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.
