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Direct Response Marketing

TV Spot Production Cost Rises 7 Percent

6 Feb, 2013 By: Doug McPherson


NEW YORK – Time to adjust your ad budgets: The cost to produce TV ads (before any commissions or other markups) rose 7 percent in 2011 to $298,000 compared to 2010.
An American Association of Advertising Agencies’ survey says cost increases for the production houses were even higher – with an average hike of 13 percent to $242,000, while their markup inched up just 1 percent.

For 30-second spots – about 60 percent of the ads analyzed – the cost bump was 9 percent, to an average cost of $354,000.

Most of those surveyed say on-location shoots were the most common approach. More than 80 percent of the 30-second spots analyzed for the 2011 period were shot on location. About two-thirds of spots in both the 2010 and 2009 periods were shot on location. The rest were either shot in the studio or some combination of studio and location.

Ads are also taking longer to shoot – location spots took 11 hours to shoot, up 5 percent from 2010 – while studio commercials took 24-percent longer to shoot at more than 13 hours. Combination shoots took 12-percent longer, or more than 14 hours.

The average director’s fee for a 30-second unit was $21,000, or 5-percent higher than in 2010, while talent costs shot up 19 percent to an average $19,000.

Categories becoming more expensive to shoot include apparel, financial, retail, soft drinks, snacks, office equipment and computers – all of which showed 50 percent-plus year-to-year spikes in production costs. The beauty, fashion and cosmetics categories showed the biggest drops – about half as much to produce ads in 2011 as the year before.

The association has analyzed commercial production cost data for more than 20 years. An executive summary of the 2011 data is posted on the organization’s Web site, www.aaaa.org. The association says findings were based on data from 10 agencies for 506 national commercials of varying length.

Response will release its annual cost of DR spot and long-form production research in its March issue, as part of a feature on the DRTV production space.


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