How To Stay in Your Video Budget

If you are going to use your family camcorder or phone to capture video for your project then you can skip this article.

Creating a video production is always a balancing act between keeping the costs within your budget and getting the best video possible. No matter the size of your budget most would agree that the one budget line item that is even more important than the total bottom line cost is the the Contingency Costs. Some budgets allocate zero for unexpected costs (e.g. Plan B is Plan A) and some allocate somewhere between an additional 10%-30% of the total budget so the entire video production is not torpedoed by a smaller hiccup after the project starts. Whether you plan contingency costs or not I think all would agree that every effort should be taken to work within the provided budget. The following are some areas where you can do just that.

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Start with Reasonable Expectations. The biggest budget error you can make is to start with a budget that is completely not based in any type of reality for the type of video you want. Maybe you’ve done video production or your brother does and you think it should take a few minutes of shooting followed by 30 minutes drinking coffee and editing in front of your computer. Or you are basing your budget purely on how much you can afford and have not reconciled your available budget with the cost will be for the type of video you are seeing in your mind’s eye, and even worse you have convinced yourself it’s a reasonable expectation. If you have looked on Craig’s List or one some competitive job boards your low budget expectations seem to be validated but be prepared to learn that professional video producers will charge much more and for good reason. For a professional corporate video $500 a produced minute for a lower production quality and $1,000 a produced minute for higher production quality is a broad but useful rule of thumb. Lot’s of factors determine actual cost so discuss those in detail with any potential video producers to refine budgets. Setting up a camera and letting it roll 10 minutes for a one take one shot video won’t cost you $10,000 but a 30 second spot with a helicopter shot tracking a Corvette will.

How do you determine what is the right budget? On the Agency Side, we hate putting a lot of time in on estimating costs and submitting a proposal just to learn we aren’t even close to your projected spend. We just wasted your time and ours. On the Client side, the biggest fear is that a video cost will magically become your budget. That seems to mean that we could’ve done the project for $2,500 but since you said your budget was $5,000 our bid will come in at a comfortable $4,500 and you will have overspent. I can sympathize.

Here is how I would handle it so everyone’s time is maximized. Take your budget (that is hopefully based on something reasonable for video production) and hold back some percentage (say 25%) and then tell potential agencies what your budget is for the project (the 75% number) and don’t mention you have held anything back. In fact tell everyone your budget is the maximum and needs to include everything. Then lay out your expectations and objectives to the potential agencies and let them compete on how much value they can deliver for your budget while getting as close as possible to your vision. That way you can avoid overlooking a great agency simply because they couldn’t guess what your budget is.

I like this approach because I can determine how much value I think I can deliver and how much profit I think I can generate for myself and then decide how much I can reasonably commit to on a project. Knowing you are doing this with the other agencies will inspire me to create as much value and creativity in my proposal while ensuring there is enough profit for me to be worthwhile for us to do the project. Then if things don’t go as expected you will have a bit of money (the 25% you held back) to keep your project on track. By starting with a reasonable budget and clear expectations from the start you will reduce the chance that the budget will climb out of reach during the project.

Lastly, if you determine that you don’t have enough budget to produce a video that will do a fantastic job for you, then please do not proceed with the project. “A video is better than no video” is a terrible, terrible strategy. Postpone your project and save up until you can get a fantastic video. Why must it be fantastic? Videos are not soft lines in the sand that sort-of define your public sense of quality and professionalism. They are hard chiseled proclamations that are semi-permanent. You take a stand with a video. It is there to stand on it’s merits. A poor quality video tells people you will tolerate low quality and that is NOT the impression you want your potential, and existing, customers to form of you. Your customers might have just looked at a competitor’s video that was professionally produced, then if they see your impatient video attempt, followed by another competitor whose video is of higher quality, you will look inferior simply by an irrational comparison of the videos. Avoid putting your company in this inferior position.

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Video Producer Expertise.  The quality of the production team will drive much of the cost of course. I say get the best team and gear you can get for your budget instead of trying to cheap out and hire sub par folks in an attempt to pocket the change.  What typically happens is that when, not if, the cheaper team lets you down in some way, you will have to hire another team of a more reputable nature to clean up and the project can cost more than just hiring the right people from the start. Now in the event you hire that cheaper team and problems occur there are only two choices when budget problems occur. Either you dial back the production so costs stay same or you dig in and pay more. I have seen producers agree up front to a lesser bid they know is too low and then after you have spent most of the budget they hit you up with the cost increase they knew about from the start and thinking that you will have no choice to cough up the extra $2,000 so you won’t lose the $6,000 you’ve already invested. It’s only an additional 30%, they might say, not the end of the world right? Shame. Check references of potential agencies to see how they perform with budget management.

Lastly be very clear about the production quality in the video you are expecting by referencing other example videos. That cool 5 second shot you like doesn’t seem like a big deal but it might have been done on a RED camera that costs thousands a day to rent and an 18 foot crane that costs from $500 to $1,000 a day to rent (plus shipping), not to mention the experienced operator(s).

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Concept Creep.  Jumping into scheduling the actual video shoot might feel really productive but it is a tragically bad idea and will result in a poor product that will probably be fairly useless. A solid Creative Brief to outline the project’s strategic objectives, audience, final distribution, call to action, style, and critical factors that will make the video project successful is essential to know if the project is getting off the rails creatively, and to help keep from drifting off course to begin with. Meticulously designed scripts are a huge overall time saver. Visual aspects should be storyboarded and evaluated while it’s still cheap to make changes (pencil and paper now, expensive later). Work your hardest to nail down every detail up front and  then stick with it as much as you can throughout production of the video.

It will be tempting during the shoot when the marketing director suggests something and you think, Yeah, let’s do it! It’s hard to evaluate how changes might affect everything on the fly and so it might not come out till after the production is shot that the super spontaneous suggestion to show your competitor’s product in the video violates the law in some way and the video is now unusable.

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Back Seat Driving. It’s prudent and responsible to stay involved at the right level to ensure the schedules and budgets are on track. There is a line though that once crossed your “involvement” changes to meddling and can even sabotage efforts unintentionally.  Lawyers will tell you one of the biggest factors that drive a client’s legal bill to be so high is a client that argues with them or tries to take over the process. Hire your video production team, set expectations and set clear communication. Establish the right level of oversight and involvement for yourself and then let them do the work for you. Be the client, enjoy the role and let them do their job. You asked them to meet your expectations and budget and if you interfere you might just prevent them from doing that. Then in addition to a less than ideal project you have finger pointing over who pays for the overages.  You tell them they didn’t do a good job and you had to jump in and they tell you that they could’ve been successful if you hadn’t interfered and even if you are right, you’re wrong, and you won’t be able to prove otherwise usually.

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Areas to Cut if Heading Over Budget.  You are into your project and budgets are being exceeded! Help! What can you do to stop it from getting worse?  First, like most of these suggestions a little bit of process in the beginning will give you opportunities later. You will want to establish a budget review and status reporting method with your video director so you will be aware of a budget that’s slipping. Even if you didn’t do this but you believe it’s slipping the next step is the same.

  1. First thing is meet with the Director, preferably face to face and immediately.
  2. Communicate your concern and request in writing and verbally  that all work that can be stopped to be stopped to prevent the condition from getting worse.
  3. Then explore with the Director areas where the budget can still be dialed back. Look at each production item that is in the budget and assign a value to each item in terms of how important they are to your end result. A designation of A,B,C or 1 – 10 will work fine. Then sort the list in descending order of how important and circle each of the items that are not critical until you account for enough money to bring the project back in line.
  4. Discuss responsibility for the overages. Depending on your contract with the Production Company you may be responsible for these expenses or they are (fixed price arrangement) sort through this and come to an understanding about these expenses before re-engaging the project.
  5. Confirm the new plan with the Director in writing and then get the project going again. If you haven’t decided to cancel the project at this point, establish a tight budget and progress review process between you and the Director going forward to stay on track. You’ll want to also make sure that a careful review of upcoming expenses is done to limit any future surprises.  Are there any legal fees expected? Are all distribution fees accounted for (DVD’s, archival, etc).

This list is in no way exhaustive but should give you some ideas that can help you. Your Video Project should be fun so after you take care of business, get back to enjoying things and you now know more for your next project.  It might seem like a lot to learn but the rewards can be big for you. Happy Marketing.

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