Thursday, December 20, 2007

The Cost of Advertising

There's a very educational post up at the Photo Business News & Forum about advertising budgets and usage rights to images. Harrington's message is to know what questions to ask so you can price your quote according to the expected exposure (and rights needs) of the image(s).

Essentially, if you're a big-time (or even small-time) photog and an advertising company comes to you for a quote, they probably know exactly what the budget is even if they are evasive when you ask them about numbers. So ask them for the proposal docs (outlining the budget) and the media schedule (where the ads will run). This will both give you an idea of where your quote should be and allow you to adjust your quote upwards if the exposure will be very high for the photo.

While his point is great, I got a heck of a lot more from looking at his visual aids.

For instance, he gives an example proposal cover page, including:

"We recommend a full-day shoot, in one New York City location. This will allow time for shooting photography for both the "parents centric" and the "children centric" ads in the same day, which is the most cost-effective approach. The budget for this shoot, including all photographer's fees, location scout, permit fees, stylist, and photographers rights package is $12,000-$14,000."
Yeah, there's some big money in photography. Even if the photographer gets only a quarter of that budget for her time and equipment, that's still $3-4 K for a day's work plus post.

I've had plenty of concerns about the photography industry as a whole but I see now how a mid/high end photographer can make ends meet. Sadly, it's the low end that suffers, since the industry is under attack from both directions: the consumer camera market makes do-it-yourself portraits more appealing and micro-stock allows many companies that pay a decent chunk of change for images to pay a tiny fraction of that. But that's a post for another day.

Another thing that was awesome to see was the media schedule (click here to go directly to it). For quite a while I've been curious about the costs of advertising, and the three quarters of a million dollars in this budget was quite a surprise. Wow, that's some big money (makes sense though, since ad agencies aren't known for barely making a profit).

This also relates a bit to my experiences with Google Adsense. Without giving a lot of detail ("The first rule of Adsense revenue is..."), I've been curious why some clicks get me a penny of revenue while others are 50 cents or more. How do companies make a profit with almost a dollar a click? Can they really make that money back just by someone visiting their site?

But compare those rates to the provided media schedule. Assuming the impressions figure given is per 'in', it costs around 1.9 cents each impression for in the paper, 16.5 cents for the style magazine, and 1.9 cents on the web. Think about it -- that's 1.9 cents each time the image is shown on the web -- even if nobody looks at it (or your ad blocker ignores it). So 50+ cents for an actual website visit isn't much.

There is definitely some big money in advertising, and as a result, some big money in advertising photography. Imagine the difference a great image will make in the effectiveness of a campaign vs an image that is merely o.k. A few extra thousand for a quality photographer is nothing when your overall advertising budget is nearly a million dollars!

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