Every student of marketing at the beginning of their studies soon becomes acquainted with elements o...

1. Pricing Radio Commercials and Radio Creativity
Every student of marketing at the beginning of their studies soon becomes acquainted with elements
of the marketing mix, known since the early 1960's as the 4Ps. These are a set of marketing
strategies that aim to help the understanding of how a company can achieve its marketing
objectives.
Pricing as part of the Creative Marketing Mix
Any entrepreneur with a successful company implements set marketing objectives for their company
through these various marketing strategies. Specifically the 4Ps are generally accepted by
marketers to be:
Product
Price
Promotion
Place.
Most radio creative people, in common with creative-types in any other creative endeavour are
generally happy spending their time in the Product (writing radio scripts and making radio ads) with
the Promotion (telling people about they do) and even with the Place (Radio as a medium), but not
quite so confident about Pricing their work.
Setting a Price for Radio Commercials
There is no reason why standard product pricing generally practiced by marketers or entrepreneurs
should not be applied to the work of radio creatives to work out charges and prices for radio scripts
and radio commercials. If you're unsure about what to charge for any radio commercial work or
creativity, there are a number of pricing strategies that might help:
Cost plus pricing
Mark-up pricing
Target or rate of return pricing
Value based pricing
Psychological pricing
Inclusive or subsidised pricing
And discounting pricing
Any evaluation of pricing needs to seriously consider all the costs involved in putting the creative
work together and a pricing strategy needs also to consider:

2. Competition in the market place
The objectives of the parent company if the creative work is part of a larger organisation
The creative team's position in the market place
The reputation of the creative work
What present and futures customers will pay.
A group of creatives who implement a pricing policy that includes all fixed and variable costs as well
as intended profit will have a longer lasting, not to mention more profitable, career than one that
doesn't.
The Practicalities of Pricing a Radio Commercial
Cost plus pricing is perhaps the most fundamental and easy pricing policy to implement and can be
easily established. When setting a price for a radio commercial using this strategy for example costs
could include:
Any time spent scriptwriting
Voice over fees
Charges for Studio Hire including sound effect and music fees, and materials.
Music and any other freelance charges
Time spent and any expenses incurred on the client's behalf in meetings, or any other work
And finally a proportion of the cost plus fee should also include a factor for Profit, (Cost Plus Profit)
and a proportion of fixed and variable costs in running the company should also be added. Only by
including all these fees and costs can a true price be set for the work.
Affordable Radio Commercials
Covering all the true costs and fees involved in making a radio commercial to many in the industry
makes radio commercials expensive for some advertisers with smaller budgets. To cope with this
"true cost pricing," that could for some advertisers be perceived as a barrier to the media, some
media owners subsidise the cost of producing radio commercials.
Thus other forms of pricing radio commercial production has become commonplace, especially with
some in-house radio stations and production houses. Alternatives to cost-plus pricing include:
Free production - all the costs are born by the media owner or included in part in the media spend
Reputation Pricing - some production sources can command a higher price than others because of
their reputation .
Pricing by Place - because of the additional costs they incur producers based in bigger cities often
charge higher fees.

3. Sole-operators - conversely, production house with lower overheads can often be more competitive.
Competition Pricing - in a competitive market, producers often have to take account of competitors
pricing.
There is one important consideration over-riding all of this pricing strategy information and price
setting decisions. Creative work is not comparable to mass produced and distributed products but
has more perhaps in common with the pricing of craft products. The radio scriptwriter and producer
is creating something unique and although supply and demand plays a part in pricing radio
creativity, charging for original creative work will achieve only what the customer wants to pay, and
the producer wants to charge.
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