Slick ad campaigns now are affordable to small firms
A cable television commercial for the Redondo Beach restaurant Eat at Joe’s features high-definition video, a cast of 40 and a catchy jingle that will leave you humming.
Particularly enthusiastic about the slick new ad was Alex Jordan, the restaurateur who decided to take the plunge into television advertising after meeting an Altadena couple who were starting their own ad agency. They wrote and produced the 30-second spot for $5,000, and they helped him broker a deal to deliver it to 300,000 homes for $1 every time it ran.
FOR THE RECORD:
Advertising: An article in Wednesday’s Business section about small business and the cost of advertising said the average cost to air a 30-second commercial on network TV was $921. It should have said that $921 was the average cost to air a 30-second ad on a network-affiliated TV station in a major media market. —
In a still tough economy in Southern California, hard times in advertising and media have led to a surprising bonanza for small businesses seeking to market themselves. Across all media, the cost of developing marketing campaigns, creating ads and placing them is down — making marketing more affordable than it’s ever been.
At the same time, as smaller businesses test the advertising waters, they’re providing much-needed work for start-up production companies and graphics artists, and filling space at TV stations, on billboards and in other media that would otherwise go unsold.
Bill Burnett and Debrah Lemattre, an entertainment industry couple struggling through a slow period, shot the Eat at Joe’s spot with a digital camera and edited it at home. They set up all the shots in one day and cast it with actors willing to work for free.
Verizon Communications, eager for advertisers on its FiOS TV service, which is sent through telephone lines to about 300,000 subscribing households in Southern California, charged a buck a pop.
According to the American Assn. of Advertising Agencies, a typical 30-second television commercial costs about $130,000 to make. “Eat at Joe’s,” with 20 shots and 40 actors, would have cost about $200,000 several years ago, Burnett estimated.
But the economic downturn has made the process cheaper at every turn. Producers will work for less, advertisers are charging less, and businesses — burned by the recession but needing to reach out to new customers — are paying less.
Nationwide, the average cost to air a 30-second spot on network TV was $921 last year, down from $1,109 the year before, according to Nielsen Co. Spots on cable stations, always significantly cheaper than networks, were also down, experts said.
As a result, many mom-and-pop businesses can afford a level of advertising that was previously beyond their reach. Some are embracing the opportunity, hoping that visibility on TV, billboards and the Internet will help them recover from tough times.
“Smaller clients can definitely get more for less now,” said Michael Knott, senior vice president and media director for West Coast operations of the advertising agency Draftfcb. “There’s more of a willingness of vendors to work with you … offering lower rates and more value for your money.”
Jordan said the TV ad — his first — boosted business at the diner by about 10%. It worked so well, he said, that he’s planning to expand the commercial’s reach by showing it on the larger Time Warner Cable system starting next month, paying $5 to $15 per showing depending on the time of day.
“I was a little nervous,” Jordan said. “I didn’t want it to be cheesy. But it turned out really well.”
Nationwide, the cost of producing a TV spot dropped about 5% in 2008, the most recent year for which the American Assn. of Advertising Agencies has figures. The reduction was largely the result of decreases in the length of time used for shooting and the salaries paid to the director, actors and producers.
The advertising market is beginning to recover after a profound slump last year, but experts say it will be some time before prices hit boom-time levels — if they ever do.
As banks, automakers and large retailers reduced their marketing budgets or went out of business during the economic downturn, media companies began to intensify efforts to sell ads to smaller businesses.
Billboard operators offered better placement and promotional rates, while TV stations and cable operators sent salesmen to meet with local businesses that rarely advertised. Newspapers lowered their prices for ads, and graphic designers offered websites for less. Even television networks reached out to smaller businesses, helping them hone pitches to be aired on affiliated stations.
In San Diego, Adios Pest Control decided to advertise on TV for the first time after its owners were approached by representatives of NBC-TV, said co-owner Jeremy Sykes. The pest control company is paying an average of $51 each time the spot airs, and NBC did not charge extra to produce it.
By comparison, Sykes said, he asked an advertising agency a few years ago about making a commercial and was quoted a price of $10,000 for production alone.
Bill Weisman, the project manager who oversaw the pest control spot for NBC Local Media, the network’s in-house advertising production operation, said the commercial was part of an effort to reach out to smaller businesses after the slump in advertising from big national firms.
Ads for smaller businesses are also popping up on local billboards — even at sites that traditionally were dominated by large national advertisers.
Jodi Senese, executive vice president at CBS Outdoor, the network’s billboard division, said that in the Los Angeles area, local restaurants and specialty stores were increasingly signing up for billboards in choice locations that were previously held by large banks, automakers and other national concerns. Trade schools have also been buying more space.
The billboard business has always been dominated by local advertisers, but now smaller players are getting into the act, said Jeff Golimowski, communications director of the Outdoor Advertising Assn. of America. “We’re really starting to see increases in the amount of small businesses that are using outdoor advertising,” he said.
For Jordan at Eat at Joe’s, increased advertising — at lower prices — has been key to his efforts to recover from a big slump during the downturn.
“Newspapers and everybody else has been willing to give you deals because fewer people are advertising,” Jordan said. “If you’ve got the money, you can get the deals.”