Are You Paying More Than You Should?
The last 4 weeks have been home to two major television sporting events – the Super Bowl and the Olympics. Here in the U.S., we glue ourselves to our TVs during the Super Bowl to see which spots are going to make us laugh hysterically or bring a tear to our eye. And this comes with a large price tag…in this year’s Super Bowl, NBC asked advertisers to lay out $5 million for a 30-second spot. For perspective, a 30-second spot during the PyeongChang Opening Ceremonies was a fraction of that, ranging from $544,865-$665,946 (viewership was down by about 3%).
But airtime is only one part of the cost equation – brands shell out big for production as well. Fortune Magazine recently reported that the average production cost for a Super Bowl ad was over $1 million, and, these days brands are “pulling out all the stops” by leveraging A-list Hollywood directors and actors.
Regardless of whether or not you’re spending $1M to produce a single spot or $5M for 30 seconds of air time, chances are you’d still like to drive out unnecessary costs and make the most of every dollar spent. While we’ve never met anyone who says, “I love paying more for things than I should,” many teams simply don’t have the internal resources and/or bandwidth to maximize efficiency opportunities. How do you stack up?
Ask Yourself These 5 Questions:
- Do we have an internal production expert who can identify all cost drivers in a creative concept?
- Do we have someone on our team who knows how to compare creative concepts to bids and identify which line items need to be adjusted?
- Are we leveraging historical data for benchmarking?
- Do we have an internal expert who can identify which overages we’re responsible for and negotiate them appropriately?
- Are our teams comparing agency billing and vendor back-up against the estimate on a line-by-line basis?
If you answered yes to all 5, congratulations, you are doing well! Did you answer no to any (or all)? If so, don’t be too hard on yourselves…just know there are plenty of opportunities that lie ahead. To identify exactly what those opportunities are and find out the potential impact on your organization, schedule a complimentary consultation with one of our team members now!
Production: “Do More With Less” With These 3 Tips
Over the last several years, MRA has been increasingly helping marketers conquer big-picture production challenges, think differently about their production supply chain, and innovate the way they work. Why? Because the shifting media landscape has required marketers to find innovative ways to produce more and more content – with flat or decreasing budgets.
Whether or not you’ve fallen victim to this “content requirements vs. budget” predicament in the past, if you’re like most, you may soon find yourself searching for ways to maximize efficiencies in your production ecosystem. So, we invite you to check out 3 tips below:
Tip #1: Explore alternative models for production optimization. Evolving content needs and tightening budgets have led to the expansion of alternative AOR providers that marketers can tap for managing content deliverables. Often times, though, we’ve seen that brand teams are unclear which solutions providers are best suited and whether or not the AOR should retain some role in the process.
Leverage internal resources or 3rd party production experts to develop a best practice engagement model for specialty suppliers, mapping project types with partners who can deliver the greatest value/quality at the leanest delivery based on objectives, timelines and budgetary considerations.
By exploring new models, you have the ability to evolve relationships with traditional production partners and uncover potential new content partners and solutions – including creating or expanding your own in-house capabilities.
Tip #2: Implement addressable creative/production best practices. As an emerging area we’ve seen for many global clients, addressable creative for programmatic media buys enables marketers to execute countless creative executions through a streamlined set of master templates that otherwise would be cost-prohibitive to even consider producing.
As brands look to leverage the targeted marketing effectiveness that addressable provides, agencies are challenged with process learning curves that are complicated by the need for multiple agency partners to work together to execute the creative. There’s opportunity to drive significant cost efficiency in how work is executed by identifying cost drivers and implementing best practices to streamline workflows that eliminate overlapping scopes among agency partners. Contact us to learn more about these opportunities and how you might minimize the risk of duplication between agency partners.
Tip #3: Assess your technology stack. As we all know, the marketing tech landscape continues to widen, and there are a multitude of emerging technologies that can help you maximize transparency, increase efficiency, decrease costs, and mitigate risk. A few popular tech trends we’re seeing?
- Maximizing transparency with electronic bidding tools
- Mitigating risks with rights management software
- Tracking asset usage with watermarking technology
- Optimizing personalized content delivery with AI
Need help assessing where your tech gaps might be? Or looking for recommendations for specific tools or solutions providers? MRA is proud to have strategic affiliations with leading global technology companies and can help connect you with a multitude of resources. Let us know how we can help.
How Can Production Procedures Help Your Organization?
Let’s face it, creating assets for your advertising or content campaigns is no small task. In fact, it can be an extremely complex process. Without the proper procedures in place you could be spinning your wheels unnecessarily.
Wikipedia describes Standard Operating Procedures as “a set of step-by-step instructions compiled by an organization to help workers carry out complex routine operations. SOPs aim to achieve efficiency, quality output and uniformity of performance, while reducing miscommunication and failure to comply with industry regulations”.
It’s likely that your employer has invested tremendous amounts of time and resources into developing robust SOPs. Why? “When employees follow the SOP for a particular job, they produce a product that is consistent and predictable.” (www.quickbooks.com)
Many organizations, though, don’t have Standard Operating Procedures for production. Do you? While production SOPs are indeed helpful for employees, they’re also utilized by external partners who are executing creative production on your behalf. Similar to “traditional” SOPs, production procedures offer a multitude of benefits. First of all, they allow you to leverage clear, disciplined, best-practice processes to improve quality, maintain consistency, protect your organization from loss, and lower costs.
3 Additional Benefits Production Policies & Procedures Offer:
- Allows for careful upfront planning of production budgets
- Accelerates speed to market
- Maximizes transparency
While Production SOPs add tremendous value for advertisers, many organizations lack the internal resources or knowledge to develop them internally, so they reach out to MRA for help. Regardless of whether we’re engaged to optimize your production investments on an ongoing basis, we can help you develop customized procedures, train your internal stakeholders, and educate your agency partners.
It’s an easy, seamless process – and MRA does all the heavy lifting. Interested in how we do it, how long it will take, and what’s required of you? We’d be glad to share our SOPs for building your SOPs.
Contact us today to learn more.
Key Considerations for Globalizing Ad Production in 2018
Producing relevant ad content for any target audience is a tall order, and it’s even more difficult when creating ads for multiple audiences and cultures. However, in today’s world, global campaigns are becoming the “new norm” allowing you to communicate a consistent message to customers around the world, provide strong creative synergies, and maximize cost efficiencies.
It’s important to begin the creative process (at the briefing stage) with the intent of developing global content as there are several key considerations including (but not limited to):
- On camera dialogue
- Cultural differences, humor
- Product packaging on screen, product held by talent or in situations
- Demographics for different markets
- Celebrity usage
- Signage or props with written language
- Background landmarks, identifiable cities, and topography
- International copy clearance
- Music rights
- Negotiation of talent rights
- Delivery of assets
- Length of spots – “standards” vary in different countries
Maximize Results By Working With Production Experts
Navigating the waters of globalizing production isn’t easy, and brands often rely on consultants like MRA for help. Recently, we developed a Global Content Production Strategy for an organization with 11 brands that were sold in more than 40 countries. When the client engaged us, each brand was producing its own advertising on a regional level.
We began by analyzing the client’s current processes, creative outputs, staffing, technology tools, content needs, and spending across the brands and geographies to size up the opportunities, barriers, and challenges. Then, we went to work!
The results? Year 2 showed a 44% savings in production costs (versus historical benchmarks for comparable scopes) while yielding additional savings in agency fees and in copy testing. Download the full case study here.
Common Test Production Formats: Considerations & Cost Ranges
Copy pre-testing has always been a part of marketing. But these days it has become increasingly important for Brand Managers to reduce risk as much as possible and get advance information on how commercials are expected to perform.
There are a variety of factors to consider when choosing which type of test production format to use:
Definition – still artwork, stock or custom photos shown in an edited timeline using cuts and dissolves to show movement
Consideration – effective when budgets and/or timelines are tight
Costs – $8,000 – $15,000
Lead times – 1 to 2 weeks
Definition – created from hand-drawn illustrations with color and detail added and then brought into computer software and matched with audio
Consideration – choose an artist with a style of artwork that you like: revisions can be tedious, time-consuming, and potentially costly
Costs – $20,000 – $25,000
Lead times – 2 to 3 weeks
Definition – actors and sets are computer generated, motion capture actors used to show realistic human movement. Changes can be handled at virtually any point in the development process.
Consideration– while changes can be made with ease, they also can increase costs by 40%-50%
Costs – $25,000 – $30,000
Lead times – 3 to 4 weeks
The best decision for the format of your test production is made with consideration of the type of research needed, type of product, and the type of commercial. Additionally, many advertisers are tempted to use the test spot “on air”, especially with the more advanced testing formats; however, this is not best practice and represents a critical risk to your brand. It’s important to agree with your agency up-front that test commercials will be thrown out and never placed on-air.
Need advice or recommendations for test production vendors? Give us a call–our production experts consult with brands around the world, and we’ve supported thousands upon thousands of test productions over the last 30+ years. If you need anything at all, we’re here to help.
Licensing of Popular Music in Advertising
There are two distinct sets of copyrights in music: the rights to the musical composition (the written lyrics and the accompanying music), and the rights to the sound recording of the musical composition. The sound recording is usually owned by a single record company and compositions often have complex ownership groups. Any reproduction of a musical composition or a sound recording requires the consent of the owner of that particular copyright.
Common Music Licensing Terms
Synchronization License: Rights to synchronize the musical composition in timed relation with audio-visual images such as a commercial. Music publishers issue these licenses either as the copyright owner or their agent.
Master Recording: Rights to use a specific recording called a Master. Covers the owner of the Sound Recording (typically the record label, or whoever paid for the recording such as the producer or the artist).
Most Favored Nations: A promise by the licensee to treat a licensor equal to any other licensor on a particular project. This would mean that the Sync and Master licensor would receive the same fee.
Linear Use: Using a song “as is” without any manipulation (i.e. moving around verses, cutting the horn section, etc.) may need special permission for non-linear use.
Exclusivity: The rights granted to the licensee will almost always be in the form of a non-exclusive license; the advertiser will pay more for an exclusive time period or industry.
There are many factors that can contribute to the fees you pay for licensed music. Consider these 10 important questions that will contribute to what you pay:
- Do you want to use the composition AND the master recording? Or, do you want to use only the composition and do a re-record?
- Do you want to re-record the composition with a parody lyric?
- For television, how many spots are you producing and what are the timings of each spot? (include versions, edits, lifts, tags)
- What is the media buy? (network, cable, spot syndication)
- Are you doing any radio spots? If so, how many? Lifts, versions, edits?
- What other kinds of uses will there be? Do you need rights for non-broadcast/industrial use, sales meetings, trade shows, internet, in-store, POP, use of song title/lyrics in print or use of talent name/image in print, phone systems, in-cinema, in-flight, in-stadium/jumbotron, theme parks? Now is the time to include as much as you think you’ll need.
- Term – How long will the campaign run and what is the first air date?
- Territory – What cities, states, and countries will the campaign be airing?
- Exclusivity – Do you need exclusivity and if so, for what product category?
- Option – Do you need an option to renew the use for an additional consecutive term?
In order to procure the most competitive music licensing fees, MRA recommends the use of a third party vendor who specializes in negotiating popular music. Why? These companies have professional relationships with all major publisher and record label licensing departments and have the expertise to secure the best rates for advertisers.
Wondering how to get in touch with a music licensing specialist? Submit a request, and we’ll be glad to introduce you to the best resources in the industry — based on your specific needs.
4 Pros And Cons Of Shooting Off-Shore
Selecting the “best” location for your production is an important decision that should be made with care. Several factors come in to play:
- LA and NY are relatively high-priced but have a high concentration of directors, photographers and talent available
- There are a multitude of cities around the world that can offer lower costs
- Many advertisers travel U.S. based directors and talent to lower cost locations
MRA has created a quick reference guide categorizing popular international locations into high, medium high, medium low and low-cost ranges — click here to download your copy.
While there can be significant cost savings with an off-shore shoot, here are 4 important pros and cons to consider:
- Lower production costs
- Broader selection of directors geographies, etc.
- Ability to tap non-union talent and negotiate talent buyouts
- Reduced overtime (film crews tend to work longer standard days before incurring overtime)
- Increased travel expenses
- Possibility of paying for travel time (directors, producers and agency supervision may charge for travel time outside the U.S.; in some instances these can be negotiated)
- Longer lead time to organize and plan the shoot
- Smaller foreign talent pool if an American “accent” is required
- If the product is not sold in the country of the shoot, customs could delay product delivery
- When shooting outdoors, be cognizant of the background (i.e., are cars driving on the correct side of the street? Are there signs close-by in a foreign language?)
- Many countries have very specific regulations specific to producing content – ask an expert to ensure you’re aware of all local laws that may impact your shoot
- Consideration should be given to safety and fluctuating currencies
MRA has more than 37 years of experience in consulting with clients on making the best decisions when it comes to production locations, and we’d be happy to help you as well. Contact us today to learn more.
Written in collaboration with Angela Saferite.
Save Big Money By Asking the Right Questions
Cyber Monday Case Study
According to CNBC, Cyber Monday 2017 is expected to produce more than $6 Billion in sales, and RetailMeNot reports that 95% of employed consumers plan to surf for deals while at work. Having the right strategy to capture the attention of consumers on Cyber Monday is critical for advertisers; yet, you may be paying a premium to reach your target consumers this year.
I recently had the pleasure of interviewing Angela Saferite of Saferite Consulting, and in this 10-minute conversation, she highlights a recent consulting engagement where she helped her client optimize their Cyber Monday digital campaign — and generate $175,000 in savings by asking one key question.
3 Budgeting Pitfalls to Avoid
This month, we’ve spent time discussing budget planning, successful budget management, and how to find more money within your budget. Now, let’s take a moment to review some key tips to help you avoid common budgeting pitfalls.
Common Pitfall: Instead of starting with project or campaign level budgeting, pull out and think big picture. Are there certain ground rules or strategies to align all the teams on before jumping in to the detail build?
Helpful Tip: When reviewing the annual budget, do a detail review for any spending not tied to a specific plan or campaign, often this can identify spend that can be trimmed without impacting brand objectives and KPI’s.
Common Pitfall: Instead of asking your agency what the production budget should be, consider using models to build your own budgets and set guidelines. The budgets and models can be further refined as the detail planning and creative idea is finalized.
Helpful Tip: When building out models for production budgets, it may be helpful to have a ranges of standard costs for components. For example, animation costs will vary widely depending on the complexity of what is required. A :30 spot with heavy CGI will have a very different budget than one with very little. Music costs will vary depending on whether you’re using stock, original, or licensed music. No two :30 spots are exactly the same, and buying production is not like buying widgets. Setting an appropriate budget is a critical first step to managing costs.
Need a production budgeting tool for your organization or benchmarks for different components of production? Contact us — we’ve had the pleasure of helping hundreds of brands with budgeting, and we’d be glad to help you, too.
Common Pitfall: Failure to obtain written approval for scope changes, overages, or changes in direction during the project can lead to agency disputes and financial management issues down the road. Standardizing and formalizing this process relieve this pressure on projects, teams and relationships.
Helpful Tip: Use a standard form for routing and documenting change requests and approvals. Also consider using a management report to show project budget, revisions, and final spend. Having a dedicated resource (internal or external) who actively manages the budget during all stages may seem like an additional step, resource or cost, but this pays for itself quickly (usually multiple times over).
Need a fresh perspective on a budget issue/opportunity? Click here to submit questions to our team, and one of our experts will get back to you right away.
Written in collaboration with Angela Saferite.
Successful Budget Management
Budgeting can be like going to the dentist — not high on your list of favorite activities. However, if you go often and do the recommended preventative maintenance, you are much less likely to end up in a painful and costly situation!
The key to successful budget management is “early and often.” Below, we’ve identified three steps to take in building the annual budget, setting project budgets, and managing budgets on an ongoing basis:
- Select methods that fit your company culture such as zero based budgeting, standard costing models, top-down target driven, inflation factors, prior year base, stop/start/continue, etc.
- Lay the groundwork up front so everyone in marketing consistently applies the budget methodology. Set the standards for level of detail required, standard costing and modeling, and ratios requirements (working versus non-working, media versus production, fee versus creative, etc.)
- Train the team and review the budgets during the process versus after the budget is submitted. Giving a list of review tips, frequent errors, and issues to avoid can be very helpful for your marketing team.
- Consider a model approach with standard cost ranges for various components of production.
- Define the components and potential costs up front with agreement from all stakeholders.
- Explain variations to the standard costs and obtain senior management approval to operate outside the standard, as needed.
Ongoing Budget Management
- Recruit a champion to manage project budgets and implement process enhancements.
- Analyze, understand, and agree upon detailed budgets prior to the start of any project.
- Wrap-up and reconciliation are just as important as the planning phase and can help your team learn from issues and collect remaining funds for re-investment.
In summary, here are 5 additional things to keep in mind:
- Clarify expectations with the team up front before budgets are prepared and submitted.
- Have a formal review process for variances to standard costing models used in budgeting.
- Have a formal approval process for changes to project scope.
- Assign responsibility for ongoing budget management.
- Be the team that gets more money due to your track record for effectively and efficiently managing your budget!
Being involved early and often are the keys to success in budget management. Check out our upcoming post for tips and key watch-outs for implementing improved budget processes in your company.
Written in collaboration with Angela Saferite.