New Pressure to Reduce the Cost of Producing TV Commercials

How the YouTube Effect is Impacting Small Agency Clients

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Looking forward into 2007 I predict that agencies will come under new kinds of pressure to lower the
Marc Brownstein Marc Brownstein
costs of producing television commercials. I've been hearing from more and more clients about this issue in recent months and much of what they are talking about is related to the way consumer-created content has been rapidly raising its profile and successfully drawing surprisingly large audiences. Agency clients are catching on to this.

Call it the YouTube effect.

Millions of consumers watch amateur videos posted on, more than watch most network spots. And the cost of producing these videos is insignificant even as they generate remarkable levels of buzz. Is it any wonder that client are balking at spending $250,000 or more to produce a :30 spot?

Some of the YouTube video performances that have drawn millions of viewers were made with absurdly inexpensive web cams mounted on the performer's computer monitor. The overall cost of producing such works is about the same as the price of a lunch at McDonald's.

I also believe smaller agencies will feel these cost-reduction pressures more than the larger shops. Or, at least, we'll feel it sooner than the big shops. That's because our clients have more limited budgets, and are more aggressive in their quest to discover lower cost, more effective ways to produce TV spots, so they can put more of their budget into media and other projects.

Like anything else, however, I feel you get what you pay for. Poorly produced spots affect brand image. For the most part, a good idea, cheaply produced, reflects well on the clients' budget, but not so well on the agency that produced it. Even more important, consumers can see the product or service in a different light. If the spot looks cheesy, the product will be perceived as such.

I said "for the most part." That's because there are still plenty of ways to produce spots for a fraction of what they used to cost. Video equipment is more affordable, and a lot of small-to-midsize agencies have their own, and can shoot and edit spots in-house. Plus, there are a lot of ideas that don't warrant costly production, or actually benefit from the look of a smaller production budget.

If this low-cost production trend continues, one day there won't even be a catering budget on the set. That will be a dark day indeed
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