Why Marketing Agency Video Productions Cost a Fortune

Many large companies use marketing agencies for their creative work, despite having their own marketing departments, but video production through a marketing agency costs a fortune in general. Not only are agencies leasing expensive offices and carrying dozens or hundreds of employees, but most high level marketing agencies work with other high level video production companies, which means they are all union signatories. Once a production company becomes a union signatory, all labor costs skyrocket because of existing union contracts between organizations like SAG-AFTRA (for actors), the DGA (Director’s Guild of America), the WGA (Writer’s Guild of America), and union crews. Marketing agencies can provide the best talent for the biggest companies, but they’re not the right choice for all purposes or even for most companies.

To put costs into perspective, the Director’s Guild of America considers a “low budget” commercial to be $75,000 per day of production or $225,000 total cost. Most companies with which we work consider $5,000 to be an expensive video production, but for a major production company their craft services (food) alone would run more than most of our biggest budget videos. In the interest of full disclosure, I am a DGA member and as such avoid directing duties on our video projects, remaining instead a producer, though the DGA is more interested in commercial productions than industrials.

For big budget commercials, union talent is the best, most qualified pool of people to execute national campaigns on major television networks. For corporate Web videos, smaller production companies are best equipped to meet the budgetary goals of any company, even billion dollar ones.

Just as with filmmaking in general, where the saying “the right tool for the job” is often espoused among filmmakers, companies should remember to use the right video producer for the project. Three overall levels of production exist to fit any individual project: A) Major marketing agency partnered with major commercial production house for the highest-level projects, B) Corporate video production company with the staff and resources to handle most types of mid-level video production, and C) Individual owner-operators equipped to handle simple events or internal meetings (think wedding videographers, event videographers, etc.).

Each level of production has its advantages and specialties as well as constraints and disadvantages. Hiring a union-signatory production company to shoot a corporate meeting would be a complete waste of money and unnecessary overkill on every level. By contrast, hiring a single owner-operator to shoot a national TV commercial would be insanity. Major production companies working with DGA directors and advertising agencies are paid for their ideas and creativity, which can be worth every penny if the campaign is successful and increases sales for the company. Smaller companies may be unable to provide as much creativity and direction, requiring the client to bring most of the ideas.

Choosing a company with the resources for creative consulting at more affordable budget levels can be a great way to maximize smaller budgets and bring the right team to your production without sacrificing quality or financial resources.