Alcoholic Beverages Company – Production Assessment or Production Management?
An Alcoholic Beverage client sent a TV commercial production budget to TrinityP3 for assessment.
When the documentation, including creative, agency and production-company quote along with the director’s treatment and production schedule arrived it was immediately obvious that the budget as presented was over the clients target production budget by more than 30%.
In fact the ultimate price would have been higher as we discovered that the music cost and overseas client travel costs were not included.
The client had engaged TrinityP3 to provide our 48 hour Production Assessment service, when in actual fact, as you will see, it would have been more effective to have engaged TrinityP3 to provide a Production Management service that would have delivered a $300,000 saving.
On the day the production budget documents were presented to TrinityP3 and the agency informed of our involvement, the agency withdrew the proposed production budget for “reconsideration”.
Several days later the agency came back with some alternatives. These included producing half the number of commercials and using an alternative off shore production center.
Interestingly, the agency’s alternative off-shore production center was more expensive than the original far more distant production center, therefore the travel costs for the agency and production company were less.
A major concern was the lack of transparency in the off-shore costs as the agency failed to provide documentation to TrinityP3 in the original estimate and the subsequent reconsidered estimates. The inclusion of the off shore budget components are an important factor in TrinityP3’s consideration of the estimates validity.
With the agency delays in providing the reconsidered estimates, the agency was putting the client under pressure to choose the approach and approve the estimate citing that they “will not be able to meet the on-air date if you do not give us an answer today”.
The client went with the original creative scope, which was a series of four TV commercials shot in the most distant production center. Under this time pressure from the agency the client was not able to make either an informed or a considered decision amounting to many hundreds of thousands of dollars over the originally briefed budget.
From the time the client sent the original quote to TrinityP3, including the two days the agency took to reconsider this quote, the whole unfortunate process was less than 36 hours.
Result and feedback:
The up side of this is that the client got a budget reduced by $14,000 (2% of the original production budget) and a 20% increase in scope (an extra 15 second TV commercial).
On further analysis, most of the $14,000 savings came from the agency costs. Some costs in the original production house estimate, that TrinityP3 believed should have been reduced by half, were not altered in the reconsidered estimates.
Unfortunately the client spent well in excess of their target production budget.
Had TrinityP3 been involved at all stages of the process, from briefing to the final delivery of the finished commercials, we would have been able to:
- Provide advice on the suitability of the original production budget
- Ensured the recommended creative was achievable for the budget
- Worked with agency and client to ensure all production alternatives were considered up-front
TrinityP3 provide a range of production services. The Production Assessment service can provide an independent assessment of the proposed costs and identify opportunities for savings. However for productions in the hundreds of thousands of dollars like this one, the TrinityP3 Production Management service can deliver significant savings for advertisers without compromising creative and production integrity.
Production assessment cost less than $5,000. The Production Management service would have cost 3 times more but delivered savings 20 times greater.
Click here for more information about our Production Management Assessment.