Buying a Schedule on TV is Cheaper Than You Think.

Posted by truecreek on July 16, 2009 under More Dam News | Be the First to Comment

Retro TV CommercialIt was just a matter of time.  Back in the day, a rep could easily count on three or four local auto dealers to make his/her budget.  No more.  The media gravy train at the local auto dealer has stopped. Now the real cold calling begins.

Bloomberg:   U.S. TV broadcasters, struggling to replace a 20 percent drop in automotive advertising revenue, are turning to pawn shops, plastic surgeons and other nontraditional sources to fill airtime.

Local station owners like Nexstar Broadcasting Group Inc. and Gray Television Inc., whose revenue dropped after bankrupt General Motors Corp. and local dealers slashed marketing, are selling mortgage brokers and even landscapers on the notion that TV is affordable.

Across the U.S., the price of an average 30-second local TV commercial tumbled as much as 20 percent last year from 2007, according to the Television Bureau of Advertising, a New York- based trade organization. Auto ad revenue at local stations, down a fifth in 2008 from the year before, plunged another 52 percent in the first quarter, the TV Bureau said.

“A lot of local retailers, like the portrait shop or the pet store, haven’t advertised on TV before because they think they can’t afford it,” said Robert Prather, president of Atlanta-based Gray. “We’re out just beating bushes that we should have been doing a long time ago.”

A half-hour of prime-time TV typically contains 22 minutes of programming and eight minutes of ads, two of which are for local commercials, according to the Television Bureau. Rates depend on how many viewers are watching.

The price of an average 30-second ad placed on a local TV station last year ranged from $6.66 per 1,000 viewer homes in the early morning to $27.29 in prime time, according to the TV Bureau. Prime hours, when stations usually have their largest audience, are generally 8 p.m. to 11 p.m. In 2007, the same rates were $8.09 and $34.12, the bureau said.

“One of the pitches made by stations is that it’s cheaper than you think, particularly if you were looking at prices from a year ago,” Gary Belis, a spokesman for the New York-based TV Bureau, said in an interview.

Nexstar, which said auto ad sales dropped about 40 percent in the March quarter, has sold airtime to pawn shops and mortgage businesses in the Northeast and to ranches in the West, Chief Executive Officer Perry Sook said in an interview.

“The greatest opportunity in all of our markets is local businesses not currently doing business with our TV stations,” said Sook, whose Irving, Texas-based company operates or provides services to 63 stations in markets including Fort Wayne, Indiana, and Jacksonville, Florida.

Nexstar’s new-to-TV advertisers include Snare & Associates Mortgage Services LLC in Hollidaysburg, Pennsylvania, near Pittsburgh.

“I started a new business and needed to get my face out there,” Chief Executive Officer Anthony Snare said in an interview. “It worked.”

Snare said he bought packages of 30-second spots from Nexstar at $1,000 to $4,000 a month.

Gray, whose 36 stations in markets including Madison, Wisconsin, and Augusta, Georgia, received 19 percent of ad revenue from automakers and dealers last year, is now booking ads from landscapers and plastic surgeons for the first time, said Prather. He declined to predict how much Gray would make this year from first-time TV advertisers.

The new ad sources aren’t likely to entirely replace the decline in auto revenue, analysts and TV executives said.

“The big issue is that it takes 10 or 12 small ones to make up for some of the big car dealers we’ve had in the past,” Prather said.

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