Thursday, January 11, 2007

Business of Media 1: Four Types of Television Commercials

In television, there are four basic types of commercials that run everywhere: Network Commercials, Local Spot Commercials, National Spot Commercials, and Direct Response.

* Network Commercials - These commercials are sold by the broadcast or cable network and are part of the feed that goes to local stations. These are spots that run simultaneously across the country. If you buy a network commercial during Desperate Housewives, that commercial is going to be seen by every viewer of that program in every household in the country. It doesn't matter if they are in Denver or Dallas or Durham.

* Local Spot Commercials - These commercials are sold by the local television stations or cable providers in each individual market. These spots run only in the market in which they are purchased. If you buy a local spot commercial during Desperate Housewives in Dallas, you would purchase it directly from the Dallas ABC affiliate (WFAA-TV) and it would run only in Dallas. If you wanted it to run in Denver or Durham, you would have to contact those local stations and purchase from them directly. Local Spot Commercials tend to have lower production values. Imagine the local car dealer standing in front of the car lot swinging his arms and talking about the great deals at Westway Ford.

* National Spot Commercials - These commercials are sold in a couple of different ways. Primarily, each local station has a National Sales Manager that works with a National Television Rep Firm who in turn works with media agencies to complete this buy. National is used when an advertiser wants to cover several markets with their advertising message, but doesn't want to buy network. There could be many reasons not to buy network. The company might be regional so a national buy would deliver their message to people that can't shop in their stores. They might be testing a new product or a new advertising message in a few local markets. They might have different advertising messages for different parts of the country.

* Direct Response Advertising - Direct Response is an entirely different process. These are predominantly the commercials that have a phone number at the end so that you can call and purchase the new Vidalia Chop Wizard or whatever new widget they are selling. By definition, there is a way for you to "respond directly" during the commercial. These commercials are often used to fill unsold inventory. Sometimes, they are purchased and sometimes there is a revenue-sharing agreement in place between the DR advertiser and the local station. Each situation is unique.

--Carter Cathey
(c) 2007

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