Bottom Line

Simply producing a commercial and placing it on cable won't garner results. Using a poorly-produced commercial, buying inexpensive late night commercial time that few people watch, or just placing a commercial a few times on the air will probably be a waste of good advertising dollars. If you don't have the money to produce a good TV commercial and pay for effective commercial time that will reach your target audience, cable advertising may not be the right medium for you. But, if the budget is there and your target audience can be reached through cable networks, cable advertising can be the most effective medium for your advertising campaign.

Getting Started

To get started, call the sales department of your local cable operator to find out spot rates and coverage areas. Take some time to build an advertising plan, including budget constraints, commercial ideas, and the length of your ad campaign.

To learn more about the benefits of advertising on cable, visit the Cable Advertising Bureau's website at