This post is by Clive Duncan a Senior Consultant at TrinityP3. As a Director and DOP he has an appreciation for the value of great creative and outstanding production values, while also recognising the importance of delivering value for money solutions to the advertiser.
So you are filling out your comms campaign brief to the agency (and TV is your medium of choice). So when you get to the bit in the brief that says how much your production budget is, what do you put in the blank field? This is a point of contention for many marketers, with some feeling it is better to provide the budget and others not.
Why set an advertising production budget?
When you think of professional services, and especially commercial creative services, negotiating or agreeing the budget upfront is important. After all, there is no point briefing an architect to design a building without indicating the budget for the construction.
Likewise in advertising, it is very important to set a budget as it will indicate to the agency your financial expectations and the agency can apply their creative talents within these parameters. This is a good thing, clever creative is just that, clever, it does not have to be expensive.
Setting a budget will ensure is that you will be more likely to end up with a great piece of creative work and enough media budget to make sure enough people will see it to hopefully ensure it delivers its full efficacy.
What happens if you do not set a production budget?
Some marketers are worried that providing the budget will simply have the agency spend it. The fact is that without the budget they will most likely end up spending more money than they need. That is why in setting the budget it should be based on what the production is worth to the organisation based on the task at hand.
If you do not set a budget you are wasting everyone’s time as they are working without understanding the framework they are working within and this will lead to having to be reigned in (creatively or financially or both) somewhere along the line. A big production idea without a big budget is an embarrassment to all. Where a big creative idea is delivered bang on the money, it is a winner for all.
How to set a budget
The easiest thing is to just add a few percentage points to last year’s budget, so your spend is based upon historical trends. The problem with this is you could be simply compounding past inefficiencies and inequities.
So how do you draw a line in the sand? How do you set production budgets?
It’s easy (and the concept has been around for years)! All you do is set a percentage of your media spend as a production budget. The media spend is usually the biggest single expenditure in the advertising budget. The media budget is based upon the task, the strategic importance of the project, the demographic targeted, the reach and frequency required and the value to the organisation and the marketing strategy.
To calculate your production spend the next bit is simple, you decide what category your campaign fits into and apply the appropriate percentage to the initial media budget and this becomes your production budget. e.g. A retail TVC (this is a TVC with a price point included no matter what the product) should have a production spend of 10%, so if you are spending $2 million on media you should be spending $200,000 on production.