How to Set a Total Budget for Video Production Costs
If you are looking to hire a video production company or agency you have likely come to the realization that until you determine a total budget for the project, you may not get very far.
Video production costs can be very confusing as different packages, pricing structures, cost sheets etc... can vary greatly from company to company.
In this post I'm going to give you a clear understanding of how to come up with a realistic and accurate total budget for your video production.
You will be able to contact video production companies with confidence in the budget you have set, so you can maximize both your response rate as well as the quality of proposals.
We are going to cover:
How Video Production Companies Create Proposals
While I understand the desire to get multiple proposals from different companies - a process I completely agree with - it's important to understand that a high quality, creative video production agency cannot be hired the same way you would hire most other professionals.
Because there are so many different directions and possibilities involved in a creative video project, it's literally impossible for any video company to know how to begin putting together a quote without a very deep understanding of the project.
If you were to ask an architect, "How much does it cost to design and build a house?" their answer would be a long list of questions, the first of which would surely be: "What is the total budget for the design & build?"
Video production is a lot like designing and building a house. The production company will need to know:
As much detail as possible about the video you want to create
The total resources that will exist for the design & build
If you request a proposal from video production companies without providing both of the above, you are likely only going to get inaccurate proposals, built on guesses.
For example, here are the steps that are involved in our proposal process at Intrigue Studios.
Free consultation to discuss video goals & scope
Intrigue creates a clear, customized production proposal
What is a Realistic Total Budget for Video Production?
If you are reading this post it's because you likely want to determine a realistic budget for your video project, and you either have no idea where to begin - or you just want to validate some figures you already have in your mind.
When it comes to the total budget you'll have to consider any costs of distribution or the "media buy" as well as production costs. As a general guideline, 35/65 is a common split nowadays. Meaning that the total production and the distribution will split the total budget 35% and 65%.
The lions share of 65% usually goes to the production when perceived production value is tied to the brands perception, while 65% usually goes to the media buy when the brands perception is not strongly tied to production value.
Of course, every campaign is totally different and you should consider your specific needs and campaign scope.
How to Set Your Total Production Budget
Here is a step-by-step process to set the total production budget for your upcoming video production. If you have not read the previous sections of this post I strongly recommend that you do so before moving on.
Step 1 - Determine The Value of The Final Video
As we covered in the maximum profitable budget section of this post, the first step is to determine the lifetime value of the video's anticipated results. In other words, you need to know how much profit you will make if the video has maximum effectiveness.
This will allow you to assign a value figure to the finished video, which will make it much easier to know what is or isn’t wise when it comes to the production scope.
Step 2 - Actual Distribution Costs (Media Buy)
It’s also important to consider your projected distribution costs. A portion of your marketing budget will be needed for the actual ad campaigns that will expose the final video to your target audience (this is the "Media Buy"). It’s important to keep this in mind so that you don’t dedicate all of your marketing budget to the production of the video itself.
Whether this is done in the form of cold advertising or re-marketing to an existing list of customers, you want to make sure you consider the cost of distribution while figuring out your total production budget.
Step 3 - Set The Total Production Budget
After considering all of the above you are ready to set your total production budget. Of course it’s not in stone and may need to be adjusted - but having an accurate, realistic and well thought out starting number is going to make your life much easier.
Whether your total production budget is $5,000, $15,000 or $150,000, you are now ready to start requesting proposals from video production companies and get into development for your video!
If you feel like Intrigue Studios would be a good fit for your video production project, let's start a conversation.
Contact us here to start a conversation about your video production project now!