Change is a constant in the commercials production and advertising worlds- any production company or editing, post, music or audio post company not on board with and adapting to that would not be here.
Yet there is a strange criticism of production companies that they have not changed – strange because they are already the most flexible business model possible- a small core and taking people on as and when they need them. Through that they manage the peaks and troughs of their project-based income.
There is a disadvantage though, which is that it doesn’t leave any resource to explore new opportunities- it’s just ‘all hands on deck’, making the current production as good as possible and getting the next one in.
Exploring those opportunities, and grasping some of them at least, is critical though. Business cannot only be managed by cost cutting – it must also have a vision, an effective path toward that and resources devoted to it.
As a trade association, it is exciting for us to help. Firstly because whenever competitors get together the first topic is what is driving them mad – threats to their business. It is critical we help member companies manage those challenges but that we move beyond that to help them grow their business by owning new work streams.
Secondly, we have an overview of the industry and invest time in exploring those new opportunities so we can present them to production companies in an easily digestible form, with clear opportunities and guidance on how to grasp them, opening the door for all those who want to go through it.
Working direct to client is one of those opportunities. We are moving from the traditional client to agency to production company model, not to a new one but to a thousand different solutions depending what is right for an advertiser according to the aims of a piece of their advertising.
Working direct- client to production company is happening and is probably the most significant new opportunity for production companies seeking new work now.
Is that a threat to agencies? I don’t think it is. Big advertisers such as Unilever, P&G, Nestle, and Ford need agencies for ideas, for consistency and for the management of assets. If they fired them they would have to employ thousands of people themselves worldwide.
The very best work, both creatively and in terms of effectiveness (it isn’t a coincidence that there is a strong correlation between those two things), is being created by the best agency, with the best planning, best creative and best production, working with the best production company, best director, best editor, best vfx co, best music co and best sound designer. There is no evidence that any new approach to work can match the quality of bringing the absolute best in all those disciplines.
So where is the opportunity for production companies? It is two- fold. First, small brands, to whom TV advertising was either irrelevant or not accessible because of cost or both, want audio visual content. They see that audio visual advertising, I.e. Commercials, is what works on the internet and most specifically on phones. Instagram’s daily user base is five times that of Twitter, as an example.
Secondly, we are seeing big brands employing different solutions. They have their agency create commercials with a production company where that best achieves their business goal, they do some work direct to production company and they do some work themselves. Sky, the second largest advertiser in the UK last year, and Apple, another big UK advertiser, are examples of that, choosing the best solution for each piece of work.
How is direct to client work going? It is certainly going, with most production companies in the UK having done some, at least. It is a long way from fulfilling its potential though in terms of the volume of work and the quality of work.
We often see it is based upon a chance personal relationship, for example the production company MD knows the brand marketing director. That can be the basis of a successful relationship by which the advertiser gets the work it needs, but even those production companies, the ones who have made successful advertising for clients, struggle to leverage that success to working with other brands where they don’t know anyone.
So far, the experience of production companies working direct to client has been very variable. At its best it streamlines the process, means they talk direct to the decision-maker and cuts out layers of approval and cost. At its worst the production company struggles with an advertiser who has no understanding of what they need to do to make the process work.
That’s the production companies’ perspective. What is critical, of course, is what clients think.
We could see from the outset that much of the way we present ourselves and sell can’t work with clients.
Many production companies have daft names. Their websites just show films. There is nothing about the company itself and the people behind it. The films are shown with no context. Why were they made? What was the business aim of making them? Were they successful in that business objective?
None of that is apparent from any production company website.
The same applies to production company marketing. Brands reported to us that “we get lots of marketing emails from production companies, we don’t know who they are or how to distinguish one from another”.
So lots of ineffective marketing to advertisers, drowning them in noise!
We decided that what we needed was much better information on how clients viewed the opportunity to work with production companies. So we commissioned Shaun Varga, a consultant with a successful track record of winning business for agencies and of helping businesses understanding how best to access opportunities to investigate and report.
Shaun spoke in detail with a number of clients. His conclusions were clear and helpful and the industry has embraced them and the criticism and concerns of clients openly and is seeking to address them.
Let’s start with the good news. Video content is winning and clients understand it is critical, and clients are open to new ways of working.
They identify two big barriers to production companies working direct with them though: the way production companies sell and their lack of account management skills.
They see that lack of brand knowledge- evident under both concerns above and lack of account management skills as barriers because while we think we are offering something faster and more agile- they see it as more work. “New relationships mean more admin, more paperwork, and things may take longer.”
Brands see prod companies as “wanting direct relationships but under-estimating the workload involved to give satisfaction to the client”. Lack of account management was mentioned by all clients. This was news to me; I could see the selling failures but I had thought the skills of an EP provided account management. Wrong – they aren’t the same thing, we learnt.
So what is account management? What is it precisely that clients want? These were the answers:
– The person who ‘gets’ my brand and owns ‘the knowledge’
– A trusted advisor
– Someone I can talk to about the marketing context
– A point of continuity I can develop a working relationship with
– A person who understands and represents my point of view to their colleagues
– Someone I can trust to look after my interests
It can’t be ‘an order taker’ and it can’t be the company owner because clients see them as having to focus on their own business So someone senior who understands marketing.
The process is often unclear as many clients won’t engage because they don’t know what the production process is. This is because the production company hasn’t explained it to them. To work with clients, production companies need to give them a play book which consists of what will happen and when and what the client needs to do at each stage – make payments, organise product for the shoot, approve cast, etc. etc. An agency will know these things, a client won’t – at least not until they have become very experienced in working direct.
The second major area of concern is selling to clients. Clients want to know what you can do for them, that you understand their challenges and objectives and propose a film(s) that can help them achieve those objectives and they want you to explain why it will achieve them.
To send them films because you believe they are ‘good’ films without any context or without any reference to marketing goals and what the films did for them is useless and suggests a naivety toward business from production companies that does not engender confidence.
So clients complain that measurement is rarely mentioned and case studies of previous success are not offered or available.
Potential cost savings are only interesting if the client is confident in a positive outcome.
Here are some client thoughts from the report:
“I’m open to speculative approaches and get a lot of direct approaches and generally they’re shit. Nice ideas from people with no clue about the brand. It needs to do what I want it to do, not what they think is a cool idea.”
“I get sent at least ten content ideas every week, nine of which are badly executed. Production companies can’t sell. What they really need to do is mind-read what the marketing director is trying to do. But often that is not all that difficult.”
The report concludes that clients want to see the following on a pitch:
That the production company understands the audience.
That it can differentiate itself from its competitors.
That the production company can speak the client’s (marketing) language.
That it can show it is has thought about the client’s business challenges.
That it can talk about measurement and evaluation.
That they have evidence of effectiveness and client endorsements.
In conclusion there is huge potential here but there is also a huge amount of work to do and production companies need to acquire new skills to grasp that opportunity.
So a production company needs to consider if it believes in the opportunity sufficiently to do that work and whether it is able to find the resources to do so.
For production companies who don’t, focus on agencies or your other work flows rather than sending out emails of marketing materials with no prospect of success and which just clog up the pipeline for companies who are developing the skills and getting the resources to make direct to client work.
Think always about adding strategic value, helping clients reach their business objectives.
Bringing an audience by explaining how and where the film will be seen and thoughts on ROI will also help.
Target the right people – companies with the right structure and the right brands to engage you.
Work out what the prospective client is trying to do and tell them how you will help them do it. You must explain the problem you are solving, not what film you can make.
APA members have the most amazing set of skills to build on – the ability to transform an idea on paper into a brilliant film. With that foundation and these new skills, the demand for their services will be greater than ever.