Top 10 tips for managing advertising production costs


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The biggest marketing expenditure after media is often production. Television, print, digital, interactive, radio, cinema, outdoor, brochureware and the like can contribute to more than 70% of the fees paid to content creating agencies. But often the quality, the cost and the time it takes is directly impacted by how the production process is managed. Often the mistake marketers can make is to think this is completely in the hands of the agency, design company or supplier. But in fact, the cost impact of poor production management affects the marketer more than anyone and therefore there are a number of key steps marketers can take to reduce this impact on their budget. This is not about marketers taking over production management, but it is more supplier and project management to make sure that their agencies and suppliers can deliver the best possible outcome in quality, time and cost.

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  • Thank you Darren
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  • PS: Babita, also check out Top 10 most common ways marketers waste money, if you have not already. It expands on this area a lot.
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  • Hi Babita, I agree with both points about the cost drivers of production. But not the solution. The three weeks is immediately broken when often the marketer has little or no control over the timing as decisions often occur in other parts of the organisation. Therefore we usually suggest a two tier rate card for standard timeline productions and then a premium for fast-track productions. The faster it is needed the more it costs. In regards to changes we have found that monitoring the number of changes and charging a penalty for excess - more than 3 or 4 sets of changes changes behaviour where it is an issue. Often excessive changes is because of multiple stakeholders, but in the worse-case it is because of lack of attention to detail by both client and agency. There must be consequences for change to occur. The trick is to quantify the problem, identify the drivers and then build in incentives and disincentives to change behaviour. Thanks for your thoughts. It is a worthwhile discussion.
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  • Darren, while you have touched upon this, am stressing on this again. Most costs go up for a) production being done in unbelievable timelines b) umpteenth rounds of changes. Some suggestions I have.

    a. Make it a mandate that at least three full weeks are planned for production, post director approval and cost approval.

    b. Make all additional changes come at an additional cost. Both client and agency seniors should be aware of this and sign up additional costs everytime they want a new logo or a vo inserted post a detailed PPM.
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Top 10 tips for managing advertising production costs

  1. 1. A blueprint for reducing your advertising production costs(Or ten ways to ensure you are not paying too much) marketing management consultants
  2. 2. •  After media, the next biggest advertising expense marketers and advertisers are responsible for is advertising production: –  Television, digital, internet, social media, cinema, newspapers, magazines, outdoor, radio, direct mail and more.•  The problem for most advertisers is that this area of expenditure is often shrouded in terminology that is confusing, technical and potentially misleading.•  Let’s look at “A blueprint for reducing your advertising production costs” or 10 ways to ensure you are not paying too much. marketing management consultants
  3. 3. The top 4 reasons people pay too much for advertising production: 1. Poor planning 2. Lack of understanding 3. No time 4. Complex approvals marketing management consultants
  4. 4. 1.  I need you to design a house, or an extension or perhaps a bungalow - okay?Detail all considerations up front - leave nothing out - include your requirementsand your objectives and put it in writing so there is no confusion and a point ofreference throughout the process. marketing management consultants
  5. 5. 2. Great, can you build it by Monday?Plan the production schedule up front - ensure the agency leaves enough time forcreative development, approvals, production and final approvals - otherwise youend up paying for it. It can always be done faster, but it costs. marketing management consultants
  6. 6. 3. Wow, that’s more than I have to spend, can we get a another quote?Always insist on 3 competitive quotes to ensure competitive pricing, but be assuredthat true competitive pricing is almost impossible to achieve as the process is rarelya properly executed tender - instead, ask the agency to provide a range ofestimates from budget through to full costs so you have a range from which tochoose. marketing management consultants
  7. 7. 4. It’s more than we thought, can you explain what these cost are?Insist the agency provides you with a complete and detailed breakdown of not onlytheir costs, but their suppliers costs and ask them to explain each cost to you soyou are completely clear why you are incurring these costs. Often there aresubstantial contingencies built into estimates to cover unforseen costs and thesebecome profit if they are not required. marketing management consultants
  8. 8. 5. $10,000 for marble bench tops! Maybe Laminex would be okay?The agency will almost always offer you the top quality execution, but do youalways need the best if the campaign is only short term. You wouldn’t print a flyeron an A1 stock? Think about the task to be undertaken, the media budget and thecampaign duration in your assessment of costs. marketing management consultants
  9. 9. 6. What if we went out and sourced these items ourselves?Where possible, ensure the agency passes external supplier costs on to you at net,without mark ups or commissions. Often agencies receive volume discounts,rebates or commissions from suppliers. The alternative is to pay third partysuppliers direct, but having the agencies pass costs on at net protects you frommanaging a range of suppliers and ensures the agency has no incentive torecommend the more expensive solution. marketing management consultants
  10. 10. 7. That’s great, but can we put the toilet here instead?It is important to make approvals at the appropriate time and avoid making majorchanges later in the production process as this will cause significant costs. Havethe agency identify key approval dates early in the process. Ensure these align toyour timetable and availability of key stakeholders. Hold the agency and yourselfaccountable to these deadlines. marketing management consultants
  11. 11. 8. We’ll get planning approval once the job is finished, okay?Make sure everyone in the approval process is kept in the loop during all stages ofthe production. More money is wasted by senior people making changes late in theprocess. This does not mean they must attend every meeting, but it does meanthey should have access to reporting processes that keep them up to date with theproduction developments. marketing management consultants
  12. 12. 9. What do you mean extras, I didn’t approve any extras?Have all extras quoted and approved before the changes can be made. This keepstrack of the extras which can be the most expensive part of any production. At theend of the production, have a complete reconciliation of all costs and approve onlythose costs that have been approved. No written approval - no payment. marketing management consultants
  13. 13. 10. If in doubt, contact TrinityP3There is no excuse for wasting money on production. It takes away valuableresources from other equally important part of the campaign mix. Outstandingproduction value can make a communication campaign, but wasted productioncosts can kill it just as quick. marketing management consultants
  14. 14. The top 4 ways to reduce your advertising production: 1.  Plan ahead 2.  Ask questions 3.  Manage the process marketing management consultants
  15. 15. Questions? TrinityP3 Pty Ltd Sydney +612 8399 0922 Melbourne +613 9682 6800 Hong Kong +852 3478 3982 Singapore +65 6631 2861 marketing management consultants