Radio and TV Advertising

Many entrepreneurs believe that TV and radio advertising is beyond their means. But while national TV advertising is out of the entrepreneur's price range, advertising on local stations and, especially, on cable television can be surprisingly affordable. Armed with the right information, the small-business owner may find that TV and radio advertising can, in fact, deliver more customers than any other type of ad campaign. The key is to have a clear understanding of the market so the money spent on broadcast advertising isn't wasted.

Planning is especially essential for the businessperson approaching broadcast advertising for the first time. When you're first starting out, it's important to educate yourself about the media, and the only way you can do that is to talk to a lot of people. This includes advertising representatives from TV and radio stations, other business owners, and your customers.

Experts suggest an entrepreneur take the following steps before diving into broadcast advertising:

• Establish your target market by asking yourself who your customers are and, therefore, who you want to reach with your advertising. This may seem obvious, but many advertisers don't have any idea who they're selling to.
  
• Set a rough budget for broadcast advertising. Come up with an amount that won't strain your business but will allow you to give broadcast advertising a good try. Many stations suggest running ads for at least three months. This can easily cost several thousand dollars for a TV campaign. Radio generally costs a little less, although rates vary widely depending on the size of the market, the station's penetration, and the audience of the show on which you want to advertise.
  
• Contact sales managers at TV and radio stations in your area and arrange to have a salesperson visit you. Ask salespeople for a list of available spots on shows during hours that reach your target audience.
  
• Talk to other businesspeople in your area about their experiences with broadcast advertising. While salespeople from TV and radio stations can be very helpful, they are, after all, trying to sell you something. It's your responsibility to be a smart consumer.
  
• Ask about the "audience delivery" of the available spots. Using published guides (Arbitron or Nielsen), ask the salesperson to help you calculate the CPM (cost per thousand) of reaching your target audience. Remember, you are buying an audience, not just time on a show, and you can calculate pretty exactly how much it's going to cost you to reach every single member of that audience.
  
• Inquire about the production of your commercial. As a general rule, TV stations charge you to produce your commercial (prices range from about $200 to $1,500), while radio stations will put your ad together for free. However, some independent TV stations will include production for free if you enter into an agreement to advertise for at least three months. And with a similar contract, some radio stations will provide a well-known personality to be the "voice" of your business at no extra cost.

Compare the various proposals. Look at the CPMs and negotiate the most attractive deal based on which outlet offers the most cost-effective way of reaching your audience. Buying time well in advance can help lower the cost. For TV ads, stick with 30-second spots, which are standard in the industry. And keep in mind that the published rates offered by TV and radio stations are often negotiable. Generally, rates vary widely during the first quarter of the year, and sometimes during the third quarter or late in the fourth quarter, traditionally slow seasons for many businesses. But expect to pay full rates during the rest of the year or during popular shows or prime time.

Excerpted from Start Your Own Business: The Only Start-Up Book You'll Ever Need, by Rieva Lesonsky and the Staff of Entrepreneur Magazine, © 1998 Entrepreneur Press