Understand the Big Picture

When we hear from dealers who say that they tried television advertising in the past and it “didn't work,” we ask what type of TV they used.

Was it local cable insertion like (ESPN, CNN, CNBC) or a local broadcast affiliate (ABC, NBC, or CBS)?

It's critical that we understand what options they chose, and why, before we can do a post mortem on the campaign and begin to build a new and successful TV ad campaign.

Most dealer owners new to television advertising often do not understand the implication of the type of TV they choose. They often do not understand the true cost efficiencies of each choice, or the best way to employ the inherent advantages of both cable and local broadcast television.

I imagine that it is easy to gloss over these details when you are excited about your first campaign. However the responsibility is on dealers to educate themselves on the true and very best option.

To expect a dealership to enjoy a surge in response from a modest micro-targeted cable audience is just not realistic.

Case in point, in most markets, the audience for ad-insertion cable does not register even 1,000 viewers for each spot over specific time periods.

For an auto dealer to expect immediate return from an audience of 1,000 viewers is to ignore the fact that only 1% of these audiences are actually in the market to buy a new car, a new home or furniture.

Reaching car buyers, market-wide, 10 at a time, is simply not a cost-efficient way to advertise on television.

Broadcast TV, used properly, is a cost-efficient way to target mass audiences with a focus on types of consumers through careful program selection.

But, just as with cable, dollars also can be easily wasted when advertisers broadcast at the wrong times or wrong days. Proven buying windows have been established, and there are now predictable patterns for all types of auto buyers.

When you now know where and when these buyers are watching television, you can eliminate any possible wasted spending in advance.

So if you are an automotive advertiser, when you reach an audience size of 100,000 in a broadcast television program, and then again apply the fact that 1% of these folks are actual buyers, you now have an audience of 1,000 auto buyers.

This is why local broadcast television is so cost efficient. Think carefully about choosing between cable or broadcast television to be sure that you can handle the level of response broadcast television will bring!

Myth: Local ad-insertion cable TV is often regarded by advertisers as being “cheaper” than local broadcast television.

Fact: When we analyze the numbers, we see cost-per-thousand viewers of actual cable audiences in the $100-200 range compared with $5-20 for local broadcasts.

So if cable is more expensive in those terms, why do dealers believe it costs less? It may depend on how they received their understanding of cable local broadcast television. Was it learned with actual research, or was it a “pitch” by a sales representative or ad agency?

If your goal is for immediate payoff from spending in TV (by immediate, I mean one to two months), you will need to find a way to tell your story to as many potential buyers as quickly as possible and for the least amount of money.

Here the cost efficiencies of local broadcast television (and for you advanced marketers, the local broadcast television station's website) become your advantage.

There is no right or wrong choice between local affiliate broadcast television or local ad-insertion cable television, just good or bad cost efficiencies based on the real goal of your business during your TV campaign.

Choose wisely. Your dealership profitability hinges on your decision.

Adam Armbruster is a partner in the retail and broadcasting consulting firm Eckstein, Summers, Armbruster and Co., Red Bank, NJ. He can be reached at [email protected] or 941-928-7192.

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