HOW MUCH DOES A TV COMMERCIAL COST?
(Note: this post is about TV ad production costs. See here for TV media costs.)
How much? This is the most frequent and the most difficult question we are asked. The short answer is, a TV ad costs between $2,000 and $2 million.
We’re not being flippant. Every TV commercial has to be different from every other so that it stands out on TV.
This means every commercial has a different script, different ingredients, and therefore, a totally different set of costs.
1. Text on screen with product shots and a voice over? And maybe some nice, catchy music? Plus classification, clearance and dispatch of broadcast material to networks? Around $2,000.
2. An iceberg floating down Sydney Harbour, complete with penguins drinking your brand of beer, while a penguin orchestra on the Opera House forecourt plays your jingle? By the time the several VFX (video effects) studios have finished, you could have spent two or three million.
3. A studio production with a built set, say a kitchen interior, props, products, presenter, make up, wardrobe, hair stylist, food stylist, etc? We’ve made those from $6,000 to $21,000. With presenters costing from $3,000 per ad to $70,000 per year.
4. A tourism destination commercial with gorgeous landscapes, romantic sunsets, model couple in candle-lit restaurant, etc? We’ve made those from $12,000 to $110,000. (The $110,000 production was for three TV ads and a video, and included helicopters and a $20,000 aerial shoot.)
WHERE DOES ALL THAT MONEY GO?
Before we get to more specific costs below, it would be helpful for you to know what’s involved in production.
Even the most basic kind of TV commercial with a pack-shot, simple text on screen, a voice-over and music involves people with specific skills:
- Copywriter – to write the script so that the commercial is unique and eye-catching, has a properly constructed selling message, complies with Australian consumer law and broadcast regulations, provides clear instructions for production, and fits exactly into 15, 30 or 60 seconds.
- Graphic Artist or animation artist – to design and create the graphics on-screen and animate them if required.
- Voice Over Artist – to voice the commercial.
- Audio Engineer – to record the voice over.
- Editor – to edit the visuals together, add text supers (price, logo, web address, etc.) mix the voice over with the music and match it to the visuals, and to produce the master file and broadcast dubs.
That’s five different skill-sets involved in the most basic form of TV commercial. Six, if you include a director to pull a team of diverse talents together to produce a coherent, single-minded commercial.
Now, production teams don’t necessarily require six people. Multi-skilled professionals can play two, even three roles. But every one of those jobs has to be done. Which takes time. And time is money.
SO, COME ON, WHERE DOES ALL THAT MONEY GO?
A. PEOPLE WITH SKILLS
Here’s a typical budget without any frills for a TV commercial which involves a day’s shoot:
- Copywriting – competitive market research, creating a unique idea, constructing a selling message that works, getting it all into a properly written script that will fit in 15, 30 or 60 seconds, and not run you afoul of the Competition and Consumer Act 2010: $1,000
- Audio Track Professional voice over artist, recording studio, audio engineer, producer, music search, music track buyout or licence fee, audio mix and audio track mastering: $300-1,000
- Crew and Equipment: A day’s shoot including HD boadcast cameras, crew, lights, audio gear, cranes, dolly tracks, sliders, lighting truck, wardrobe & make-up, etc. Cost varies depending on the size of crew, distance to location, equipment required, etc. The more experienced and expert the crew, the more they charge; $3-10,000+
- Post Production: including editor, edit suite, director, graphics, price supers and logos, mastering and uploading. The final cost is dependent on time and complexity. $900-1,500 a day. $3,000 a day for higher-end video effects facilities. Allow a day for a simple ad, four or five days for a more complex ad.
- Compliance, classification, certification, and digital delivery to the TV networks: $150ea.
That’s $3,000 for a commercial involving a shoot. Cutting corners can reduce the price a little. Hiring the best professionals in the business can double or triple the cost. Top DOPs (Directors of Photography) will cost $2-4,000 per day. And a top Commercials Director can command a day rate of $10,000+.
B. TECHNICAL REGULATIONS
In Australia, TV commercials must meet strict technical broadcast standards which can’t be achieved with home editing systems. All commercials are checked for compliance. Non-compliant commercials are rejected by the networks. Audio studios and edit suites charge hourly or daily rates to cover their investment in hardware and software to meet those broadcast standards.
- Edit Suite – Thousands of dollars of professional hardware and software to ensure the footage stays clean through the editing process, and meets broadcast standards
- Audio Studio – To record the Voice Over, an audio studio is required, with professional recording equipment and software certified to meet broadcast standards
- Audio Visual Professionals – One or more people who actually know how to use all that complex professional equipment
C. COMPLIANCE, CLEARANCE AND DELIVERY
- Compliance & Clearance – Every TV commercial has to be fact-checked and approved by the Commercials Acceptance Division of Free TV Australia (CAD). CAD also gives the commercial a classification – G, MA, C, etc. – which determines when it can be run. They charge up to $230 for this service.
- Music Track Licencing – either a buy-out fee or APRA/AMCOS licence fee: $100-300
- Digital Delivery – The TV networks require commercials to be sent to them via a digital media distribution network. The distribution networks in Australia – DubSat and Adstream – charge an ‘ingest’ fee and a fee to send each broadcast dub: up to $320 for express delivery! You’re on three networks? Three dub fees!
So clearance and delivery, which seems like a relatively simple process, actually has a number of unavoidable costs attached. $230 here, $540 there, $320 here, and soon the costs add up to over $1,000. Even for a basic TV commercial.
D. A MENU OF EXTRAS:
All of the following items can add from several hundred to several thousand dollars to the cost of a commercial:
- Studio Hire – A commercial shot on a sound-stage, a sound-proof studio with lighting grid, where actors or presenters can be filmed talking, and sets can be built
- Location Fees – Inside a designer home, or a cafe, hotel, bar or restaurant. shopping centre, etc.
- Filming Permits – A city street. A public beach. A national park. A marina. Councils charge production companies to film on their turf. Some charge thousands.
- Insurance – Councils and shopping centres insist production companies carry $20 million of public liability insurance in case, say, a member of the public trips over a light cable, breaking their leg and tipping over the light which kills the star and sets fire to an awning, which sets a display window alight, which burns down the shopping centre, killing a few hundred shoppers, etc.
- Travel & Accommodation – Multiple locations or remote locations can extend a day’s shoot into multiple days, adding travel and accommodation costs
- Personalities and Celebrities – You pay for their fame as well as their time. We shot a $24,000 commercial starring a test cricketer who was paid $70,000 for appearing in the ad and doing two live appearances for the client.
- Professional Actors – Does the script require experienced actors? Or will members of a local drama group be able to handle the acting? Or do you want to take a chance on amateur or first-time talent? Professionals will nail the lines, the moves, the look, every time. Amateurs don’t know what they’re doing. And can double the length of a shoot, doubling it’s cost. Which leads us to …
- Time – Sets, props, wardrobe, lighting, make-up, audio checks, rehearsals, amateur talent – all add time to the shoot which can then run into …
- Overtime – Running over an eight or ten-hour day can run you into crew overtime. Dawn or sunset shots can mean 4am starts and 10pm finishes for talent and crew
- Food Stylist – If your product is food, you need a food stylist to make your product look delicious on camera. Especially for those sexy, close-up, slow-motion food shots
- Special equipment & expertise – Surf or underwater shots, or aerials filmed from a quad-copter or a helicopter
- Animation – Even with the assistance of computers, animation is still a painstaking, hand-made art
- Jingles – musicians, producer/arranger, singers, studio, engineer – all have to be paid
- A popular song – the more popular, the more expensive. Hits can cost from tens to hundreds of thousands of dollars
Vehicles, stunts, closed streets, traffic control, helicopters, boats, animals and handlers, sets, props, pyrotechnics. We’ve filmed them all. Even children and animals! But everything has a cost.
You can see why TV series budgets are in the tens of millions and movie budgets run into hundreds of millions.
But the idea of this post isn’t to put you off TV advertising. Rather, it’s to expose you to the realities of TV production, to explain the best kind of budget control. and to help you avoid unpleasant surprises.
SO, HOW MUCH SHOULD YOU SPEND ON A TV COMMERCIAL?
This is a better question than “How much does a TV commercial cost?”
There’s a case history on this site about how we built an incredibly successful direct response TV campaign for a client starting with a media budget of $700.
But to achieve that, the client was prudent enough to invest $5,500 in a professionally written and produced 60 second Direct Response commercial that did a credible and comprehensive sales job. In other words, a commercial that built CREDIBILITY and TRUST.
His $700 media test campaign worked (and he’s since sold millions of dollars of the product) because he started with an effective, credible commercial.
There are a number of ways to work out how much you should spend. And they mostly come down to doing what you would do with any business expenditure or investment: research and budgeting.
In Part Two – How Much Should You Spend On A TV Commercial? we’ll discuss the four major budgeting methods you can use to determine how much you should spend on a TV commercial that’s right for your product and your circumstances.
We’ll also show you how to arrive at a sensible budget, how to work out a production budget if you’re testing TV advertising with a low budget media campaign (which is the smart thing to do), and how to save money on your TV ad, without compromising quality where it counts.