tv production is on the way up

Although there is industry talk of advertisers turning away from FTA-TV, television production is busier than ever. In the process, this is placing upward pressure on the cost. In this edition of P3 e-news, Clive Duncan of P3TV looks at how the procurement process is high-jacked when it comes to television production. This is not just a worry for the client, it is also a worry for the film production companies who waste huge amounts of time and resources tendering for work they have almost no chance of winning. P3 ? helping people achieve commercial purpose through creative process Share this with a friend or colleague by clicking on the link below or add them to the ?p3 news? mailing list, by emailing their details to news@p3.com.au

putting procurement and purchasing into tv production

When the agency present "competitive" estimates for the latest television production, are you presented with the three quotes on one page, with the three costs all within 5% of each other. Is this familiar?

Does this mean that the competitive tendering process is alive and well, or is it a construct to deliver the appearance of an open tender?
To answer this question, lets look at the underlying influences on the procurement procedure.

The agency producer represents the creatives

The agency television producer is responsible for managing the procurement of the film company. But in almost every agency the agency producer reports directly to the creative director, not the account manager or the managing director or the finance director.

The ultimate measure of the agency producer's ability is ensuring the creative department is happy by delivering the creative outcome, and this usually mean the director, they want.

The selection of directors

Why is a particular director / film company the preferred supplier? In most cases the agency creative team have reviewed many directors' reels and concluded that this director is the right one for this job.
 
In some cases it is because the creative team or creative director want to work with a particular hot director, or because the agency's art director's sister is married to one of the film company's producers.
 
In a few isolated cases it is because the film company rebates 5% (more or less) back to the agency. But without transparency, one can really be sure what the real reason is.

The fallacy of the single supplier

When questioning the agency on the reason for the preferred director / production company have you been told they are the only people that can do the job? Says who? Typically it is the creative team and the agency television producer simply pushing their preference.

This undermines the concept of competitive tendering and is an insult to the local film production industry and the depth of talent contained within that industry. In every case there are a number of viable options, it is just the agency do not want to explore any of these.

The lack of a transaperent tender process

To appease the client some agencies will often provide three quotes by including one or more "check quotes". These are usually generated by agency-friendly film companies briefed to deliver a quote at a cost designated by the agency. In return, the film company is promised they will get the inside running on the next job.

The next quote, usually the agency's second choice film company is based upon a ballpark target cost that is higher than the cost supplied to the preferred production company. No wonder many film companies despair at the inequities of the quote process.

In many cases it is only the agency's preferred supplier that gets the full story including the actual target cost and the key client requirements to pepper into the director's treatment.

As the client who is actually paying for all this, you would have to feel somewhat compromised by the whole process.

While P3TV provides estimate assessments, we can also help ensure your agency procurement process is delivering true competitive quotes.

To find out how, contact tv@p3.com.au or call Clive Duncan or Darren Woolley on 03 9378 3223 or 02 9279 4997.

benchmarking the media
		Mark Chesterfield and the P3Media team have been busy: 1. Setting benchmarks for the annual media rate negotiations 2. Reviewing media agency performance for PBR payments 3. Reviewing and assessing remuneration models and contracts to ensure clients are achieving maximum value. See our website www.p3media.com.au for how we can help you achieve maximum media value or contact Mark media@p3.com.au to talk about your particular media needs.
Huh? A new ad agency?
		If you were wondering, it's not a real agency. It's a site designed to carry on-line advertising to the marketing and advertising category. If you missed it, check it out or send the link to a friend with the link below. http://www.huhcorp.com/
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