AAAA: Cost Of 30 Second TV Commercial Down.

The average cost to produce national television commercials in 2000 declined three percent for 30-second spots and one percent for commercials regardless of length, according to the American Association of Advertising Agencies’ (AAAA) 2000 Television Production Cost Survey. Only two times in the 14-year history of the annual report, in 1995 and 1997, was a decrease reported.

In contrast, 1999 average production costs for a 30-second spot increased by 16 percent. Prior to 1999, the highest increase was a 12 percent hike reported for 1991.

In actual dollars, the three percent decrease represents $11,000—the difference between the national thirty average cost of $332,000 reported in 2000 and $343,000 revealed in 1999. For national commercials of all lengths, the one percent production cost decrease equals a $2,000 difference from the previous year—from $308,000 in 1999 to $306,000 in 2000.

Sixty-eight percent, or 1,230 of the 1,807 national commercials (of all lengths) reported in 1999 were 30- second commercials. Since thirties supply the majority of the report’s data, the figures presented for the various production elements are based on costs incurred in the creation of 30-second spots.

Lower Production Company Costs/Directors’ Fees and Rise in Studio Shoots

The survey showed that, among other factors related to decreased costs, the average total production company net costs went down three percent from $235,000 in 1999 to $228,000 in 2000. In contrast, overall costs rose 18 percent from 1998 to 1999.

Directors’ fees per 30-second commercial dropped five percent to $21,000 in 2000 compared to 1999, when it climbed 16 percent. The practice of studio shoots increased to 19 percent, while combination shoots decreased to 17 percent when compared to last year’s study. When shot in a studio, a national thirty took an average of 13 hours, the same as last year, compared to 14 hours when filmed on location—a nine percent decrease from 1999. An average of 18 hours was required to shoot a 30-second commercial shot both in the studio and on location, down from 20 hours in 1999.

Single bids decreased three percent compared to 1999 while 97 percent of the thirties were firm-bid, a one percent increase over 1999.

Drop in Post-Production Fees

The survey found the average cost to edit and finish an original thirty decreased by two percent, from $43,000 in 1999 to $42,000 in 2000. The average cost rose 26 percent the previous year.

Creative/labor fees decreased by eight percent, and music costs posted a three percent drop compared to a 35 percent increase in 1999. Video finishing remained the same while sound recording and mixing increased by 20 percent.

Cost Averages by Category and Commercial Type

Five categories witnessed the greatest decreases, dropping as much as 42 percent in one case: Auto Accessories/Supplies (-42%); Furniture/Appliances/AV Prods(-27%); Beer/Wine(-23%); Soft Drinks/ Snacks(-25%) and Retail & Fast Food Restaurants(-20%). Production costs for the three other categories posting declines fell by less than 12 percent.

In contrast, two categories showed significant increases—Beauty/Fashion/Cosmetics (50%) and Telecommunications (46%). Budget increases higher than 17 percent were found among such categories as Auto/Trucks/Motorcycles (20%); Corporate Image/Media Promotion (17%); Travel/Vacation Destination (19%) and Other Products (24%).

When viewed by commercial type, costs dropped 32 percent for commercials classified as Interview/Testimonial, followed by an 18 percent decrease for Monologue, and 12 percent decreases for both Tabletop/ECU Products/Food and Animation. The remaining commercial types showed a minor decrease of one percent and a number of increases such as Song & Dance (14%); Large-Scale Prod Performance (14%) and Single Situation/Dialogue (16%) among others.

About the Annual Report

Twenty agencies, including all of the top ten U.S. advertising agencies, and 15 of the top 20, participate in the AAAA Television Production Cost Survey each year. The computerized system for reporting television production costs was started by the AAAA Broadcast Production Committee in 1987. This continuous collection and dissemination of television production cost information enables the industry to make valid comparisons across several advertiser categories.

The results of the AAAA 2000 Television Production Cost Survey are for the 2000 calendar year only. They may reflect effects on production costs from the six-month Screen Actors Guild (SAG)/American Federation of Television & Radio Artists (AFTRA) strike that same year.

The development of a computerized system for the reporting and analyzing of television production costs was begun by the AAAA Committee on Broadcast Production in 1987. This report represents year 14 of the continuing project.

Twenty agencies and branch offices participated in the 2000 Television Production Cost Survey. They include all of the top 10 U.S. agencies and 15 of the top 20 agencies.

There were 1,807 national commercials of all lengths reported in the 2000 National Advertisers database. The average cost of these commercials, without agency commission or any other form of agency mark-up, decreased 1% in 2000. The average cost went down from $308,000 in 1999, to $306,000 in 2000.

As a point of historical note, readers are reminded that the strike by members of the Screen Actors Guild (SAG) and the American Federation of Television and Radio Artists (AFTRA) took place from May through October 2000.

National Advertisers—Average Costs of a 30-Second Commercial

To facilitate the interpretation of the 2000 survey, and to assist the reader in applying it to his or her own production statistics, the summary will continue reporting the average cost of a 30-second national commercial. In the 2000 survey, 1,230 of the 1,807 national commercials in the database, or 68%, were 30 seconds in length, at an average cost of $332,000, down 3% from $343,000 in 1999.

National Advertisers—Production Facility Costs

The practice of studio shoots increased to 19%. Sixty-four percent of the thirties were shot on location in 2000, the same as in 1999. Combination shooting (using both studio and location shots) went down three points to 17%.

The hours it took to shoot a studio commercial remained the same as 1999. Location commercials went down in shooting hours by 9% in 2000. The average studio thirty took 13 hours to shoot and the average location thirty took 14 hours. The average combination shoot took 18 hours.

The survey showed that in 2000, 97% of the thirties reported were identified as firm-bid, while 3% were cost-plus. Also, 54 % of the thirties were single bid, while 46% were multiple bid. This represents a 3% decrease in single bids over 1999.

The average total production company net costs went down 3% from $235,000 in 1999, to $228,000 in 2000. The total director’s fee per 30-second commercial was $21,000 in 2000, 5% less, and the production company’s percent of mark-up averaged 26%, up from 25% in 1999.

National Advertisers—Post-Production and Talent Costs

The average cost to edit and complete an original thirty in 2000 decreased from $43,000 in 1999 to $42,000 in 2000, a 2% decrease. Video finishing remained the same as 1999 and sound recording and mixing increased 20%. Creative/labor fees showed an 8percent decrease and the cost of an editor’s mark-up increased 3%. Music costs decreased 3% in 2000, averaging $34,000 per job. Talent costs increased 8% in 2000, costing $14,000 per spot. Commercials using on-camera principals averaged 5 on-camera principals and commercials using extras averaged 15 extras.