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Industry Views

Pending Business: The Endorsement Ad

By Steve Lapa
Lapcom Communications Corp

The question is simple. The answer took me years of trial and error to come up with.

“How do you set prices for an endorsement ad?”

This simple question came up during a recent interview I did for a sports website. Sellers and managers be forewarned, price must balance the scale with value and selling the value of a true endorsement ad. There’s lots to the digest in that least sentence. The price=value concept, a “true” endorsement, and selling & managing the endorsement ad.

I digress, back to the fresh-from-the-field experience of how to develop a pricing strategy. There are four universal components and a possible fifth and sixth for your consideration.

– Audience Level. Every radio station, every audio platform has an audience. A talent reaching thousands of listeners will command a higher price than the talent struggling to build an audience. The podcast host with millions of downloads will command a higher price than the newbie trying to crack the code to winning listeners.

– Demand. This is a no-brainer. Grid it up! Pricing should reflect sellout level at every turn. Learn from hotels and airlines.

– Exclusivity. Many endorsements will take your talent out of a category for the term of the agreement. Consider the variables before you price. A regional network healthcare system may warrant a different deal structure than a locally owned roofing company. The healthcare company may ask for exclusives in multiple healthcare provider specialties – orthopedics, cardio, cancer, etc. All for your evaluation vs. that easy-to-price local roofer.

– Categories. My favorite is restaurants. I always enjoyed our sellers competing positively for restaurant categories and geographic definition with large broadcast signals at play. How far will you travel for that best-in-class parmigiana, steak, or fish?

– Talent track record. Suppose your talent delivered legendary results for a business that merged or changed ownership that ended your deal. You know the category is a slam dunk for the talent as you begin searching for a new sponsor in the category. Does the talent track record factor into pricing?

– Specialty program host. Often weekend AM radio includes specialty programs hosted by experts of varying degrees who can easily deliver a loyal audience. That legal, real estate, health, or financial expert could be packaged with other dayparts to deliver a robust schedule. How about that podcast that talks travel or baby products? Remember price must equal value.

Every audio program has an audience. It’s up to you to develop the pricing and packaging strategy that wins the business!


Steve Lapa is the president of Lapcom Communications Corp. based in Palm Beach Gardens, FL. Lapcom is a media sales, marketing, and development consultancy. Contact Steve Lapa via email at: