Why TV Advertising Is Still Worthwhile for Small Businesses

Kris Hartner is always on the lookout for the next big thing in running shoe technology. But when it came to promoting his Naperville Running Co. stores in Illinois, the founder and CEO went “old school” with a string of spots on local cable TV.

The commercials, which debuted in March 2018 on ESPN and HGTV, sparked an uptick in sales that month, he said. “Due to [bad] weather business should have been down, but we were up 20% and we know it was due to the ads [because] we had people come in who didn’t know our stores, which was great,” said Hartner.

Like Naperville Running, independent retailers and brands around the country are increasingly discovering (or rediscovering) the power of local TV advertising, a cost-effective and targeted marketing tool that continues to hold its own against the growing popularity of social media.

According to a Q3 2018 report from Nielsen, television remains the most popular media choice among U.S. adults age 18 and over. On average, they spent 3 hours and 44 minutes per day watching live TV, plus another 30 minutes watching time-shifted TV.

Here, media experts and retailers from around the country share how to get the most out of this “old tech.”

The Where & Why

When it comes to connecting to consumers today, there’s not one medium that can do it all, but TV advertising continues to be a powerful advertising option to gain awareness.

Dave Levy, co-owner of Hawley Lane Shoes in Connecticut, has been advertising on local TV news shows on and off for a decade and uses it as a complement to social media. “We do Facebook and Twitter, but TV is getting us new customers,” he said.

In order for ads to be impactful, though, retailers must be strategic.

“There are lots of places you can spend your money — billboards, radio,” said Jim Sajdak, president and CEO of Stan’s Fit For Your Feet, a fashion-comfort chain in Wisconsin. “You have to choose your arsenal. Direct mail talks to our existing customers, while TV talks to existing ones and those we’re trying to acquire.”

Bruce Mittman, owner of Mittcom, an advertising agency based in Needham, Mass., advised that companies first must understand their store’s demographics and plan accordingly. “Today, TV advertising is more program-oriented than station-oriented,” he said. “You have to find out what programs are truly making an impact against the demographic you’re trying to reach.”

Mittman suggested targeting news and sports programs since they’re live and tend to be less DVRd.

However, Paul Karaz, owner of Paul Karaz Shoes in Fayetteville, N.Y., who’s advertised on TV for 30 years, takes a less calculated approach. “I’ve found trying to pick a station that matches your customer profile is close to impossible,” he said. Instead, he relies on his instinct, opting for the Hallmark Channel during the holiday season.

The Price is Right

Although small businesses probably can’t afford a spot during the Super Bowl, local TV commercials can be surprisingly cost-effective. According to experts, ads in large markets such as Chicago could run about $3,000 for a 30-second spot; however, a similar ad in Madison, Wis., could cost just $200.

And Hawley Lane Shoes has paid as little as $2 for ads on local cable. Levy pointed out that these networks often have remnant, unused advertising spots that can be inexpensive — or even free — for advertising partners.

The retailer has managed to snag some significant deals. This year, Levy said the company will air 25,000 to 30,000 spots, up from 18,000 in 2018. “It’s all about how you negotiate,” he advised.

Advertising industry insider Darren Magarro, president of marketing firm DSM based in Mahwah, N.J., agreed that TV ads can come cheap. For instance, he said a 30-second spot on Fox News in New Jersey’s Bergen County West between the hours of 5 a.m. and 9 a.m. can cost as little as $10.50, while the more densely populated Bergen County East region can cost $18 for the same spot.

Retailers can even home in on an area by zip code in order to avoid waste, according to Josh Goldman, director of video investment for JL Media based in Union, N.J. “You’re not buying an entire market — that would cost a lot of money,” he said.

For stores preparing an advertising budget, Mittman suggested allocating between 5% and 7% of gross sales, with 3% as a good starting point. “It’s about what retailers can affordably do to reach the most customers, as well as sustain over time,” he said. “You don’t want to buy an ad a week. You want to make a commitment. It’s about consistency.”

Going Into Production  

Getting a favorable deal on ad space is just one part of the advertising budget, though. Retailers must also figure in the cost of producing an ad.

While some businesses have in-house teams that handle their commercials, other companies tap advertising agencies and cable providers to put together their campaigns.

Morgan’s Shoes in Madison, Wis., reached out to Peak Creative, a local advertising and marketing agency, for its campaign, which aired on network affiliates. Since the store had a tight budget, co-owner Steve Knuteson worked with the retailer’s vendors to pick up part of the tab. The store reached out to Birkenstock, Ecco, Naot and Ugg, which all agreed to participate in individual commercials highlighting their brands.

Naperville Running Co. also took a similar approach: Vendors such as Superfeet and Hoka One One sponsored its ads in exchange for a subtle reference to their brands. “They had some money to spend and wanted to invest in 30-second spots,” said Hartner. “Superfeet wanted to try something with us since we were one of the first stores to carry their Fitstation [personalized fit technology].”

Paul Karaz Shoes taps his local cable provider to help produce spots. “If you buy enough time, stations will [often] make the commercials for you — it’s included in your buy,” said Karaz, noting that it’s more affordable than hiring outside agencies, which in the past have charged him $25,000 for a 30-second spot.

Recently, Karaz has begun appearing in the store’s spots — a move he said upped the store’s profile. “The network liked my personality,” he said. “I did my shtick about the shoes and they created a 30-second spot. If you’re on TV, you’re a rock star. It validates you. Meanwhile, you can be in the newspaper every day and people just turn the pages.”

Results Oriented

How can retailers measure if ads are working? According to Levy, he simply surveys shoppers who come into the store. “We’ll ask customers on the fitting stool how they heard about us,” he said.

Sajdak opts to run his ads around store promotions to gauge their effectiveness. “We’ll be able to see how the pairage came through and if there’s an uptick around the spots,” he said.

Overall, retailers suggested choosing the best strategy for their type of business and their consumers.

Explained Knuteson, “There’s not a cookie-cutter approach to advertising — no one size fits all. [Retailers] have to do their homework, understand the customer and what their habits are, then decide what media selection they can take advantage of.”

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