How to Determine Your Next Video Campaign Budget
The first question we always get asked in our consultation calls is about pricing. Rightfully so, most people have no idea how much video productions truly cost. They don’t know how much a studio rental would be, how much 10 background extras would be, how much that fancy cinema camera would cost to rent. The list goes on and on. Luckily, it’s our job to handle all of that, and we incur those expenses on our own dime, regardless of our fee (more on this later). The only number you need to know is your own internal budget. This number has nothing to do how much video services cost, but everything to do with how much marketing you can afford and what goals you’re trying to achieve.
Most people think the entire marketing budget goes into the production costs of the video, but that’s the absolute worst thing you can do. If any video company tries charging you a flat rate without consulting with you on your business goals and strategizing what to do with the video once you have it, you can kiss your money goodbye. Almost all of your initial marketing budget should go into running ads on the video you produce. Not in producing the video itself.
To figure out your budget number, a good benchmark is to determine your company’s total gross revenue. Let’s say you are a mid sized corporation who grossed $30M last year. Your total marketing budget for the year should be roughly 10-20% of that number. Let’s take the median 15% for this example, which would be $4.5M.
Once you have your total marketing budget, you need divide that up into different pieces of a pie. There’s traditional video marketing of course, but there’s also UGC (influencer marketing), still photography, print, billboards, sponsorships, and more. We recommend allocating the largest portion of the pie into traditional video marketing because it’s the most versatile of them all— something like a half of the total budget works well, which in this case would be around $2.25M for all video marketing campaigns for the whole year (~$562,000 per quarter).
Once you have that number, you then need to get clear on your business goals. Understanding the goals of the company is the crucial step to determining what direction your marketing campaigns will take, and what kind of growth you will be able to achieve with your budget. We will help you conservatively estimate that growth, and then based on that number, we charge a 5-10% fee for our services (which include consultation, strategy, creative, and execution of the campaign). This keeps everything transparent and solely based on the value proposition of the work instead of a random fee made out of thin air. We will help calculate the estimate alongside you, and we attach the fee to that number, keeping it low because we want to protect your investment and help you grow as much as possible. The more growth you have, the more you’ll want to work with us again, and we’re in it for the long-haul.
Want to set up a meeting? Drop us a line on our contact page.