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.
There are usually several producers involved in the TVC production process. The production house producer, the agency producer, sometimes there is a visual effects producer, a music and audio producer.
Each producer has a very particular role and a very particular focus.
The production house producer is focused on the needs of the director and maximizing the production house’s financial outcome.
The agency producer is focused on the needs of the creative director and the creative team and on maximizing the agency’s financial outcome.
And the other producers (audio, music, effects etc) are focused on the needs of the director and on maximizing their own financial outcome.
Traditionally, the agency producer is seen to lead the production as it is assumed that they have both the client’s and the agency’s interests at heart. (In fact the whole TVC production process is riddled with assumptions, something I will deal with in future posts.)
But not all agency producers are equal. In fact some are more equal than others. Below I want to look at which type of producer has client interests at heart and which type of producer is the best fit for you.
How producers are paid
In most cases, the producer is an employee of the agency. They receive a salary and this salary is recouped by the agency by charging their time to the agency’s clients as required. In some cases the producer is retained by the client and not charged to individual projects.
In the majority of cases the agency producer is charged as a fee based on hours. There is a number of ways this can be implemented:
- Fixed project fee
- Hourly rates
- Percentage of budget
The pressure is on the television producer internally to increase billings and increase margins in production. With much of the revenue for production being passed to third parties, this puts pressure on producers to increase the fees for their services.
Of the three approaches here, the hourly rates and the percentage of budget provide the biggest opportunity for increasing revenue for the producer. The way of paying for the producer should provide no incentive for manipulation. The producer’s focus should be on delivering the outcome the client requires and not how much they are either being paid or the agency is recouping.
This applies equally for agency employees and contractors as well as consultants and freelancers.
Who employs the producers
While most agencies will have the producer on staff as an employee, increasingly agencies are using freelancers and contractors. The reason is that it allows them to:
- Engage senior and more experienced resources on a needs basis, rather than maintaining them as a potential overhead
- Pass the cost of these resources directly on to the client, often with overhead and margin
- Create the ability to match the expertise to suit the specific production requirements
The issue is that the agency producer is usually responsible and reports directly to the Creative Director or Executive Creative Director in most agencies. While the financial performance of the television production department is monitored by the agency CFO, the internal customer is the creative department and not account management.
This includes employees, contractors and especially freelancers. This is traditional and is based on the fact the agency producer is responsible for delivering the creative vision through the production process.
Alternative production management arrangements
Beyond the traditional model of agency producer, there are some new variants on the market including:
- The agency outsources to a production management company, usually owned by the agency or the agency network
- The marketer employs a production resource internally to manage their productions
- The marketer engages a production management company externally
Agency production management outsourced
A number of agencies have taken the step of outplacing their production department as a separate profit center for the business. This is usually associated with the agency being then able to extend their production offering to mount their own productions using freelance directors. In most cases this provides an advantage for the marketer with the option for lower cost productions, but has been resisted by the production companies, who see the lost of market share in a situation where the agencies are now effectively competing with them. This is the point, as the producer now has his or her focus on being a profit center in their own right.
Employing internal production management resources
Some of the larger consumer goods companies have introduced their own producers in-house. These producers effectively work with the agency and other production producers to ensure the creative concept is delivered as cost and time effectively as possible. The performance for these in-house producers is the delivery of production on or below budget. Of course the main issue here is that the advertiser has enough production volume and spend to justify the cost of the resource. In some cases the resources are shared across multiple markets and even regions to provide this economy of scale.
Engaging an external production management company
Other advertisers have engaged external third party production management companies to provide these services, including TrinityP3. The involvement of these companies can be from simply overseeing the costs to fully managing the production including attending shoots and edits. The biggest mistake here is that often the cost of the production manager is justified against savings and in some cases the company is paid based on the savings delivered. This creates tension and conflict with the agency and the production companies. Rather than savings, it is better to have the production manager aim for delivering productions to pre-agreed or benchmarked production budgets.
Which model is right for you?
In deciding the right model for you any marketer should consider:
- The efficacy of the current model in time and cost?
- The complexity of the agency and production roster?
- The transparency in the current model with the agency and third parties?
- The volume and complexity of production requirements?
- The size of the production spends across the various supplier categories?
- The impact on production processes of digital and content strategies?
Like much of marketing, the complexity of marketing and the increasing numbers of technology driven solutions means that there is no longer one solution for all. But production continues to be a significant spend for marketers. And digital media and content strategies mean that correctly configured, this production spend can easily become an investment.
This is an increasing area of focus for marketers, procurement, and us. Getting it right has huge benefits, but getting it wrong can be disastrous.