Stuart Elliott, from The New York Times, wrote in an article earlier this week that the cost to produce one of the Doritos spots that ran on the Super Bowl was less than $200.
That is an astonishing figure.
I spent many years at Kraft managing brands such as Miracle Whip and Taco Bell. While at Kraft I worked on dozens of different advertising campaigns. Producing the commercials would routinely cost $300,000 per spot. A particularly expensive ad might cost $800,000 or more. I don’t think I ever saw a production estimate for less than $200,000.
Several years back I talked with Tim Smithe, head of marketing for Walter E. Smithe furniture in Chicago. I was astonished to learn that his team could produce a very respectable ad for $15,000 or so.
The fact that it is now possible to produce a quality Super Bowl spot for $200 is a new milestone.
The implications of this transformation in production cost are enormous. Advertisers can test produced spots, not just story boards. More importantly, advertisers can quickly change the creative. This means advertising can play off the very latest trends. It also means marketers can try one message and then quickly change it based on the results.
In the old days marketing moved slowly. Brand managers would work on each commercial for six or nine months, then put in on the air and hope to see some results in three or six months. Those days are gone. The dramatic fall in production costs means that marketers can continually adjust and refine advertising campaigns. This makes the marketer’s job more demanding but it also means there are many more opportunities for success.
One other thought: anyone paying $1,000,000 to produce a commercial these days should ask themselves if the extra $999,800 of production cost is really a good investment.
Keith—Excellent points. I totally agree that consumer generated advertising isn’t going to work for many and probably most brands.
But the fall in production costs changes things for people working with traditional agencies, too. Producing a $1 million commercial is very different than producing a $10,000 spot; the risk profile is lower and the required life much shorter. With quick and low cost production marketers can now react faster and experiment more than ever before.
On a top level this makes a lot of sense. Consumer generated advertising is a popular trend, but is it appropriate for everything? Think about all the assignments that come across your desk. Are you going to get the average Joe excited about making his own spot for ex-lax in hopes his grandmother will see it on Wheel of Fortune? The Super Bowl is a different breed.
Another thing to consider is the hidden cost of letting consumers know about the contest, building the infrastructure for submission and staff time in sorting through all great and not so great entries.
Comment on new media:
How do they break down the cost? Do you know?
Shira—The article didn’t say what the $200 went to. Perhaps it was a few props. It isn’t a lot to work with!