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Pricing Question for TV spot

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blinkofaneye
Pricing Question for TV spot
on Aug 29, 2005 at 3:38:06 pm

I am a partner in a production company here in phoenix and we have been around for 8 months. I recently was contacted by a friend who works for a local business, they are clearly profitable, expanding, doing well, etc... anyways, they wanted pricing for a 30 second ad for Colorado TV. Since my three other partners who handle the business were out of town I had to go meet with these people (I


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reggie prescott
Re: Pricing Question for TV spot
on Aug 29, 2005 at 4:48:10 pm

ad's range from 0$ to $5,000,000. it's a matter of finding the right client. we work with ad agencies who intern work with the clients shelling out the dough. i would say our average bid per spot is $25k to $60k. it really depends on the budget and what they want to do. a national high end campaign of 3 spots bids out to $300k-$400k or more with lots of fx work. this includes finish costs which we farm out to high end post speciallists. sounds like what you are refering to is local retail work. which there is plenty of. don't undersell yourself. but with all the new technology at low cost it is difficult to compete i'm sure. so you gots to do what you need.


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Johnny
Re: Pricing Question for TV spot
on Aug 29, 2005 at 5:39:14 pm

Just my opinion, but the reason you are doing all there ads in the future is you did really great work below what they should be paying, just guessing.

Really it's a matter of time, if you spent a day doing the ad, then you undersold yourself. Besides the labour, your overhead needs to be included, electric, cost of equipment. City the same of Phoenix, I would guess the going rate should be around 500 an hour.

Good luck and welcome to the biz.
Johnny


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Blinkofaneye
Re: Pricing Question for TV spot
on Aug 29, 2005 at 5:49:29 pm

I think i really have undercut myself, i am very confidant in the work we do and i think it looks great (usually your own work can look stale etc. after looking at it for a long time). It's just very hard as college students starting a production company to garner the respect and wages i think we deserve. (I


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Johnny
Re: Pricing Question for TV spot
on Aug 29, 2005 at 6:07:56 pm

Look at it as a lesson and hopefully they won't tell other potential clients how little they charged, just where they got such a great looking spot. Worst case, you have gotten a long term client, great high profile stuff for the companies reel and some good word of mouth.

Good luck, welcome to the wonderful world of video production, as you take the inevitbable lumps, just remember why and try to learn from em.

Johnny


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Mark Suszko
Re: Pricing Question for TV spot
on Aug 29, 2005 at 6:43:51 pm

When you look at what the spot billed at compared to what the cost of the time buy to SHOW it was... you'll probably be raising your prices. Many agencies, and especially cable outfits, give the spots away for free or a cut rate, because they make the bulk of their money selling the air time. If you wanna bill way more, you need to start getting into placement of the ads as well as making them. Agencies get a discount rate for palcing the ads, which they convert to profit.

One can certainly overpay for producing a commercial, as well as underpay. We see lots of multi-million-dollar super bowl ads that just don't seem to be worth it. One of the questions you have to ask is: what dollar amount of new business is this campaign supposed to bring in, and, once you know that figure, what percentage of that amount is it worth to get a good chance to actually succeed in the goal? If your campaign could bring in 2 million in new sales over the coming year, it may not be so crazy to spend two percent of that amount in chasing the millions, get it?

But of course, that large amount may be overkill, if you have something that's very cleverly written and gets most of it's success from the concept or editing execution rather than expensive location work, high-priced actor/spokespersons, super-duper effects, etc.

These are just some of the reasons it's so hard to pin down a number when billing or pitching.



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galt
Re: Pricing Question for TV spot
by
on Aug 30, 2005 at 5:57:06 am

[Blinkofaneye] "People, mainly non-industry professionals still seem to look past all that and key on age, which in the industry is generally and advantage. I also don


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Charlie King
Re: Pricing Question for TV spot
on Aug 30, 2005 at 3:29:21 pm

[galt] "When I was 19, my computer science prof told us all to go out and buy an expensive diamond ring. Then when a client balked, we should point at the client (with the ring in his face) and say "That is what I am worth!"."

Exactly why I have said so many times when someone can't make it into the real world they go back to a University and teach.

I have always had the highest prices in town. I have always worn jeans or shorts, simple t-shirts, tennis shoes, something comfortable. You can't be totally creative if you are uncomfortable in a suit. I have never ever flaunted my prices as the highest to a client. I have never told a client this is what I am worth. I let them judge for themself from my work. I have always been very modest. Those who portray themselves as being better than thou usually end up running their clients off.

Sell yourself as you are, others will read who you really are soon enough anyhow. No one likes a flake, showoff, or ego bigger than ability.

Charlie


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galt
Re: Pricing Question for TV spot
by
on Aug 30, 2005 at 3:51:54 pm

Charlie, I would never suggest worrying about image to anyone unless they were having trouble with their "image". The fact is that if you can't act successful, looking successful is the next best thing. The original poster said he was concerned about being perceived as not worth his desired rate because of his age. So if he takes the time to look successful in his own style (and I never bought a diamond ring, it wasn't me), he will start to feel successful, then he will start to act successful, and people will then perceive him as successful. When 19, clothing is more important than at 25 or 35 or 55. Replace the word successful with any word you want (worth his rate, talented but eccentric, studmuffin, babe magnet, whatever), it still works. For you success means showing up in jeans or shorts, so it works for you. I bet you have lost clients because of it, but it didn't matter. I know I have, and it didn't matter to me either. Blinkeeeeye will get there too.


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Blinkofaneye
Re: Pricing Question for TV spot
on Aug 30, 2005 at 11:19:32 pm

Okay, i get what most of you are saying, and for the most part that makes sense. As for a real meat of it, I


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Mark Suszko
Re: Pricing Question for TV spot
on Aug 30, 2005 at 11:55:07 pm

"client supplied college game footage"...
(spider senses tingling)

Does any of that footage require clearance? NCAA?
Not a sports nut, so I don't know off the top of my head. Could be something legally dangerous though.

At 100 an hour for the edit, you're at $800, plus the dubbing, plus an hourly rate for "thinking/planning time". You should be charging a little something for using the jump backs so you can keep buying more. Likewise for the music. Plus tape stock, any applicable taxes, a gear depreciation/software update fee, then a mark-up for profit. Is the station handling the time buy?


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Charlie King
Re: Pricing Question for TV spot
on Aug 31, 2005 at 3:09:39 pm

Not knowing the market, makes it hard for me but I feel $100 an hour might be underpriced Figure how much you need for overhead, equipment, rent, utilities, etc for the business. My last job was at $350 an hour plus markups for tape, all out of pocket expenses, etc, for a linear suite. Oh, that was 9 years ago. I understand things are different for on-linear. Equipment costs much less. Don't forget adding a fee for the announcer. Oh, music, we charged $75 needle drop for 30 or less, and $150 for over 30.

I'm sure I am forgeting something, but what the hey. Ya gotta start somewhere.

Oh, in answer to what does a 30 second spot cost? I always answered with what size is a grey suit?

Charlie


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Johnny
Re: Pricing Question for TV spot
on Aug 31, 2005 at 5:58:01 pm

Hard for me to answer your question, exactly, as the rates will vary from area to area.

Here in the midwest, city of 650K, 350 and hour per Avid edit. 150 for graphics. So if you were just compositing for 7 hours and 1 hour of edit. 1050, plus music and VO. That wouldn't be the least I have put a spot on the air, but it would be close.

Since you guys are new still, building good relationships and being known as the guys who can get it done, are probably more valuable at this time.



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Johnny
Re: Pricing Question for TV spot
on Aug 31, 2005 at 7:03:52 pm

Just thought of something that might help you and your new venture out. First join the Chamber of Commerce. Company I'm with has been around 17 years, recently joined the Chamber and the contacts and new work/clients it's generated have us thinking of adding 2 more people to the team.

Also, coincendentally we moved to a new building after joining. After we were settled, we threw a party/walk-through for clients, old and new. In the invitation we put bring a business associate that you think might like to meet us. Responce was incredible, reconnected with some of our clients, made new ones and our regulars were happy to get free booze. We had our new demo running in every room. Let people play with some of the equipment, gave tours of the facility.

Good luck to you and your associates, hope you succeed.
Johnny


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reggie prescott
Re: Pricing Question for TV spot
on Sep 2, 2005 at 3:47:31 pm

okay, create a day rate and a bidding form (your head is spinning now)

figure what your 'time' is worth (let's just say $100/hr for just starting out), plus materials, deliveries, dubs, pencils, gas, coffee, operating costs, maintinence, tax etc. and call it a 10 hr day. i think you should be chargine at least $1200-$1400/day as a startup.

the next step is find a bidding program (excel based usually) that you can send to a client have them sign. this will actually help you out a lot since all the line items represent a different expense. a line item for dubs, one for misc, one for labor, one for the avid or fcp, (pad certain line items that don't represent other costs you incur) this way the client can see what you are worth broken out. they love this. not just an invoice. also think of creating an overage form for things that come up during the edit that take you over the bid amount. this is very very important to have.

and get the first 50% upfront. you'll be lucky to get the final 50% within 60 days after master. be careful with this for cashflow reasons. once you become busier, get an office so clients can actually come in and work with you, and include this new expence into your bid prices, etc. it's basic business 101.

so now for future work you can really break it out from your past experiences into your future work be review your actual costs against the bid amounts. you probably saying "but i just want to do the editing" and i say, after your really get going, hire (or make a partner) a production manager/producer to take care of the client relations/bids/phones/food/bookwork/etc. they are worth their weight in gold. and you look cool for having one.

again, as stated, welcome to the biz. you have a business license don't you?



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Editz
Re: Pricing Question for TV spot
on Sep 3, 2005 at 5:53:52 pm

Here in market 130 (Mid-Oregon) Avid rates for local retail are about $140/hr. depending on the volume of work, so I'd say you were undercharging a bit. Five years ago I was doing digital linear online here for about $350/hr. on longform corporates, but those days are gone...


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