When it comes to managing production budgets, there is no bigger black hole for marketers than the production house portion of a large-scale video initiative.
Despite these costs representing up to 70% of the spend of any one given project, it remains one of the least understood budget areas due to its sheer size and complexity.
And while marketers have had long-held suspicions that these costs are higher than they need to be, they are surprised to learn that they may be unknowingly overpaying for these services by as much as 25% or more.
To put that into perspective, on a $1.0M project, where production house costs account for $700K, that represents $175K in potential savings …per project. Multiply this by the number of large-scale productions you do annually and you will quickly see why production house costs remain by far the biggest opportunity for organizations to achieve considerable efficiencies in their spend.
The good news is that this inefficiency is not deliberate. Most of it is a function of a dated and flawed traditional bid process that just does not perform very well within extremely compressed timelines. It is a process that has an inherent backend nature to it that, unfortunately, limits transparency and artificially inflates costs.
And for organizations that depend on traditional cost consultants to “find” the cost savings, quite frankly, the “line by line” bid review approach used by these consultants happens way too late in the bidding process to have any real impact.
So how do marketers begin to take more control of these costs?
It starts by isolating and reviewing the production house costs of previously awarded jobs to gain a better understanding of where you are across a range of projects. From here, the goal is to compare projects, identify the major inefficiencies and determine the root cause.
While it may sound daunting, it does not have to be. In fact, with the right resources, it can be done relatively quickly and efficiently without any disruption to current work or processes.
And the benefits can be enormous!
Beyond identifying cost saving opportunities, an initiative like this will provide critical insights into your spend that will educate and empower your team, help with process optimization and assist in the development of key benchmarks for tracking and planning purposes.
Intrigued? Here is how we can help.
Haynes-Vozza is a marketing production consultant that specializes in large-scale video. We leverage a unique blend of production, procurement and marketing expertise to help our clients get the most of their production dollars.
Our Production House Cost Analysis and Benchmarking initiative is a comprehensive analysis of previously awarded bids. It will provide you with comparable metrics and benchmarks by project, by brand and/or by agency. It also includes a detailed deep-dive that identifies and quantifies areas of inefficiency within bids and your bidding process.
It is extremely affordable and can be completed within a few weeks For organizations that are looking for improved cost efficiency, there is no place better to start.
Learn more about Haynes-Vozza and the services we provide.