The Commercial Producer's Council responds to AANA concerns over 'growing production costs'

Screen shot 2012-06-08 at 3.48.19 PM.jpgIn response to the AANA (Australian Association of National Advertisers) call to control "growing commercial (including TV) production costs", Ian Fowler, the head of The Commercial Producer's Council and executive producer of @radical.media, Sydney, welcomes AANA CEO Scott McClellan's comments.

Says Fowler (left): "The Commercial Producer's Council welcomes Scott McClellan's comments and look forward to the opportunity to discuss the issues facing our business with the AANA. Whilst it seems a lot of Scott's comments are directed at agencies, we are always looking at ways to deliver better value to advertisers.

"Competition has never been more intense in the production side of the business and the high Australian dollar has brought many international players into the market to try their hand at the high end creative work that Australia produces.
"This high level of competition has forced prices down steadily in real terms over the last ten years. Various cost controllers have pored over and pulled apart budgets but at the end of the day, when a compelling director's treatment combined with a clever production plan provides an agency and advertiser with an irresistible solution to their brand building plans, the cost of production is nearly always seen as great value for money.

"In terms of the changing transmedia landscape, Scott is right on the money. The challenges are great. So too are the opportunities. As many brand building projects move online much of the media money saved will move into production allowing the often longer stories to be told at the level of quality consumers demand."

10 Comments

Producer said:

"It can't be done".

Heard the same line since the 90's, no matter what, there's always a 'can't' involved in the process.

Producer 2 said:

There should be no "can't".
An experienced producer will always find a way either through knowledge, skill and experience to make it happen and happen well. They thrive on the challenge and they will know how to fix it if all goes pear shape, still coming in on budget. Nothing beats experience. Negotiation and diplomacy is part of their dna.

Clients need to ask who is managing their money.
Client should be questioning does new media necessarily mean better recall and exposure or is it just an expensive trend that really is not viewed by many and in fact the traditional tvc or cinema spot the best value?

Clients should also trust their gut and not rely so heavily on research. I can't remember how many times scripts have gone to research, huge amounts of money spent and then the research either ignored or produced and then post tested and the job is back in post again or it is a restart Let's research any and everything out of an ad that will make it memorable and engaging. But then, if something doesn't work they need to be able to have "we researched it" for arse covering.

Production costs are to the bone and have been for years. The variables are director/producer fees and what format and equipment being used and the director's treatment. Why shoot on shit and then have to spend large amounts to still end up with average pictures.
Actor costs. Better to get the best performance you can afford and have a natural memorable performance than something that just makes one feel uneasy. As for talent fees in new media platforms everything should be pre negotiated prior to shooting by the agency producer for all options whether they are going to be used or not. Then the client knows how much talent upgrades will costs for each usage. Clarification needs to be made in regard to buys that are FTA/pay TV and internet. Is the internet usage just for the tvc to be used or can the client use elements of the performance in a different element on line?? Maybe everyone needs to sit down with the MEAA but then again a good producer can do this directly with the casting director or agent and save money.

But I ask why are these questions being asked. Don't clients when briefing their agency allocate the budget for production and then creative write to that budget?
Or if an overall budget the producers called in to work out what budget the creative have to write too? The production departments should be included before any concept is presented to ensure obtainable within the allocated budget.

Or is it just a case of too many people with little skill under cutting on production and clients expecting that for high end work? If so, it won't happen as they do not have the experience.
Clients need to trust their agency and the agency needs to have very experienced producers who will secure the best possible production for the best possible price with a quality execution.

But most of all clients need to be realistic.

It's Simple said:

Experienced agency producers being involved with the creative department from the beginning of a brief and pricing creative work before it's sold to the client by the suit is the key to any discussion about costs of production, whether that production is for 'new media' or traditional broadcast and print work.

The ability to accurately match creative to budget, both from a production perspective within an agency, as well as from a creative perspective when creative departments are first conceptualising an idea is at the heart of a smoother, more efficient, and more cost effective process, not continually looking to create downward pressure on an already challenged production side of the industry, not agencies slagging off the production industry in general to clients, blaming grips and gaffers and actors and director's salaries and production companies for the 'high costs' of production and setting up their own in-house operations to create false and unreasonably competitive options, further driving the entire industry toward the retail end of the market and watering down the level of creative work in general.

If you only have $100K, then write a $100K idea, not Gone With The Wind, that you'll look for favours with the promise of more work in the future to produce, take the low ball offer from the less talented vfx shop, or even the right shop who will be forced to undercook the finishing to make the budget, shoot it on the 5D, beat up the production company to reduce their already slim mark-up just to get the work through the door, shoot it with fewer days than are really required, guaranteeing that the story, the look and feel of the entire project will be half-baked, shoot it with the new 'up-and-coming director' who desperately wants something on his/her reels and is willing to take short cuts to get it, as opposed to the seasoned veteran who will for the benefit of good work, yours and theirs, refuse to succumb to the aforementioned tactics, and on and on.

It your client only has $100K for a production, then admit that a well executed $100K idea is far more interesting than a compromised $500K idea, somehow (see all the above) done for $100K, by hook or by crook.

It's Simple.

Anne Miles said:

There is much truth in what has been said above. From my experience this is much like being audited by Trinity P3 - many get outraged and fuss and moan about the industry being compromised by this, but a good producer that is finding viable solutions for clients for any budget level will have no trouble at all, and will flourish in times like this. Auditing by TrinityP3 simply affirms good producer's recommendations in my experience.

There certainly are solutions for any budget, and being flexible in your approach rather than sticking to the way you've always done it before is going to be the way forward. This is a growth opportunity for the flexible right now. That's not the same as undermining the industry of course.

I think there is an element of education in this process that will be very positive for the industry. I do think that there needs to be some transparency about the whole industry and perhaps the most learning may be for agencies that are stuck in old methodologies as much as for the clients.

Those that think that it is all about screwing the suppliers are not necessarily the clients as you may assume - but agencies that are stuck in the old methodology and running an outmoded model of business.

Remember those that fussed about sound quality on vinyl being undermined in MP3, or about pirating? Borders were resistant to electronic books. Evolve and make a new way of working that everyone benefits from to flourish instead I say.

LIkewise the film and post companies need to be smarter about giving their value away for free. Surely the agencies have learned that this doesn't work and yet they are equally demanding it in turn.

There is a shift, yes, but much like the days when I started the first in-house production in an agency in the 90's and bringing editing in-house a little later, it is an evolution that came from suppliers that didn't evolve and remain relevant. I'm very excited to be creating the next relevant evolution and staying ahead of the game personally. It's an exciting time if you see it that way.

Re Anne Miles said:

Sorry Anne, I have to disagree with you in part on this one. An audit by Trinity P3 is a waste of the Clients money and a loss of valuable production time. Just more justification paperwork for the Clients file.
The first time I was audited by Trinity P3 on a government job the questions that came back showed they either had not read the script or if they had, they did not understand the requirements to execute the script. When answered and explained in response, the Client agreed the inclusions in fact were needed to achieve the shooting requirements within the allocated hours.
Generally P3 make the agency drop the overall charge for a little over what P3s fee will be, so wasted valuable production money and wasted time incurred by the process.
I am not sure where you are going in regard to vinyl vs MP3. One doesn't broadcast from a MP3, they use a wav and MP3's replaced audio cassettes. Or is it an analogy like landline and now mobile phones? New technology as opposed to quality comparison as in a D5 picture quality is not comparable to the arri alexa?
But then neither, if not lit properly are comparable to film and the room to move it gives?

And finally, if all agency producers had brought their production and editing in house in the 90's, there would be no production industry now. It would have died in this country. All our professionals leaving to continue their careers. Then those clients that wanted real jobs would have been paying much more for the commericasl or content.
Yes, I agree, some jobs can be handled in house if the producer is experienced but it would only be justifiable if the budget was under $50K, didn't need a director or have an idea or the jobs that have no budget.
We need to respect the production industry as they are craftsman, just like a craftsman that makes fine furniture. Yeah you can get a $100 chair but the material and finish would be crap.
The pencils are sharp and have been for decades and the industry is and has changed with new mediums and processes.

Viewers are educated. Too many high profile series are high end productions. Chuck your shitty ad in between the breaks and they get up and leave the room.
Clients put a lot on money into their product so why would they want their brand represented badly. I am not for wasting money. I expect to see more $'s on the screen than what I have spent but that is through being respectful to my suppliers and knowing my craft.


Ponce de la once said:

Most creatives with a bees dick of experience know what's achievable and what isn't within budget. By that, I should say most Art Directors know what's achievable and what isn't, writers seem to exist on a more ethereal plain.

But shit's changing, and we all need to adapt. As much as a cheap budget is a good excuse to hold the client to ransom (and buy a good idea), when we start squabbling over an extra $50k or $100k in production value vs that spot running an extra 3 times on masterchef, that's where we run into problems.

Media companies are taking all the mulah, and it's not the creatives fault.

If only clients realised that 3 spots less run on TV will give it that extra push needed in production values, we'd all be in a happier place.

half your luck said:

A few years ago, I attended a talk given by the Global ECD of Diesel - when Diesel's work was 'hot'. He told the story of how, having reviewed all the presentations for that years global campaigns, he then gathered his creative teams together and told them which concepts had been approved and to "go make them" - but with one proviso; with "half the budget" they'd been working to! The work went on to clean-up at every award show worth winning. Sometimes, I think agency CD's and clients here would be well to adopt the 'Diesel' model.

here here said:

@ "it simple"

I truly believe you have hit the gmail on the head my friend. Well done.

The factor driving the production cost issue is the increased fragmentation of media leading to higher production cost to media spend ratios.

http://www.trinityp3.com/2012/03/the-impact-of-media-fragmentation-on-television-production-budgets/

This does not mean that production costs have increased. As pointed out by some of the commentators here, production costs have fallen or at a minimum remained the same. But often the level of media spend against the production cost has fallen dramatically as advertisers spread their media budget over an increased number of (often lower cost) media channels leading to a increased media to production ratio. Advertisers see the ratio of production cost to media go from 20/80 to 40/60 and even higher and they immediately believe they need to lower the cost of production, not change the ratio expectation due to changing circumstances.

This situation is 'not helped' by an industry process where occasionally advertisers are confronted with production budget "blow outs" due to concepts not-written to budget, poor weather and even the expensive cost of making changes in post production.

This issue is a global problem and scale is the only variable as in larger markets there is often more budget but somehow never enough for production.

Perhaps the production industry and their agency partners need to develop an informational / education campaign to promote the value of production. But perhaps you need to look beyond the agencies who supply you your work for this as they seem to be having the same issues proving their value to their marketing clients.

ACTIONGIRL said:

Well said Producer 2 and It's Simple.

As a freelance producer on the production house side I have producing budgets from $50k to $200k I have seen the effects of this cost cutting - ie as It's simple says, trying to produce Gone with the Wind on $50k.

It seems to me that the Digital guys have ended up with a sweet piece of the pie - but aren't putting on experienced agency producers to deal with production. If I hear one more time"but it's an on-line" as an excuse for the budget being half of what's needed for the script they want made, I might have to flick my hair.... hard!

There's a bundle of young guns out there promising agencies "digital deals" but guess what they don't have the experience and then when executions don't live up to anyone's expectations there's sad faces and moans - but you don't go to KMart to buy your clothes if you like brand names or designer labels.

Oddly I think we'll see a swing - back to appreciating the production value put on screen from an experienced producer / director and their crew ... and the more traditional forms of training - like "doing your time on set" rather than winning jobs on a good sales pitch and four months at film school.

And perhaps in production land - we do need to get together to PR our value to the younger agency producers ... to show them what specialisation, good training and the wisdom of experience can bring to their next TVC or online campaign.

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