High cost of filming ads for TV has modest advertisers reeling

The eager young advertising ``creative director'' breezed into the office of his broadcast production manager and exuded, ``Guess what, Charlie, I've found a spot in the south of France that looks just like Columbus, Ohio.'' It's a joke, of course, but it strikes a chord in the advertising industry today.

Going on location to cut filming costs for commercials sometimes produces just the opposite results. Often, agency staff, clients, and spouses tag along and turn it into an expense-laden junket with pocket-padding overtones.

Consequently, an increasing number of advertisers with modest budgets are being forced off the air because of the high price of producing commercials and rising rates for time.

Louis T. Hagopian, chairman of N. W. Ayer Inc. of New York and current head of the American Association of Advertising Agencies, cites rapidly rising expenses as chief among concerns of fellow agency executives.

The costs of producing a TV spot can include renting cameras and taping equipment; buying film and tape; salaries for the talent seen on screen in the commercial, for an off-camera announcer, or both; clothing, costumes, and props, some of which need to be specially designed; music and sound track; and, in lieu of going on location, the construction of special sets, sometimes at great expense.

In effect, production costs cover everything it takes to film or tape a commercial and put it on the air. The air time itself is billed separately as a media expense. When a TV spot is completed these days, it's not unusual for one of these 30-second epics to cost as much as $1 million.

It is difficult to put a precise price tag on the production cost of most commercials because of the highly competitive nature of the products advertised and the proprietary way that marketing budgets are treated.

One commercial in the million-dollar category was created by the Chiat/Day advertising agency for Apple Computer. It aired initially during the Superbowl telecast last January. The spot, entitled ``Lemmings,'' shows a long line of ghoul-like creatures marching off a precipice into an eerie oblivion.

It was aimed at a big-brother-like, but unnamed, computer giant. Critics charged this commercial with overstepping the bounds of competitive propriety. It was placed on the shelf after the one airing, thereby setting a record for expensiveness on a prorated-usage basis.

A commercial entitled ``1984'' and created a year earlier by the same agency for Apple fared better with viewers and critics and cost substantially less -- in part because Chiat/Day and its outside production house, Fairbanks Films in New York, had a little more time to produce it.

Richard Goldberg, Fairbanks' executive producer, says time can be a critical factor in commercial production costs.

``The longer I'm around, the clearer it becomes there are no miracles in commercial production,'' he recently told the Monitor. ``But when we have adequate time, which doesn't happen too often, economies can be effected in production.''

Mr. Goldberg went on to suggest that commercials be viewed on the basis of cost/effectiveness: ``When you're pioneering and breaking new ground creatively, it's going to cost more. But when a commercial helps you meet or exceed your sales objectives, it could be worth it.''

Coca-Cola, a company much in the news this year because of marketing zigs and zags, paid a record $2 million for the production of a star-studded commercial featuring Bob Hope, Carol Channing, Joe Namath, and half a half other celebrities to introduce Diet Coke.

Brian G. Dyson, president of Coca-Cola USA, boasted to a group at the annual ``Creative Workshop'' sponsored by Advertising Age in New York City, ``. . . we broke all the rules.''

He indicated that Diet Coke was an untested product when it was launched in the toughest market in the world, ``with the most expensive commercial ever produced -- $2 million for one commercial.''

For its part, the American Association of Advertising Agencies is keeping the issue of commercial cost control under scrutiny.

The association formed a committee at the beginning of the year under the leadership of Arnie Blum, senior vice-president and director of TV production at BBDO Inc. The committee, which includes the heads of commercial production at some of the largest advertising agencies in the country, has been meeting regularly to map out guidelines for cost control.

``I feel very positive about our committee's goals to educate agencies and clients about production costs, while at the same time reestablishing client confidence in our ability to monitor these costs,'' Mr. Blum says.

Next year the committee will be holding a seminar on controlling TV production costs for advertising agencies and their clients.

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