Friday, June 08, 2007

The Economics of Creative: Part 1

While much attention has been paid to the fragmenting viewing audience and what the devaluing of impressions will mean to media, little has been discussed in regards to what it means for the production of commercials.

Alan Schulman's recent column in Video Insider touches on the subject and suggests that commercials will need to be produced less expensively.

He refers to it as going "lo-fi".

As Mr. Schulman is smarter than most in regards to this topic, it's difficult to argue with his prognosis. And, the fact is, the industry does need a new way of thinking.

After all, the current economics of production can only be justified through large audience size and repeat exposures. Neither of which will be prevalent in the digital world of niche audiences.

But is the only answer to go lo-fi as Mr. Schulman suggests? Are we going to finally have a platform that allows us to talk, without waste, to only those that are interested in our brands, and end up having to portray our brands in a less than desirable way?

Today, the cost to produce a thirty-second spot averages $380,000. That's $12,666 per second. At one time, agencies could defend these costs by the fact that twenty million people would see the spot three plus times. That defense becomes a bit porous when only two hundred thousand might see it, at best.

But the fact is, these two hundred thousand aren't any less important. It could be argued that they are, indeed, even more important.

So, why should they be handed an inferior product?

There will be those that will argue that the cost of production was inflated to start with. And there is truth in that argument. Cappuccinos and lattes flow like water on the set of a commercial shoot. But that doesn't mean that $50,000 will deliver the same quality of message as $400,000.

Others will argue that the tools are more affordable now, so the cost should be lower. Today, everything is digital, smaller cameras are needed, smaller crews, you can edit on your laptop on the way home from the shoot.

And, yes. All of this is true.

As is the fact that YouTube videos shot with a hand-held camera that took only 30 minutes to film and cost maybe $20 bucks to put together are drawing 10 million viewers online.

So, naturally, advertisers are asking, "Why should the ad for my brand cost as much as it does to produce?"

And maybe the best answer, and perhaps the only answer, is just that. It is an ad for your brand. And an ad's job is very different than that of a YouTube video. An ad's job is to build your brand.

Brands are built on emotional, not rational connections. And emotion, like it or not, costs money.

Consider: The difference between an expensive car and a cheap car isn't found in the concept. Functionally, they are about the same. And yet, the expensive car evokes a positive emotional reaction while the cheap car is boring.

The difference is in the details.

And it's in these details where the emotion lies. In some cases, details are simply a matter of taste and style. But in all cases, details cost money. Whether you're producing cars.

Or, commercials.

So, while it's true that one can always create less expensive advertising, the tools, after all, are there, it doesn't mean that it will be equally as successful advertising. If done correctly, a $300,000 commercial can't help but have much greater impact, memorability and involvement than a $100,000 commercial. Which means it will create a much stronger emotional bond with with the viewer.

And in turn, a stronger brand for the advertiser.

Mr. Schulman mentions that in this age of viral video, it's a commoditized world. He is right in one aspect. The tools of the trade have become commoditized.

But not the talent that it takes to create what truly works on the levels that advertising needs to work if it is going to be successful.

If it is going to build brands.

Now that the digital marketplace has created such a wonderful way for people to reach advertisers, let's hope that advertisers don't forsake what it means to reach people.

More on this will follow. Including a way to continue to produce high quality work for the smaller viewing audiences that are inevitable in the digital marketplace.

No comments:

Post a Comment