What’s a Commercial?

In a sign of the times, the 4A’s just recently announced that they will no longer publish their “Television Production Cost Survey.”  The survey originated in 1987 and the last published report represented the twenty-fifth year of this continuing project.

For those twenty-five years, the report provided the industry with a method of benchmarking the industry average cost of producing television commercials, providing data including: 

• The average cost of a 30-second commercial
• Costs by commercial type, e.g., vignettes, animation, table top
• Costs by product category, e.g., automotive, packaged goods, retail
• Editorial and post-production costs
• Music costs

According to the last published report – the 2011 Television Production Cost Survey – the average cost of a 30-second commercial was $354,000.

But today’s super-fragmented, content-demanding media environment has made the report obsolete.  Who shoots just a 30-second commercial (alone) anymore?  And what is a “commercial” anyway?

Content is king and marketers are producing all sorts of video content.  For web sites, for online video, for digital place-based advertising, and, of course, television.  The traditional 30-second commercial was largely a one-time event for most marketers.  But today, many marketers are producing episodic videos, that is, a series, and distributing them on various platforms – paid, owned, and earned.  And marketers and they agency partners have gotten smarter over the years and learned to produce video content more efficiently.  It’s interesting that average cost of a 30-second commercial in 2011 was actually lower than it was in 2001!  See the chart below, from the 4A’s reports over the year.

So farewell to the 4A’s Television Production Cost Survey.  But it’s a new era.

Source: 4A’s

-Bill Duggan, Association of National Advertisers (ANA) Group EVP of committees, conferences and sponsorship