TV networks thrive and survive on advertising, so selling TV advertising spots is a prime concern for TV executives. There are three major techniques networks use for selling TV advertising, regardless of whether the network is small or large. One of the most common forms of selling advertising is bulk selling, in which the network will sell many different spots for one commercial. In an advertising auction, the network will have an auction during which people or businesses bid for certain time slots. Another method networks use if no one is buying advertising time is to reduce the cost until someone decides to buy some time.
The most common method for selling TV advertising is selling bulk packages in which a business buys many different time slots at once. TV executives like this method, because they are getting paid for showing the commercial several times and they can fill up a lot of slots at once; businesses like this because it is cheaper per commercial than buying a single advertising slot. Depending on what the business is willing to spend, the bulk package will have different time slots. Most bulk packages give the business a mix of prime advertising times and weaker times, like in the morning or late at night; businesses on a budget can buy packages containing only weaker times, while more powerful business can secure multiple prime spots by buying them as a package.
Selling TV advertising at auction is another method TV executives use to fill up advertising time slots. As with any other auction, the network lists a time slot and businesses bid until a winner is declared. This method can yield a high profit or a low one. If businesses compete, then the network can get more money from the time slot; if they do not compete, then a time slot can be sold at a drastically reduced rate, which happens most often with non-peak times.
If no one is buying time slots, then TV networks begin to lower the price of each time slot. This method of selling TV advertising is normally done in desperation when no one is buying advertising time and the network requires revenue. The network will continue lowering the prices until a business decides to buy advertising time. Unless the TV network is failing or has few viewers, this selling method is generally temporary and prices return to normal once the selling slump ceases.
