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Are You Spending Too Much on TV Production?

Jonathan Rolley
Jonathan Rolley Posted on Nov 20, 2016, 1:29:53 PM

As a leading Melbourne advertising agency, we have partnered with some of the fastest-growing brands and online startups from around the globe. One question we often get asked is, 'How much should we allocate for TV creative and production?' Although each client is unique and requires a tailored marketing strategy, there are some general rules that apply when structuring a performance TV advertising campaign with the goal of maximising your ROI.


someone holding a clapperboard in front of  a video camera, with a microphone and light

 

What is your total TV advertising budget?

Your total marketing budget will have a major influence on how much to invest in TV creative and production. As a general rule, we advise our clients to invest no more than 5-7% of their overall TV advertising budget into the creation of TV ads.

For advertisers with limited budgets, this could mean producing a graphics based commercial for just a few thousand dollars. For a client with a larger TV budget, this could mean looking to produce 4-6 TV ads (with several creative variations for testing) for $50-80k. In our experience, a client should only be looking to invest over $100k into TV production if the concept has been previously tested on TV and the organisation is looking to invest well over $2M into their media strategy. Even then, there is no guarantee that more expensive TV ads will deliver a higher ROI. 

 

TV budget under $500k

If your brand has an annual TV advertising budget of under $500k, we often suggest a graphics based commercial as they typically deliver the core message and greatest ROI. Multivariate testing also dramatically increases performance. As such, we typically suggest investing $25-35k of your TV budget to produce half a dozen TV ads with small variations. Small changes to TV production can have MASSIVE implications on response rates. Testing different versions allows for creative optimisations, learning and continual improvement. Producing great TV ads with a limited budget is the ultimate test of creativity. 

TV budget between $500k to $5M

Clients who have larger TV advertising budgets, typically investing $100-500k a month, can take creative efforts to the next level. This will often involve a live shoot, greater levels of production and also includes neuro response analysis to optimise TV sequences and response rates before the TVC goes to air. If ROI is at the heart of marketing expenditure, we would strongly suggest investing no more than 5-7% in TV production. In our experience, expensive TV commercials DO NOT have a direct correlation with higher response rates. In fact, we often find quite the opposite. 

TV budget over $5M

When an advertiser has a larger TV budget, this is when they can start to push the boundaries of creative and big ideas. Some advertisers pay between $500k to well over $1 Million dollars for a single TV commercial. This is where clients are happy to take big risks in the hope of a greater return on investment. For most of these clients, having a failed campaign will not have a detrimental impact on their business. They will simply not achieve the desired sales forecasts and need to review their marketing strategy in the near future. 

 

Direct Response Media is a leading performance-based Melbourne advertising agency. If you're open to learning how Direct Response TV (DRTV) can drastically improve your lead generation and ROI, please click the link below for a FREE Performance TV Assessment.

FREE Performance TV Assessment

Credit Image: PAUWR

Jonathan Rolley
This post was Written by Jonathan Rolley

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