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Production Transparency: 4 Steps to Getting Started

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With the recent release of the ANA Production Transparency, now is the perfect time to review and refresh your practices.

Step One

Identify someone or a team who is responsible for managing production. This can be accomplished in three ways:

  1. Tap into in-house resources with deep production knowledge (these team members may reside in marketing operations, procurement or finance)
  2. Train and develop internal team members to manage the production process and expenses
  3. Hire production experts to supplement your internal team

Assigning this responsibility is a critical first step to success!

Step Two

Implement solid policies, procedures and guidelines governing production spend. These usually start with your company policies and procedures that need to be adhered to. However, this alone is not enough; more specific production guidelines require clarification and communication. Production guidelines are best when in writing, updated often, and both employees and agency personnel receive training. (The training is best delivered by the individuals responsible for the management of production costs.)

Step Three

Avoid surprises and issues with your agencies up front in the process by conducting a thorough pre-bid meeting, including leveraging an objective party to ensure 100% alignment among agency personnel and brand teams on all elements of the production, including (but not limited to):

  • Recommended bidders
  • Shoot location options
  • Types and number of assets to be included in production
  • Talent requirements, residuals, and buyout considerations
  • State incentives
  • Music
  • Special effects
  • Budget

Input and clarity around these topics early in the process facilitates transparency, effective management of budgets, and — yes, even results in savings.

Step Four

Have a smooth invoicing process which includes a detailed review of invoices before payment is made. This also is helpful in eliminating the painful process of recouping funds if there are discrepancies or disputes with the billing.

Experts that specialize in reviewing production invoices and back-up documentation, monitoring compliance, ensuring verification of all costs can provide a thorough analysis. (Up-to-date, best-practice guidelines are a key element to have in-place prior to implementing the invoice review process.)

Summary

Regardless if these 4 steps are supported by internal or external resources, there’s never been a better time to take a look in the mirror and identify areas for improvement. Find yourself wondering how you’re stacking up to other organizations, or need help identifying areas that you might be at risk? Call 513-354-3833 to schedule a free transparency assessment.

Join us next week as we provide tips and tricks for implementing change to production management practices in your operations.

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How Production Transparency Can Impact Your Budget

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Building from last week’s “Cliffs Notes” on production transparency, this week we take a look at case studies and examples of how this very topic can directly impact your budget.

Whether it’s internal or external, having a resource for production expertise can lead to real savings for advertisers.

Below are a few real-world examples of how a lack of transparency can lead to increased costs:

Templates:

Here in the United States, bids for TVC/video production shooting and post production are often on the Association of Independent Commercial Producers (AICP) and Association of Independent Creative Editors (AICE) forms. However, the scope of work for digital, photography and experiential projects are often in different formats with varying levels of detail and specifications. This makes it extremely difficult to compare across bids submitted. A best practice is for the advertiser to utilize a standardized template with all the required specs and appropriate level of detail (similar to what is in practice for TV and video). This allows for a smooth pre-bid meeting and the ability to make smart business decisions regarding costs.

Related Party Transactions with Bidding:

The ANA Production Transparency Study noted cases where related party transactions were not disclosed leading to various competitive bidding issues. In a recent project, a freelance producer who also owned a production company wanted that company to submit a bid for the project. In this instance, since an external production consultant was involved, the relationship was disclosed and bids from all production companies were received and evaluated by a 3rd party resource. Can you imagine what would’ve happened if the production consultant hadn’t required proper disclosures before bidding began?

Bid Review

During a recent bid review, a line listed “equipment” with an associated dollar figure. When asked for clarification, the specific items (grip, lighting, back drop, gels, etc.) with prices were provided and the total “equipment” amount came down several thousand dollars.

Overage Approvals

A brand director on a commercial shoot was asked by the agency to approve an overage on set due to some overtime requirements. The brand director “signed off” not really paying attention to the amount, authorizing the over time required in the amount of $60,000. When the production consultant analyzed the charges the next day and looked at the detail requirements for the two hours, the overage amount should have been $16,000. Having someone with production knowledge understanding the details and digging in really paid off in this situation!

Invoice Review

Why use your precious budget on things you shouldn’t be paying for? In today’s world of high turnover, short-staffed teams, and people who are stretched so thin, there’s a higher risk for error — which can impact your bottom line. Invoicing transparency issues aren’t necessarily intentional or malicious, but it’s critically important review all billing prior to payment to ensure you don’t fall victim to common issues, which include:

  • Number of individuals above guideline limits traveling to the shoot
  • Inappropriate class of airfare, upgrades, airline clubs, monthly fees, subscriptions, etc.
  • Miscellaneous non-billable expenses (items you can’t imagine!)
  • Non-transparent talent charges related to miscellaneous payments, member violations, fees, wardrobe, overtime, etc.
  • Charges to incorrect brands or projects (and yes, even incorrect clients)
  • Duplicate charges
  • Past due balances on invoices
  • Taxes charged on non-taxable items

NOTE: MRA has an entire team of people who review agency invoices and back-up documentation to ensure billing is 100% accurate. To learn more, click here to download an overview of our LineWatch® Invoice Monitoring process.

Purchase Order & Budget Management

When advertisers don’t have solid pre-bid and bid review processes in place, project estimates become inaccurate and one risk is having the purchase order open for a larger amount than needed. If the advertiser doesn’t have an individual or team closely managing open purchase orders and budgets (vs. actual expenses), significant amounts may be left on open purchase orders and when final billing is settled, there isn’t always enough time to utilize the available funds. Imagine if YOU were the client that found out too late an entire additional spot could have been produced for your campaign!

Join us next week as we provide steps for how to get started and make improvements to your production management practices.

Written in collaboration with Angela Saferite.

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Production Transparency: A Good Idea or Baseline Requirement?

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Board members, CMOs and CFOs are starting to ask what their companies are doing. Are you prepared to answer these questions?

We’ve pulled together the “Cliffs Notes” version of what has been happening in the industry and the ANA’s recently released study: “Production Transparency in the US Advertising Industry.”

Industry Timeline:

ANA Production Transparency Timeline

Advertising production and media, two of the biggest marketing spend areas continue to be at the forefront with issues and investigations. This presents an opportunity for advertisers to make significant changes. It’s time to roll up your sleeves and get started!

What Is Transparency?

  • Full disclosure of relevant info required for informed and intelligent decision-making
  • Lack of hidden agendas and conditions

ANA Production Transparency Task Force: Two Part Mission

  • To assess for lack of transparency in the US production industry
  • To assess production management processes and develop recommendations for improvement

Industry Dynamics

  • The spend is huge – no single source estimates available, video commercial production alone is $6 billion (source: AICP June 2016 member survey), other areas include audio, digital, print, out of home and experiential/event marketing
  • Digital has driven a fragmented ecosystem for content distribution
  • Advertisers are working with an unprecedented number of agency, media and production partners
  • Expanded client requirements for commercials and content
  • Pressure from advertisers on fees and production budgets
  • Agencies experiencing decreasing market share and revenue and adapting by increasing service offerings including in-house production, editorial, and music facilities
  • Need for more content with less money and fast turnaround driving advertisers to seek greater flexibility and efficiency in production spending including decoupling, pre-qualifying suppliers, and direct sourcing

All of these factors created the “perfect storm” for issues to rise to the surface.

Findings of the ANA Study

  • Creative agencies are increasingly directing post-production projects to affiliated companies within the same agency holding companies
  • Producers at times ask for a “check bid” from independent post production companies with inflated prices to drive the work to the in-house option
  • The producer did not work to negotiate pricing with the external bids but utilized the information to make sure the in-house estimate was lower
  • Clients aren’t always informed of the ownership status of the agency unit submitting the bids
  • Agencies markup vendor invoices a certain percentage which is not always disclosed to the advertiser
  • Agencies are managing the bidding process while also participating in bidding for the project
  • Agency management is incentivized to keep work in-house
  • Cost savings are not always realized if the in-house bid was estimated low and has significant overages
  • Agencies are at times acting as the principal with production suppliers entering contracts directly with the production supplier versus entering into the agreement as the agent of their client. Principal transactions can result in nondisclosure of the original purchase prices as well as an incentives/rebates paid by production suppliers and limit the advertiser’s right to audit.
  • Experiential and Event Production areas have fewer bidding and reporting requirements, less operational oversight, fewer compliance audits, and more reporting lapses due to the just-in-time nature
  • Production companies and agencies file for state commercial production incentives without the advertiser’s knowledge or approval; these savings can range from 15 – 30% of production spend

MRA has provided a summary categorizing the major issues and next steps, click here for a download of this chart.

ANA Member Survey Findings

  • Only 43% of advertisers require agencies to disclose if bidding a production job to an in-house or affiliated production company
  • Over 60% do not require or know if their agency contract requires production rebates and incentives be passed back to their company
  • 33% confirm knowing their agency acted as principal with production suppliers, 38% said the agency did not and 29% don’t know
  • Marketers lack familiarity with state commercial production incentives and don’t know if their company is benefiting
  • The knowledge of advertiser personnel making buying decisions varies dramatically and in many cases, is very limited

Similar to what was discovered with media transparency, the blame is not all on the agency side, advertisers need to be much more actively managing and controlling production spending.

Join us next week as we explore the study’s recommendations for advertisers and case studies illustrating how to bring these recommendations to life.

Written in collaboration with Angela Saferite.

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Production Bidding Transparency

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It’s MRA’s priority to ensure transparency and integrity in the production bidding process for our clients, and we wanted to share a quick post regarding the recent announcement of the U.S. Justice Department’s investigation.

Day-in and day-out, our Content Production Advisors advise our clients on best-practice processes and procedures to protect against fraudulent bidding practices like those mentioned in The Wall Street Journal article.

With that in mind, MRA has responded to this week’s announcement by developing additional resources to help you mitigate risk and safeguard your organization against unfair production and post-production bidding processes. We’d be happy to discuss them with you — please request additional information here or call Stacey St. John directly at 513-354-3833.

 

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Defining The Actual Role of Broadcast Advertising

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What is advertising? In its simplest form, advertising is a message from a seller to a poten­tial purchaser – which the seller hopes will produce extra sales and, ultimately, an en­hancement of revenues. And some other descriptors?

  • Advertising is an investment by the adver­tiser, wherein he puts capital into a venture he hopes will not only be self-liquidating but will also produce a handsome return on his investment.
  • Advertising is a golden opportunity to outwit, out­spend, and out-maneuver the competition.
  • Advertising is the very best method of pro­moting, building, rebuilding, or maintaining a Brand.
  • Advertising, in many companies, is the fast­est, most direct route to the Executive Suite.
  • But, above all else, advertising is SELLING.  The sooner we all get that very basic principle clearly in mind, the better off we’ll be.

Veteran salesmen will tell you it’s essential, at some early stage in the selling process, to get your prospect nodding, saying “yes” in response to your selling argu­ments. This, of course, is preparation for the essential “yes” that answers the bid for action, your “closer.”

Advertising, being an indirect form of sell­ing, needs to get “yesses,” too.

For the next few minutes, put yourself on your pro­spective customer’s couch and consider the daunting challenges your ad­vertising must take on. Within seconds, your ad must secure a “yes” answer to six vital questions. You must get six “yesses” in a row in order to win this game. Here they are – in sequence:

ADVERTISING YES #1

Yes – I’ll watch this commercial or read this ad.  If you don’t get this one answered right and right away pack it in.  You’ve lost the game at the get-go. Your commercial or ad must nail the viewer immediately. This is known as “attract­ing attention.”

Consider, for a moment, the enormous competition your ad encounters. You’re fighting the reader’s or viewer’s current mental condition, the accumulated events of the day, the iPad in one hand and the iPhone in the other, whether the dog is scratching itself, what the kids are doing, etc., etc. Your commercial opening or ad visual had better be good.

ADVERTISING YES #2

Yes – I’m interested enough to stick around for a few seconds. This stage in the sale, not surprisingly, is known as “arousing interest.” And you’d best be sure that the interest sought is the prospect’s interest, which you have cleverly ascertained from research. Beware of using an execution technique as an interest arouser – all prospects want low-calorie food that tastes good, you know.

ADVERTISING YES #3

Yes – I want what you’re promising. This is where the principal benefit comes in. Clearly, you market your product or service to provide a certain desirable end benefit for the prospect. Ergo, waste no time getting to the benefit quickly and unerringly (remember that your “temporary” reader or viewer can still bag out on you at any second).

Many sagacious advertisers make sure the principal benefit gets appropriate attention by making it the sub­ject of the ad’s main illustra­tion or using it as an early and dramatic visuali­zation in television. The best advertisers do both.

ADVERTISING YES #4

Yes – I believe what you’re saying or prom­ising. I understand how your Brand is different from your com­petitors, how you can offer some­thing they don’t or can’t…and I want what you’re offering me. If you don’t get this right, your persuasion score suffers.

Brand differentiation thrives on reason-why which is, of course, what we’re talking about here.

ADVERTISING YES #5

Yes – I want what you’re selling. Your proposition meets me squarely in the area of my interest and pro­vides the benefits I seek in Brands like yours. You’ve also convinced me why I need to buy your Brand over any other.

I like what you’re telling and showing me, and I’m ready to buy.

ADVERTISING YES #6

Yes – I WILL buy what you’re selling. I’ll matriculate from becoming a consumer of your advertising to be­coming a consumer of your product. You’ve showed me the package, you’ve rammed home the Brand name, and you’ve urged me off of my couch and made me make a note reminding myself to pick up look for your Brand while shopping next.

Cost Control: A Blend of Art & Science

Okay, now that you’ve studied the answers your advertising must elicit from viewers, we have some questions for you. Look at your most recent advertis­ing, particularly your Creative Strategy. How hard are you selling? Have you traded in a potentially effective cam­paign for “a little top of mind awareness”? How long has it been since you spent a day in the field with your agency, talking to retailers? How long has it been since you ran a truly innovative us­age and attitude study?  What are the analyses of your last copy research tests showing you?

MRA has more than 50 major advertisers as clients, and our consultants deal with questions of this kind every day.  Want to learn some more? Give us a ring!

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15 Hot Ad Agencies

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Keep An Eye On These Hot Ad Agencies

We live in one of the most interesting and challenging business environments the world has ever seen. New trends and technologies are emerging overnight, making it difficult for brands to keep pace with the rapid changes. Finding the right partner(s) to support the changing needs and preferences of customers is paramount. That’s where a list of the best ad agencies comes in handy.

In today’s marketing world, working with the right ad agency can make the difference between rapid growth and the slow decline of your business. Top ad agencies today offer a fresh approach and new ideas to companies to help them get a competitive edge.

If you’re searching for an ad agency, or you just want to keep a watchful eye on the market, you’ve come to the right spot. Day-in and day-out, MRA has the pleasure of working with hundreds of agencies around the world. And we consider it a privilege to collaborate with many of the brightest minds in marketing and advertising. Some of the agencies featured in our lists are ones we work with — and some we simply admire from afar.

We decided to publish our first Hot Agencies list in April — which featured were rock stars like Sparks & Honey, Droga5, TDA_Boulder, Huge, and gyro…just to name a few. And now, we’re continuing to showcase some of the best and brightest ad agencies to watch. Download our latest edition of MRA’s Hot Agencies list, and you’ll find 15 top shops in the following categories:

  • New Breed Agencies
  • Independent and Proud of it
  • Small(er) with a Fresh Approach
  • Digital Roots
  • Content

The ad agencies in this list are pushing boundaries, coming up with innovative approaches that blur the line between marketing, strategy, creativity, and technology. Ready to find out who these hot agencies are? Download your copy now!

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Savvy Celebrity Negotiations

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Join MRA Tuesday, August 23, 2016 at 2pm EST for a FREE webinar — Savvy Celebrity Negotiations: 7 Areas You Should Consider. This 45-minute session will be led by MRA’s own Jerry Rice, a veteran in the advertising industry who served on the Joint Policy Committee for 12 years.

This information-packed webinar will cover 7 key topics, including:

  • What differing levels of celebrity could cost you
  • The variances between “cost” and “price”
  • Hot to capture better pricing while you negotiate

You won’t want to miss this free session — click here and register now!

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Can You Spend Your Production Budgets More Wisely?

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You can with MRA.

Check out a few examples of how we’ve helped others spend their production budgets more efficiently:

Recently, a client was pre­sented with new creative work.  The agency recommended producing three :30 spots behind the new creative; total bid for the production amounted to $1,600,000 — somewhat steep, but within the limits of what gets spent for com­mercials in that category.

On analysis of the boards, MRA’s consultant broke down the costs by commercial.  She suspected that a disproportionate share of the ex­pen­diture lay in an unassum­ing-looking set called for by only one of the spots — not immediately apparent from the board, except to a trained eye.

On digging fur­ther, it turned out that this set alone cost $540,000, or 34% of the total pro­duction cost for the entire pool!

When the Product Manager was ap­prised of the facts, she decided (smart Product Manager!) to produce the other two :30s. Total produc­tion outlay, just over $894,000, instead of the originally-recommended $1,600,000.

It’s not easy to see production pitfalls and extravagances in a storyboard.  That takes years of practice, and the experience of working with thousands of commer­cials. The average Product Man­ager, who may produce as many as three commercials a year, can’t be expected to act as his own produc­tion expert. Moreover, negotiating costs is not the optimum use of a Product Manager’s time.

It is, however, the optimum use of MRA’s time. That’s why we work for over more than 30 clients on retainer, and why we’ve done project work for all but a handful of the top 200 adver­tisers over the 35+ years of our exis­tence.

Cost Control: A Blend of Art & Science

Here are a few more examples of the kinds of savings MRA experts make  — large and small.

A major client was facing produc­tion of a large pool of commer­cials, featuring multiple non-speaking actors in each commer­cial.  The agency bid the job in Los Angeles — and also in South Africa and South America. Since the tal­ent was non-speaking, dialogue wasn’t important: looks, acting, and loca­tion were.

MRA has had considerable experi­ence with overseas production and was able to provide valuable infor­ma­tion about the necessity of ex­tended lead-times in scheduling and the placement of heavy em­phasis on preproduction in order to assure a smooth job.

The commercials turned out just fine (thank you!). The client ulti­mately saved $500,000 in production costs over the Los Angeles-based bidder and, coincidentally, $458,000 in reuse fees. The agency feels good about the results and, when last seen, was sporting the commer­cials on its sample reel.

Cost Control: A Blend of Art & Science

Another client had two :30s (each with a :15 cut-down). The shooting schedule called for four con­secu­tive days in outdoor locations in California. Given the potential for rain in February on the west coast, MRA strongly recommended that weather day insurance be in­vestigated; our people were able to recommend an insurance com­pany which had previously pro­vided good coverage at a very favorable price for our clients.

Weather-day contingency costs on this project were estimated at $80,000 per day for a total rain-out. On the other hand, the weather-day insurance premium came in at $28,000 for all four days, guaranteeing that nine hours of each 12-hour shoot day would be rain-free.

As it turned out, one shooting day was drowned out and a total loss. With proper documentation, the in­surance company came through with $80,000 in coverage, the pool of commercials was produced as planned, and client and agency were pleased with the results.

Cost Control: A Blend of Art & Science

Do you always accept the low bidder on production?  We don’t; instead, we look for the “best value” bid­der.

We had a recent case where the agency recommended — and the cli­ent con­curred — with the middle bidder: $25,000 higher than the low bidder. MRA agreed that the mid­dle-bid­ding director would do a better job and then set to work, negoti­ating a savings of $11,693 in pro­duction, casting, and agency travel. What that meant was, the commercial got the best director; agency and client were happy, and nearly half the premium cost was saved by judiciously pruning the production estimate.

In addition, the agency planned to hire nine on-camera principals as actors — four more than the five agreed to in the pre-bid confer­ence. Notified of the additional actors by MRA’s consultant, the client was able to persuade the agency that six on-camera princi­pals would be plenty — with an ul­timate savings of $45,000 in reuse payments.

Net result: the commercial seemed sufficiently “populated” with ac­tors; agency and client were happy with the results, and the client had a little extra cash to put into media or other areas.

 

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Are You In Production Trouble?

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And What Exactly IS “Production Trouble?”

Let’s face it — you may or may not know if you’re in “Production Trouble,” and that’s okay! Heck, you may or may not even know what “Production Trouble’ is. We’ll tackle that in a minute…

You know, when you I was a teenager, being “in trouble” meant I was either sent to my room, grounded from going out with friends, or…heaven forbid…had my car keys taken away. (We didn’t have cell phones back then. If we had, I’m sure that would’ve been first on my parents’ list.)

But what is “Production Trouble?” Well, it’s when you’re wasting precious time and/or money on production — and you may not even know it!

Things You May Be Experiencing When You’re In Production Trouble

  • The production process feels too complex — and rushed
  • You aren’t happy with the quality of your advertising
  • You’re not sure if you’re getting the best value for your production spending
  • You’re producing content for social media and want to ensure you’re getting the best ROI possible
  • You don’t have a central repository for asset management
  • You need to find creative ways to spend less on production so you can reinvest into other things
  • You’re not sure if you’re following best practices when creative is being produced
  • You’re not benchmarking production costs
  • You don’t have clarity on how production partners are selected
  • You work with multiple agencies, and they all seem to work in “silos”
  • You don’t know what different types of deliverable should (or shouldn’t) cost

Did you know there’s an expert resource at your fingertips that can help you with each of these? (Yep, that’s us). We can help you anytime and anywhere — MRA works with clients all over the globe. We’re here anytime…

Tell-Tale Signs You Need Production Help. Right Here. Right Now.

In addition to the list above, you may be in serious trouble (without even knowing it). Check out 6 Things You Might Say When You Need MRA (and shouldn’t go another day without calling us):

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Migraine Med Makes Heads Turn at Cannes

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Excedrin® Migraine, Congrats on the Recent Wins!

It’s thrilling to see a Silver and two Bronze medals in honor of the creative associated with this campaign, and we’re honored to have played a part in making it come to life.

After more than a year of planning, the Excedrin® Migraine campaign went live in April 2016, and the entire campaign wrapped itself around various real stories of people who suffer from migraines.  Four individuals who suffer from migraines tell their story in four different videos. These stories are told in a truly unique manner whereby their partner or family member wears an augmented reality migraine simulator.

The production of this campaign kicked off many months ahead of the launch, since there was so much to plan in advance of video shoot.  MRA was involved from the very beginning when we helped capture the best people for this project — from casting to directors to editors, etc.

In addition to the four videos being shot, a long format video showing what a migraine feels like, science expert videos, preroll deliverables, and print stills were a part of this project. MRA recommended a genuine real people casting agent for the project and also recommended a production company, editorial company, and a talent payroll company to help with talent payments, which proved to be extremely successful.

Throughout the production process, which involved many layers of agency personnel (creative, digital, account, and even some freelance), MRA provided support well-beyond cost control. Many deliverables were produced for various regions around the world, and we were delighted to be part of the team, co-produce, and serve in an advisory role to ensure everyone could do their very best work — at the very best price.

MRA is so very proud to have the opportunity to serve more than 500 brands around the world, and we want to give special thanks to Excedrin® Migraine for allowing us to serve you on this amazing project!

Haven’t seen the campaign yet? Check out the videos here.

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