2006 Production Costs Declined Sharply to $335,000 Per Commercial
By Al Stauderman

The annual AAAA Commercial Production Cost Survey for 2006 was released in November 2007 following submission and compilation of data from 818 national commercials. It showed that the average cost of a :30 commercial declined from $381,000 in 2005 to $335,000 in 2006, a drop of 12%.

The $46,000 reduction versus the prior year was the largest on record. Only in 1998 did the percentage drop by 12 points from the previous year. The average commercial cost that year was $271,000.

Accounting for reductions in the average cost for 2006 were three "not surprising" factors, as follows:

1. Shorter Shooting Time- The length of shooting time for studio commercials dropped by 20% to a recent low of 9+ hours per :30. Over the years the most important factor in commercial production costs has been the time required to shoot a spot. Shooting time can be reduced in various ways, but I'll bet that pooling production by combining multiple commercials in one job had something to do with last year's result.

2. Multiple Bidding- Another finding suggests that the advertisers and agencies were willing to use common sense and change their buying practices to achieve savings: of the commercials in the study, 67% were multiple bid. This is a nice improvement from just a few years ago, when less than half the commercials were multiple bid.

3. Location Shooting- A third unsurprising reason for the lower cost was that the majority of the spots (63%) were shot on location. Frequently, the most expensive single item in a studio production is the cost of sets. Eliminate set design and construction by working on location and you save a bundle.

Animation= Lower Costs, Unlimited Concepts-- Once again, animated commercials made up a sizable portion of the AAAA sample. And, once again, these were among the least expensive commercials to produce.

Commercials using special effects to create images that can't be photographed cost $667,000 each- more than double the average commercial cost. On the other hand, animation commercials came in at a spare $247,000 each, and were limited in creativity only by the ingenuity of the artists who designed them.

Animation can be a bridge to multi-cultural communication by neutralizing casting, wardrobe, set, prop and other cultural distractions that are unavoidable in much live action work. Look for increased future use of this cost-effective technique.