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What Factors Affect the Cost of Commercial Advertising?

By Nicole Etolen
Updated Feb 29, 2024
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Although many people think of commercial advertising as the advertisements seen on television, the term actually refers to any type of ad content that serves the interests of a company or entity involved in commerce, also known as sales. It can refer to ads in magazines, newspapers, billboards, television, or anywhere else that consumers can view ads. The main factors that affect the cost of commercial advertising are the fees involved with creating ads and the fees associated for running those ads in media.

Creating an advertisement is a major factor in the overall cost of commercial advertising. For graphic ads that appear in magazines or on billboards, a company's marketing division typically works with a graphic artist or a team of artists to take a general idea and turn it into something that will capture the attention of viewers. The more staff the company needs to hire to bring a vision into reality, the more expensive the ad will be. To help defray some of the costs, businesses may use unpaid interns to do some work, but they will still need someone to supervise projects.

Once a graphic ad is created, the next major factor that affects the cost of commercial advertising is where the ad is placed. Typically, the more views the media can bring to the ad, the higher the cost of placing it. For example, placing an ad in a new magazine with a low circulation costs less than placing it in a well-established one with a readership of millions of people. Placement within publications is also a major cost factor. Ads in prime locations with high visibility cost more than ads located in the back of a magazine, or below the “fold” in a newspaper or on a website.

The cost of commercial advertising using video ads, such as for television or digital video discs, can vary significantly depending on the complexity of the video. Filming a video using a hand-held video camera and available staff is usually fairly inexpensive, but the result may look shaky or unprofessional. Most large corporations hire a professional videographer, director, and acting staff to film their commercials. The costs for a professional commercial vary depending on the experience of the staff and the popularity of the actors used. For example, using an unknown actor hired through an open casting call is typically significantly less expensive than using a well-known celebrity.

As with graphic ads, the main factor affecting the cost of commercial advertising on television is where the ad is placed. In this case, however, placement revolves around timing rather than location. Commercials that air during the middle of the night, when fewer viewers are watching, cost much less than those aired during “prime time,” the hours after the end of the traditional workday when many individuals tune in for popular programming. Commercials placed during large sporting events or special episodes of popular shows can cost millions of dollars, while ads placed during less popular shows typically cost much less.

Companies with a budget that allows hiring extra staff should considering hiring a trained marketing director or public relations expert. They are trained to take into account all the factors that affect the cost of commercial advertising and devise plans that work within companies' budgets while still maximizing exposure. For companies with small budgets, an inexpensive ad that reaches just the target demographic can be as effective as an expensive ad that reaches millions of people with different tastes and preferences.

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