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Advertising is vitally important to the success of most businesses. Without advertising, customers may not know a business exists, let alone what it offers and how it could benefit them. There are many different types of advertising, each with its own costs and considerations. When examining media advertising costs, it is important to do a cost-benefit analysis that estimates whether the increase in business will more than compensate for the media advertising costs.
The major source of media advertising costs that may first jump to mind is the ad buy, or the amount it costs to run an advertisement in a given type of media for a set period of time. These media advertising costs tend to dramatically increase depending on the amount of people exposed to the media and how many other companies are competing for the same time or space; for instance, an ad in the local newspaper will cost far less than a 30-second television commercial during a major sporting event, both because it is far more valuable and there is much higher competition for available spots.
In a newspaper or magazine, factors that can affect the media advertising costs associated with the initial buy include the size of the ad, whether it is in color or black and white, where it is placed, and how long it runs. In some cases, advertisers can negotiate a better price by agreeing to run the ad longer. In television, the popularity of the channel and program, length of the ad, time slot where it is aired, how many times it will run per day or week can all vastly affect the ad buy price.
Another important source of media advertising costs is the development and creation of the advertisement itself. For print ads, such as newspaper ads, flyers, and billboards, costs may include hiring a designer or photographer to create the layout, design logos, or take pictures to use in the ad. Labor and supply costs, such as the staff time and supplies it takes to print 4,000 flyers, or the costs associated with erecting and maintaining an outdoor billboard, may also be a consideration.
For television, film, and online advertisements, a huge area of media advertising costs may include the production of a commercial. This may include hiring writers, directors, actors, cameramen, and technicians, paying for a location or studio, renting lights, cameras, costumes, and props, and feeding the cast and crew daily. Hiring a recognizable actor will increase these costs dramatically, while creating a text-only commercial might reduce costs significantly.
Internet media advertising costs are a very different kettle of fish than traditional advertising methods. Many businesses rely on pay-per-click advertisements, which direct a user to the company website from another location. Usually, the business will pay a few cents to the website owner for posting the ad, or may sign up for a monthly-fee service that distributes ads over related member sites. Pay-per-click advertising can be an excellent way to add traffic to a website, and even serves as an Internet billboard for those that choose not to click on the ad.