Let’s imagine that you are currently accepting proposals from various video production companies on two different video projects. Each video is to last ninety seconds. Let’s suppose that Video #1 is a promotional video for a yearly two-day conference and seminar that your company sponsors. And let’s suppose that Video #2 is a promotional video for a specific product or service that your company offers. Sounds pretty straight-forward. Each video will last only ninety seconds. Each video will highlight your company. Each video will be used on your website.
So why is it that the budget estimate for Video #2 is five times greater than the budget estimate for Video #1? Since each video lasts the same amount of time, they should cost the same amount of money, right? Actually, the final running time of a video has very little impact on the budget.* To find out why Video #2 will cost more to produce than Video #1, you have to look at what’s involved in each project. Let’s suppose that in the case of Video #1 (the promotional video for the two-day annual conference) you already have all of the footage from last year’s conference. You simply want to re-purpose that footage into a video that promotes next year’s conference. So, all you need from the video production company is post-production services. You will even provide a script from which to structure the video.
In the case of Video #2, let’s assume that everything will have to be created from scratch. You need the video producer and/or director to come in, meet with you and your team, see the product or service, develop a concept, write a script, and provide all production and post-production services, which includes a two-day shoot on location with a full camera crew.
In these brief descriptions of each project, it’s apparent that Video #2 is a much more involved project than Video #1. Therefore, the budgets for each will be different, although the final running time for each video is the same. Think of it this way: most television commercials last thirty seconds. But, would you say that the commercial for your local furniture store cost the same amount of money as the commercial for Coca-Cola that aired during the Super Bowl? Each spot may last thirty seconds, but each one will have vastly different budgets.
Once you have worked with a video production company to create a marketing presentation for your business, you might be inclined to hire the same company again when a new need arises. As you and your team estimate the cost, feel free to use the budget from the previous video production as a starting point, but don’t assume that both budgets will be exactly the same.
Different video projects can vary greatly, depending on the size, scope, and style. The budget for building a 4,000 sq. ft. home will be vastly different from building a small cabin in the mountains. Even though they are both considered “houses,” the costs in creating each structure will be different. Even if you are using the same video production company a second or third time, the budget for each video can change. For example, an overview video of the company and its history is different from a client testimonial video. And a testimonial video is different from an internal training piece. These are important distinctions to make, because I don’t want you to be in a situation where you have already budgeted “X” on a new video, and the actual budget turns out to be more than you anticipated. Both client and video producer need to be open and honest about what’s expected and what can be delivered, regardless of how long each they have been working together.
The above scene is from Jaws and it takes place right at the moment that Chief Brody gets his first look at the great white shark. It’s then that he realizes that he and his team underestimated just what they are up against. The same problem can occur in any video production. It’s easy to underestimate the scope of your project. What seemed like a simple, straightforward shoot and edit can quickly balloon into something entirely unexpected. The last thing that you, as a video producer, want to do is to go back to your client and say, “We’re going to need a bigger budget.” That’s not a fun conversation. Here’s what needs to happen to ensure that neither you nor your client underestimate the scope of the video project.
Everyone (both client and video producer) need to be upfront and honest at the beginning. You as a video producer should never over promise. Be clear on what your capabilities are. And you, the client, should never try to downplay what’s involved in producing the video. If you are working from a script and are not as prepared as you need to be, then you need to tell the video producer, “I’m going to need several takes to get this right.”
All decision-makers need to be involved from the very beginning. If the “higher-ups” wait to watch the video after everything has been shot, you may be forced to re-shoot portions of the video if they don’t like what they see. Re-shoots are costly. You as the client can avoid them by making sure that anyone who has to put his/her stamp of approval on the video is present for all important decisions.
When it comes to budgeting for post-production, the “less is more” mentality doesn’t work. More is more. In other words, you will always need more money for post-production than you think you do. Many clients (and video producers) underestimate just how much time will be spent editing the video. You may accurately gauge the hours you will spend assembling the edit, but you may neglect to consider time needed for encoding, making approval copies, delivering approval copies, approval meetings, phone calls with the client, making changes to the edit, re-working sections of the script, additional color correction, audio mixing, more encoding, more approval copies, etc. The list can go on and on, so you need to be prepared. Always budget more for post-production.
Video producers and clients need to work together so both parties clearly understand what’s involved in the production of any video. These tips are intended to help you avoid potentially awkward meetings wherein you have to ask for more money, because you simply underestimated what you were up against.
Knowing how much to spend on advertising is a struggle all businesses deal with – especially during a recession. When economic times are lean, the gut reaction is to jettison all the weight you deem “unnecessary,” batten down the hatches, huddle together with your staff, and pray for daylight. In the long run, however, how will that strategy help your business? Sure, you may weather the storm, but when you come out safe on the other side, you may find that your competitors have taken a huge lead in the marketplace. How come? Because while you were hiding in your office, they were still out there in front of the public, maintaining their visibility.
A.G. Lafley, former CEO of Procter & Gamble, said, “I think it’s more essential to innovate through a recession, and certainly what we are trying to do at P&G is to continue to bring sustaining and even disruptive new brands and products for our consumers, to make their lives better, to offer them a little more value.”
Professor Andrew J. Razeghi of Kellogg School of Management at Northwestern University said, “Moments of economic turbulence provide the unique opportunity to start new businesses, launch disruptive new products, and strengthen customer loyalty – often at a discount.” Razeghi has a great presentation entitled, “Innovating Through Recession.” You can read it in its entirety here.
Or consider this statistic from a McGraw Hill study that surveyed over 600 businesses: In the 1981-1982 recession, businesses that cut advertising spending, increased their sales 19%. Businesses that continued to spend on advertising increased their sales 275%.
The key difference between those who continued to spend money on advertising and those who didn’t is visibility. Businesses who continued to advertise were in a better position once the recession ended. They were in the forefront of the customer’s mind when he/she was ready to buy. Make the word “visibility” your motto this year. Get out in front of your customers. Advertise. Market your business. Strive to be the first company people think of when they are ready to buy.
Based on the lessons I’ve learned by running a business, I have written several articles on this blog pertaining to entrepreneurship. Earlier this year I wrote an article providing tips on what you need to have in your contract before starting any job. As I looked back over that list, I realized that I missed something very important. What happens if your client decides to pull the plug before the project is finished?
“No problem,” you say, “my client paid me a deposit up front.” That may be true, but a deposit usually only covers certain up-front creative costs. Let’s say the time you have invested into a particular project now exceeds the amount of the deposit. Let’s assume that you are well into phase two, when all of a sudden, the project is put on hold. Your client becomes unresponsive. When he/she does finally return your calls, he/she says that the company has been forced to table the project. So, how do you recoup the cost of your time up to that point?
Since this has happened to me before, I now insert a clause into each of my contracts which says something like, “Should Client terminate the project before its completion, Client is responsible for paying Company all unpaid costs incurred in the production of this video up to the date of termination.” By inserting this sentence, I can cover myself in case my client decides to shelve the video project before it’s complete. The wording of your contract ultimately might be a bit different from mine, but the point is to make sure that you get paid for your time.