Wednesday, April 28, 2010

The cost of self promotion

kw: observations, analysis, advertisements

The other day I noticed an airplane flying about with a banner. When it got closer I saw that it was advertising for a service company that we've used a few times. I remarked to my wife that if they could afford that, they must be charging too much. Let us just say that I've been less than enamored of their fee structure. I decided to look into it, and came away surprised.

I talked with the proprietor of an airplane-banner advertising company. The basic costs are:
  • Composing and printing a banner is just under $2 per square foot, up to 3000 square feet. A typical banner about half the maximum size is thus close to $2,800.
  • This area is fifty miles from the airport the company uses; the 100 mile round trip is $300 flat.
  • Thereafter, the rate is $580 per hour, three hours minimum.
That adds up to about $4,850 for the banner and the initial flight, but after that each flight is $2,040. Costly enough, all right, but it does reach lots of eyeballs, at a rate much cheaper than TV ads, even on local stations.

The other main form this company uses is to have a logo and picture of the proprietor painted on all their panel vans. A painted or vinyl logo can be had for $200 for both sides, but the large photo image requires a special process that is upwards of $1,000. Using a vinyl "tarp" instead of painting the van directly costs about 2/3 that. I don't know how many panel vans they have, but they could get several of them (5-8) painted or tarped for the price of that first airplane flight.

What about ongoing advertising? Radio and newspapers are the more traditional modes. A single 30-second spot on radio stations in this region is more than $350, but $700 will get you two repetitions daily for a week. Weekly rates are lower if you do it all year ($700x52 = $36,400 but a yearly package is less than $20,000) . Surprisingly, just one column inch of newspaper advertising is $160 in the local paper and $680 in nearby Philadelphia. A quarter page comes at a big discount on the per-inch rate, coming in close to $3,000 locally or $12,000 in the bigger paper. That is for a single ad.

At rates like that, perhaps the airplane method makes sense. For $12,000, a fella can get four airplane-for-3-hours flights and have money left over. So I conclude that the pictures on the vans are probably the cheapest mode of ongoing advertising, and the airplane is quite competitive for short runs. Once a banner is made, you can fly it weekly all summer for $24,500.

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