How Much Does a Commercial Cost?

Last Updated on May 25, 2024
Written by CPA Alec Pow | Content Reviewed by Certified CFA CFA Alexander Popinker

Commercials are a pivotal component of advertising campaigns, allowing brands to creatively engage audiences. But producing and airing these influential media spots requires substantial investments. What exactly impacts pricing and budgeting for television, radio, streaming, and digital commercials?

Commercial expenses vary based on factors like production scale, length, target audience, media format, placement prominence, seasonality, celebrity talent, and numerous other variables. This comprehensive guide examines the key elements influencing pre-production, filming, post-production editing, media buying, and placement costs across TV, radio, and digital. Let’s start by breaking down the main drivers of commercial production budgets.

How Much Does a Commercial Cost?

For a high-quality 30-second national TV commercial, total costs typically range from $500,000 for simpler production up to $5 million for complex shoots and premium placement during major events like the Super Bowl.

More modest local TV commercials can cost as little as $5,000 for basic production and off-peak airtime buys. Meanwhile, national radio spots run $5,000 to $50,000 and digital video ads from $10,000 to $250,000+ based on platform and targeting parameters.

Media Culture states that the cost of delivering a 30-second cable television commercial for a performance marketing campaign can range from as low as $20 per spot to $3,000 or more per spot. However, a branding spot meant to drive brand awareness on a highly rated network program can be upwards of 20 times that cost.

Creative Humans reports that the average cost for a 30-second ad spot on local TV can be just $5 to $10 per 1,000 impressions (CPM). In contrast, advertising on popular national networks can cost significantly more.

The article emphasizes that in addition to airtime costs, there are also expenses associated with producing the commercial, such as editing, motion graphics, voice-overs, music, and color correction.

WordStream provides insights into the costs of online advertising, which can be a more cost-effective alternative to traditional TV commercials. They state that a highly targetable Connected TV (CTV) ad on a platform like Hulu can range anywhere from $20 to $40 CPM. Similarly, an online video ad on a premium website can range from $12 to $20 on the low end and upwards of $40 on select inventory.

Top Draw compares the costs of online and offline advertising, stating that the average cost to reach 1,000 people with online advertising ranges from $3 to $10, while the average cost to reach 1,000 people with traditional/offline advertising is $22 and up.

They emphasize that while it’s easy to pour funds into campaigns, seeing real results requires a strategic approach.

Pre-Production Planning and Storyboarding

  • Creative concept development and storyboarding typically ranges from $10,000 to $50,000 based on length, complexity, and any market research conducted.
  • Scriptwriting, talent casting, and location scouting can add $10,000 to $100,000+ combined depending on scale.

Production Talent and Crew

  • Producers, directors, camera operators, and technical staff earn $5,000 to $20,000 per day depending on experience.
  • Actors may receive $1,000 to $100,000 or more depending on experience, residuals, and exclusivity agreements.

Filming Equipment Rentals

  • Cameras, lighting, audio gear, sets, and expendable costs range from $10,000 to $100,000 daily.
  • Studio rentals span $5,000 to $25,000 daily while location fees can hit $20,000+.

Post-Production Editing and Visual Effects

  • Editing costs $5,000 to $100,000 based on editor skills, demand, and editing suite rates.
  • Visual effects range from $10,000 to over $500,000 based on scene complexity, techniques required, and VFX studio.

Music Licensing and Original Scoring

  • Known songs cost $10,000 to $100,000+ depending on popularity and usage rights.
  • Original custom composed scores span $5,000 to $50,000.

Higher production value elevates costs but improves audience impact. Next let’s examine media placement expenses.

Commercial Airtime and Placement Costs

Local Broadcast TV Spots

  • Off-peak airtime: $500 to $5,000 per spot
  • Primetime slots: $2,500 to $20,000 based on market size and viewership numbers

National Broadcast and Cable TV Spots

  • Basic primetime placement: $200,000 to $500,000 per spot
  • High-profile shows or events: $500,000 to $5 million per spot

Digital Video Ads on Streaming Platforms

  • YouTube pre-roll ads: $0.10 to $0.30+ CPM
  • Hulu or Amazon Fire TV: $20 to $60+ CPM

Radio Spot Rates

You might also like our articles on the cost of radio ads, billboard advertising, or mall advertising.

  • Local placement: $500 to $5,000 per spot
  • National networks: $10,000 to $50,000 per spot

More prominent airtime increases costs substantially but boosts visibility and engagement. Now let’s look at factors that influence pricing.

Factors Impacting Production and Placement Costs

Length of Commercial

  • 30 second ads cost significantly more than 15 second short spots across all media formats

Level of Production Quality and Complexity

  • Special effects, high-profile celebrity cameos, and action sequences raise production costs but support premium placement

Media Market Size and Target Audience

  • Larger geographic media markets and viewership numbers demand higher rates
  • Specific desired target demographics also impact media buying costs

Primetime vs Off-Peak Airtime Placement

  • High viewership programming segments like primetime demand exponentially higher placement rates

Seasonality of Airtime Placement

  • Holiday seasons, sporting events, and premieres spike demand and rates

Now let’s consider a complete example national TV commercial production budget.

Example National TV Commercial Budget

Pre-production: $100,000

  • Storyboard creation: $20,000
  • Scriptwriting and revisions: $20,000
  • Casting and scouting: $40,000
  • Creative team strategy meetings: $20,000

Production: $1,250,000

  • Director and crew salaries: $250,000
  • Actor, host, and voiceover fees: $200,000
  • Studio and location rentals: $150,000
  • Camera, lighting, audio equipment: $200,000
  • Props, sets, wardrobe, makeup: $100,000
  • Catering, travel, expenses: $50,000
  • Shooting days: $300,000

Post-production: $300,000

  • Lead editing: $100,000
  • Visual effects: $100,000
  • Original soundtrack and scoring: $50,000
  • Color correction and finishing: $25,000
  • Rendering and duplication: $25,000

Total Production Budget: $1,650,000

This example provides an idea of the substantial investments required for a high-quality national TV ad campaign. For a local spot, production may cost just $20,000 to $50,000 by simplifying the script, visuals, and editing.

How To Control Commercial Costs

  • Compare bids from multiple production companies and negotiate rates
  • Consider more affordable placements like radio, streaming ads, influencer content before TV
  • Reuse quality footage and music across multiple ads when possible
  • Test inexpensive late-night and low-viewership airtime first to quantify ROI
  • Start with smaller local ad campaigns and expand nationally once effectiveness is validated
  • Continually optimize placements and spending based on performance analytics

TV CommercialCareful budgeting, testing, and measurement maximizes ROI on commercial advertising campaigns.

Steps for Planning a Commercial Campaign

  1. Define campaign goals and target KPIs based on business objectives
  2. Research production options and estimated costs for desired quality level
  3. Determine ideal placement formats and channels based on intended audiences
  4. Obtain quotes for airtime rates and availability across desired programming
  5. Factor in performance analytics costs to support campaign optimization
  6. Build versions at different duration lengths between 15-60 seconds
  7. Allow for multiple localization versions if scaling to regional markets
  8. Build in budget reserves for any necessary revisions or delays
  9. Negotiate discounts based on overall campaign scale and extended placements
  10. Finalize budget approval with executives and finance stakeholders

Case Study 1: Local Small Business TV Campaign

Charlie’s Plumbing plans to air three 30-second TV commercials for its local San Diego market.

Production costs for the three ads total $27,000:

  • Scripting, storyboards: $6,000
  • Local crew: $12,000
  • Equipment, props: $3,000
  • Editing: $6,000

Media placement costs on local stations total $18,000:

  • Broadcast/cable spots: $6,000 each
  • Digital streaming pre-rolls: $2,000 each

Total campaign cost: $45,000

This achieves extensive reach across TV and streaming for a limited local marketing budget.

Case Study 2: National CPG Brand Campaign

Tide plans to produce a new 60-second TV commercial and air it nationally.

Production costs total $1.8 million:

  • Storyboarding, casting: $200,000
  • Director, crew: $400,000
  • Set design and special effects: $300,000
  • Celebrity spokesperson: $500,000
  • Editing and post-production: $400,000

Media placement costs total $7 million:

  • Primetime slots on NBC, CBS, ABC: $500,000 each
  • NFL and MLB sponsorships: $1 million each
  • YouTube pre-roll network: $2 million

Total Campaign Cost: $8.8 million

The large production scale and premium placements drive significant costs to reach a national audience.

Final Words

Commercial costs vary tremendously based on the production scale, duration, media formats, and placements selected. While a high-end national TV spot may cost millions, local radio and TV ads can be produced for $20,000 to $50,000 with cost-efficient execution.

By balancing production value with affordable placements and continually optimizing based on performance data, brands can maximize advertising budget efficiency and returns across both national and local campaigns.

Frequently Asked Questions

How much does a local commercial cost?

The cost to produce a professional 30-60 second local TV commercial usually ranges from $5,000 to $50,000 depending on the shooting scale, crew size, talent, editing, and overall production quality. Airtime costs are additional.

How much does a 30 second commercial cost?

The average cost to air a 30-second ad nationally on broadcast and cable TV is $200,000 to $500,000 providing general primetime placement without considering extremely high-viewership programming like major sporting events.

How much does a 15 second commercial cost?

A 15-second commercial can cost about 50-75% less than a 30-second version when comparing similar quality production and placement across TV, radio, and digital media formats.

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