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RSSEMedia Magazine
By Daily, Geoff
PART 1
GAINING A FOOTHOLD
In part one of our two-part series on cable advertising, we'll explore how to size up opportunities in your local market and tap this revenue stream where it's available. Next month, in part two, we'll look at production challenges and how ad production differs from event video work.
For most EventDV readers, the majority of business falls into one of two categories: personal or corporate. Personal videos include the standard wedding/ mitzvah/party fare along with the increasingly popular category of retrospective photo montages set to music that can also incorporate original interviews or archival footage. Corporate videos run the gamut from training to direct marketing to simply capturing an event on tape.
Yet, as digital video production equipment continues to improve in capabilities and drop in price, videographers are gaining the ability to produce video that can rival the sort formerly found only in movies or on TV. And in doing so, the lines between event videography and cinematography or other forms of high-end production begin to blur, creating opportunities for adventurous videographers interested in identifying new revenue streams while simultaneously allowing themselves to flex their creative muscle.
One such opportunity exists within the realm of local cable TV ad production. While it may not be for everybody, both because of the technical and creative requirements as well as the competitive realities in each local market, it's certainly an avenue worth considering, especially given that it represents an entirely new category of business for most videographers.
What follows is an exploration of the opportunity that local TV ad production offers and the steps that can be taken to maximize revenue and realize success in this relatively untapped revenue source. In part two, we'll look at the process of producing a TV commercial relative to the demands of more traditional event videography fare.
GAUGING THE COMPETITION
An important aspect of determining how big of an opportunity TV ad production presents in your market is identifying the competition that already exists in that area. By far the largest competitive force in most areas stems from local cable companies that handle production in-house and at cut-rate prices. "It can be very difficult to get any commercial work because the cable companies monopolize the production. They'll offer it for short money or even for free," says Eugene DiFrancesco, principal of Plymouth, Massachusetts-based EugeneWorks (for more on DiFrancesco, see Mark Earley's June STUDIO TIME, pp. 10-12).
For these cable companies, the goal is to get advertisers to buy more airtime, which is why they are willing to offer production services on the cheap. Yet with these lower production costs often come lower production values. "You're constantly fighting against the low prices of cable companies. They're only charging that much, but their quality and creativity are limited as well," says Danny Sayson, principal of Richmond, British Columbia-based Sayson Video Productions. "You have to convince potential customers why they should pay you more than in-house cable production outfits. What more can you do for them in terms of quality and creativity?" (For more on 2005 EVENTDV 25 honoree Danny Sayson, see Kyle Oliver's September 2005 STUDIO TIME, pp. 16-17.)
"It can be very difficult to get any commercial work because the cable companies monopolize the production. Thtey'll offer it for short money or even for free," ssys Eugene DiFrancesco, principal of Plymouth, Massachusetts-based EugeneWorks.
But in-house cable production outfits aren't an omnipresent force, as there are many areas of the country in which the local markets are too small to warrant their attention, despite the fact that potential TV ad production customers do exist. "I live in a small community about an hour away from Sacramento. A lot of the time the inhouse production company at Comcast isn't interested in traveling up to my area," says Lucy Galbraith, principal of Nevada City, California-based Visions Multimedia Group. But that's not to say no customers can be found there; Galbraith says she generates upwards of 50% of her yearly business from doing TV ad production.
There are even some parts of the country that don't have any local inhouse cable production outfit at all. "About ten vears ago, the cable company in my area rid themselves of their in-house production. They disbanded their crew because they had about a six- month backlog," says DiFrancesco. "Since then, I and a number of others locally compete for business in this space."
Car agencies are obviously the best to get because they're the ones that spend the most money," says Lucy Gaibraith ot Visions Multimedia Group.
In a situation like this, competition is often driven by factors beyond price. "The competitive situation here is really delineated by style more than anything else," says DiFrancesco. He goes on to note that he and many of his competitors have strong enough personal styles that people can identify who did which commercial just by watching them.
Even in instances where many different parties are in competition with each other, that doesn't mean they're all fighting for a bigger piece of the same pie. "There is a lot of competition in my area, but the market is potentially much bigger than it currently is. There are so many small businesses around who haven't ventured into advertising on TV that there's a lot of untapped market," says Sayson. "A lot of small businesses don't know about the marketability and feasibility of marketing messages on air. They don't think they're big enough and believe that this is out of reach for them."
One of the biggest competitive factors isn't so much other production companies but instead fighting back against misconceptions of what it takes to advertise on TV. "I think that the biggest hurdle in selling someone on doing cable TV advertising is that people think it's so expensive-and it is when you're Budweiser and you're showing your ad on Super Bowl Sunday," Galbraith says. "But day to day, buying time on local cable TV is more comparable to buying newspaper advertising."
FINDING YOUR MARK
As finding new customers in this space is often more tied to educating people on the realities of local cable TV advertising than to competing for the production dollars of companies already advertising, the scope of companies that could be potential customers is broad and diverse. "Car agencies are obviously the best to get because they're the ones that spend the most money," says Galbraith. "Places like carpet stores, perhaps a laser eye surgery center. It actually can be just about anything."
And potential customers can be found in cities both large and small, although each end of the spectrum has its own advantages and disadvantages. "I think there are opportunities no matter where you are. In a small town you've got that warm, fuzzy, small-town feeling going on," Galbraith says, "but by the same token, in a big city you've got more choices of clients who are willing to do cable TV advertising. Bigger cities mean bigger businesses, which in turn can translate into bigger budgets."
Of course, companies that are doing well offer the greatest opportunities to turn a one-off project into an ongoing relationship. "The people who are the best candidates for repeat business in commercial work would be the customers that have the most money to spend because they're succeeding," says DiFrancesco. "For the little mom-and-pop shops, this will likely be the only ad you do for them. But any business that is growing can generate multiple jobs. Restaurants, for example, are usually a good source of repeat business."
For the most part, event videographers are best served focusing their efforts on catering to businesses that are more local in nature rather than futilely attempting to get the attention of major nationwide advertisers. "We basically target small- to medium-sized business that are more local. We don't go after Nike or Coca-Cola, as they typically use ad agencies that will handle their commercial production, and that's a much harder market to break into," says Sayson.
But that doesn't mean that there aren't ways to take advantage of the big-time media dollars of national brands. "For example, I did work for a company called Preserva-Wood. They are now putting their product in True Value hardware stores. That means that I now have the possibility of contacting my local True Value hardware dealer and saying, ? would like to do a commercial for Preserva-Wood representing your hardware store,' and I know that True Value will reimburse their store owners the funds for doing local TV advertising," says Galbraith. "I've done the same thing for my local Subway store, as they also get reimbursement from the national company for doing local TV advertising."
WORKINB ON A BUDBET
Getting a sense of the range of budgets associated with a TV commercial project isn't an equation with a simple solution. "That's a hard question to answer because it's going to vary across the board depending on the size of your city, the type of business, and what they want to do in the commercial," says Galbraith. "For me, I learned what the in-house production comp\any was charging and I underbid them. In my neck of the woods, I think they're charging $1,200 per commercial, and I try to stay at $900.
"Some people may look at what my dollar figure is and say that's peanuts, and it may well be in a bigger city. But the thing to remember is that there's always ways to add to that," Galbraith continues. "I tell a new client that my base fee is X number of dollars, and then you start talking with them about what they want to do. If they want a semi-pro person in front of the camera, of course that's going to be more because you have to pay an actor. If they want to do a helicopter shot, that's going to cost even more."
Despite the low cost of using cable companies' in-house production outfits, some advertisers recognize the limitations of those commercials and are willing to up the ante in order to realize a more powerful finished product. "A lot of times it varies depending on the concept. The last production we did that won the Telly we had a $20,000 budget to work with," says Sayson. The Telly Awards honor outstanding local and regional commercials and programs.
Denny Sayson's award-winning commercial tor Soo Beel Jerky played in sevoral major markets including New York, Los Angeles, and San Francisco, as well as his hometown, Vancouver, BC.
Perhaps the most important part of establishing a budget with a prospective client is to get them to realize the dynamics of TV advertising and recognize the need for their efforts to extend beyond a one-off commercial. "Clients need to know that TV is about getting their name out there, and it doesn't happen overnight. If they just want to run their commercial for one month and expect the phones to ring off the hook, it's just not going to happen. They have to be prepared for a commitment of at least six months," says Galbraith. "And if you've got a six-month commitment, don't think that you're going to run the same commercial for six months straight, since it will likely have the reverse effect because if people see it over and over again they'll start to get annoyed." Galbraith leverages this factor to convince her customers to produce multiple commercials that can be run for different periods of time over the length of their TV advertising efforts, transforming what could have only been one production into multiple opportunities for her to generate revenue. (To gain insight into how Galbraith has taken her local TV commercial production efforts to the next level, see the sidebar "Taking the Ad-Selling Bull by the Horns.")
GO GET 'EM TIGER
Once you've established yourself as a go-to person for TV commercial production, you can dramatically reduce the challenge of finding new work by simply relying on word of mouth and also by building relationships with your local cable TV provider. But it can take some work to get there. "You have to go through kind of a trial- and-error thing with Comcast," Galbraith says. "In other words, you have to be proactive at first. You have to go out and get the client, produce the commercial, and present it to Comcast. If it's deemed OK by them, then you can get put on their list of acceptable people." Once you're on this list, the cable company's sales executives are more likely to start sending business your way without you having to find all of it yourself.
But to get to that point, first you need to find some customers. One way of doing so relies on a fairly straightforward methodology. "I usually will peruse the newspaper for new businesses, ones that have just opened, or ones that have relocated. If you see a newspaper ad saying, 'We've just moved,' those are good people to go talk to because they want to get the word out, so go talk to them quick," says Galbraith.
For some, cold-calling businesses doesn't sound as appealing as being able to pitch the idea face to face. "I find that looking right in the eye of people anywhere, that's the best thing," says DiFrancesco. "Because of this, networking groups have been a huge boon for me since I learned how to better network. Business Network International (www.bni.com) has been a particularly good one for me. They give you exclusivity when you join, so if you're the videographer there's not going to be another one in your local group."
Many videographers likely have opportunities for doing commercial work right in front of them and don't even realize it. "One of the commercials that we did was the direct result of shooting somebody's wedding. Basically the groom's father owned a company, and he liked what we did for his son's wedding. So that just led into a conversation that he started by saying, 'We've never done this before, but we want to get into advertising on TV,' which led to us producing a commercial for him," says Sayson. "So now each time we do somebody else's wedding, we see that as a marketing opportunity. There's always somebody's uncle, cousin, or whoever that will have a company that needs promotion."
Sayson encountered another serendipitous opportunity at a corporate job where he was videotaping a rather dry business association seminar. "At the end of the shoot, a very humble- looking gentleman approached me to ask about the equipment that I used. At the end of the conversation, he handed me his business card and said, Tm the president of this company and we're looking at doing a TV commercial.' And that's where it led off. It totally came out of the blue, but we learned the lesson that you should be courteous and professional at all times because you never know who you're talking to."
Sounds simple enough, right? Next month, we'll move on to the next step: producing and directing the ads you book.
in the Spotlight
EugeneWorks (Eugene DiFrancesco)
Sayson Video Productions (Danny Sayson)
Visions Multimedia Group (Lucy Galbralth)
www.vislonsmultimediagroup.com
taking the ad-selling bull by the horns
While this article has focused solely on the ability of videographers to make money via TV commercial production, producing these commercials is not the only way to generate revenue from local cable TV advertising. "Making TV commercials is one aspect of how to make money. You make a commercial, you get paid. Now if you take it a step further, you can set yourself up as an ad agency for Comcast." says Galbraith. "What this means is that you'll still be working with a Comcast sales representative, but now it's you that talks to clients and sets up their airtime rather than them. You help to discover what their demographics are, what target markets they're aiming for. Then you get their budget of how much they want to spend per month in advertising and work with the Comcast sales representative in setting up their advertising schedule."
The biggest advantage of tackling these expanded responsibilities is the possibility of earning additional revenue without that much additional work. "Once you have an established client that's doing advertising, you get a commission every month based on how much they spend," Galbraith continues. "I get one bill from Comcast for all my clients. I then separately bill each one of my clients. I collect their money, and I send a bill back to Comcast minus 15%." That 15% accounts for the money Comcast saves by having someone else handle the paperwork.
"Once you've got that in place, you're literally doing nothing every month other than sending in an envelope," says Galbraith. "Your cable advertising representative will likely want you to be able to get set up as an agency, as then you're handing new business to them on a silver platter while that sales representative is still earning lheir commission on those customers. In the same turn, when the sales reps have an opportunity to supply you with just a production job, they'll do that. So it becomes a place where you're scratching each other's back.
"As far as how to start and how it all works, the best person to talk to is your cable advertising representative. If the sales rep doesn't know how to do it, talk to their superiors," says Galbraith. "Some cable companies will try to shut the door in your face, but there's no reason you can't become an agency and bring clients to them."
You can find more of Galbraith's insight into breaking into the cable TV ad business in Getling Stalled in Cable TV Advertising, a CD and booklet available to: sale from the 4EVER Group's online store and directly from her own website.
Geoff Daily (geolfdaily@bumtmail.coml is a frequent contributor to EventDV and EContent. and a contributing editor to StreamingMedia.com.
Comments? Email us at eventdv@inlotoday.com, or check the masthead for other ways to contact us.
Copyright Information Today, Inc. Jul 2006
(c) 2006 EMedia Magazine. Provided by ProQuest Information and Learning. All rights Reserved.
