August 20, 2007
Once considered prohibitively expensive, advertising on television is fast becoming a viable option for small businesses, thanks to new online services that provide everything from customizable templates for commercials to commercial-placement services.
Spot Runner Inc., Los Angeles, Pick'n'Click of Fort Lauderdale, Fla., and Spotzer Media Group BV of the Netherlands are among a new breed of online TV-ad production companies that offer an inexpensive and practical option for small firms.
Spot Runner gave timely help to BizFilings.com, a 30-person firm in Madison, Wis., that allows customers to form legal entities without hiring a lawyer. Although BizFilings has been in business for 10 years, it hadn't developed national brand recognition. Meanwhile, new rivals have continuously popped up, making it increasingly important for the company to stand out in the markets where it competes.
BizFilings turned to Spot Runner, which has an online library of templates -- already-produced commercials cataloged by industry and that require only customized voice-overs and titles. "I spent an hour browsing the library and a half-hour writing the voice-over," says BizFilings Marketing Director Troy Janisch. Within two days, the company had a finished TV commercial. The company previewed it and approved it online. "We were on the air within three weeks," adds Mr. Janisch.
The cost: Mr. Janisch says that after paying Spot Runner's standard one-time set-up fee of $499, BizFilings has paid an average of $45 each time its 30-second commercial has aired regionally on cable television networks such as CNN, ESPN and Fox news, and an average of $1,650 when the commercial ran nationally on those networks. And in every market where the commercial has run, he says, BizFilings has seen a "modest to major" boost to its business. BizFilings is a unit of Dutch publisher Wolters Kluwer NV.
Choosing a template for a commercial won't express the uniqueness of a business or produce something as slick as a custom-designed commercial created by a leading national agency. Indeed, it's not always possible for a small firm to find the right TV spot. "The [Spot Runner] library has a great selection of TV spots for realtors and other common types of businesses," says Mr. Janisch. "The more unique your business is, though, the more challenging it is to find a spot."
Still, for a small business on a budget, it can be cost-effective. Tony Martinelli, office manager at a 10-person dental office in San Diego, estimates that a three-week TV campaign produced by Spot Runner that the office ran earlier this year in San Diego County produced enough new business to pay for the cost of the ad more than six times over.
After running TV ads for the past 15 years or so, Clarke Auto Inc., a Hudson, Ohio, auto dealership, last year hired Pick-n-Click, a service run by the Zimmerman Agency of Omnicom Group Inc. The general manager of the dealership, Darrell Fall, says it's easier, quicker and more effective to point to what he wants rather than explain it. Pick-n-Click offers a library of video to which customers can add titles or voice-overs, though for now it caters only to auto dealers.
"We've used this to help eliminate time and to produce better ads," Mr. Fall says. Before airing any commercial he has created, he adds, he always consults his advertising agency. "I'll have them check it because they're the professionals," he says. "I know my business, but they know the commercials."
Most small businesses that use a template-driven commercial-creation service compete in different markets, so there is little risk of rivals choosing the same ad. Pick-n-Click, Spot Runner and Spotzer, for example, all offer exclusive rights to a commercial in the markets in which the customer operates for at least as long as the commercial runs. But if a company competes on a national basis, it may want to go a step further and pay to have the ad template permanently removed from the library, as BizFilings did.
"It's a very creative ad," says Mr. Janisch. "People are convinced that the guy in the ad works for BizFilings."
Of course, just because such services make it more affordable for small companies to create and air TV commercials doesn't necessarily mean that small firms should do so.
For one thing, TV commercials aren't as all-powerful as they once were, says Peter Kim, senior analyst at Forrester Research Inc. in Cambridge, Mass. The rise of digital video recorders makes it easier for consumers to skip commercials, for example, says Mr. Kim, adding that the effectiveness of TV commercials depends a lot on a company's target customers.
Companies targeting 18- to 26-year olds, for example, may not want to advertise on TV because people in that demographic spend more time online (12.3 hours weekly, according to Forrester data) than they do watching TV (10.7 hours weekly). Boomers between the ages of 51 and 61, meanwhile, spend only 6.6 hours online weekly but 13.7 hours watching TV. A small ad budget "might be better spent on alternative media," says Mr. Kim.
Greg Sterling, principal analyst at Sterling Market Intelligence in Oakland, Calif., says, "These spots ideally would complement other ads in other media and/or online." He concedes, though, that many small businesses can't afford a "multifaceted strategy."
Some of the new breed of online services specialize only in the placement of TV ads.
Softwave Media Exchange Inc., based in Irvington, N.Y., offers an online system for placing already-created commercials. Its Web site, SWMXTV.com, works as an online marketplace for buying, selling and managing advertising time. In return for transaction fees on executed orders, the site lets businesses tailor TV campaigns to meet their budget, audience demographics, desired time of day and region.
Rather than having to negotiate the process with multiple stations or networks to find out about rates and available times, firms can see a host of networks and stations in one place and do all the negotiations quickly and simply in one spot. After a firm posts its campaign and price parameters on the site, broadcasters can accept, refuse or counter those parameters online.
As an indicator of just how big this market niche might become, some large companies are exploring it. Google Inc. is running a trial of a similar service for placing commercials with satellite-TV provider EchoStar Communications Corp.
--Ms. Borzo writes about business and technology from California. She can be reached at email@example.com.