Television advertising cost considerations with celebrity talent – Case study

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Client Category – Production Management Assessment – Asia

Challenging Problem:

The advertiser, a global food and beverage company, had briefed their agency for a television production with a defined budget. The agency had come back with a production estimate that was over budget and were unwilling to negotiate the cost due to concerns that the concept involved a well-known celebrity endorsing the product and therefore no risk should be taken in the production.

This is common, as many brands use well known celebrities as the strategy to promote their brand. These celebrities come at a high price compared to the cost of production. However, many agencies and production companies will use the high cost of the celebrity as an opportunity to inflate the cost of the production, as it will still appear relatively small as a percentage of the total cost.

Of course there are certain production costs associated with shooting celebrities, such as hair and make-up, their travel costs and specific catering needs. But in our experience, even with an experienced and talented celebrity, the actual cost of production should not increase.

Creative Solution:

The TrinityP3 production assessment process involves the advertiser and / or their agency providing TrinityP3 with all of the relevant details regarding the production costs, including client brief, approved creative script and / or storyboard or any animatic, the three production company quotes and the director’s reel and treatment from the preferred production company, plus a breakdown of the agency quote and other quotes as relevant. We also require the contact details of the relevant agency contact so we can have any questions answered directly to save time.

Process:

TrinityP3 reviewed the creative and the associated costs. It became apparent that the agency had only provided one production company quote. This was because the agency had only briefed one production company instead of the best practice of having three competitive quotes. Discussions with the agency and the advertiser confirmed the advertiser did not mandate this. However, we have recommended that in future it should become part of their best practice process.

Looking through the proposed costs it was obvious that both the agency and the production company had allowed significant contingency expenses across all areas of the production including talent, equipment, editing and more.

The excess costs were simply a hidden or in-built contingency, rarely required, and justified on the basis that the cost of the celebrity was so high in relation to the production cost. But this is a flawed approach that will often leave advertisers poorer and end up contributing to production house margins.

A detailed assessment of all of these costs was prepared and a report provided to the advertiser. The report was reviewed with the advertiser team who shared the findings with the agency and production house and negotiated the revised costs.

Timeline:

The TrinityP3 production assessment report was delivered within 48 hours of receiving all of the production details.

Result and feedback:

The advertiser used the TrinityP3 assessment report and the detailed information contained within to negotiate with their agency. They reported a savings of just under 1,000,000 ¥ (approx. $USD 160,000)

Cost:

This delivered a return on investment of 2.5 times.

Find out more about our Production Management Assessment service here

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About Chris Sewell

Christopher Sewell is a TrinityP3 Business Director specializing in helping companies understand the environmental impact of their marketing spend. He is also the CEO of The Gaia Partnership who is building an on-line application ‘CO2counter’ to measure carbon emissions in all forms of marketing communications. Read his full bio here

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