Business


Estimating 2.0: How to Price Ad Jobs for Print, Web and Social Media

March 4, 2017

By David Walker

To land commercial jobs, photographers have to know how to estimate the costs. Clients rely on estimates—often in combination with creative treatments—to make hiring decisions because they indicate the level of production expertise photographers will bring to the job. We recruited freelance art buyer Karen Meenaghan and two reps to show PDN readers how the process works. Our goal is to help photographers make better estimates, ask the right questions, understand the client expectations and consider realistic costs for a production.

Typically, three photographers bid on a job, but we asked only two reps to participate in order to save time for our volunteers. The reps asked to remain anonymous. Meenaghan came up with a fictitious commercial assignment: a one-day lifestyle shoot for a campaign called “Cook Like a Pro at Home.” The faux client is a manufacturer of high-end kitchen knives. The campaign would show a chef cooking dinner at home for his or her family, using the client’s knives.

Because so many clients now want images for web and social media advertising, we asked Meenaghan to develop a brief for a social media campaign. She explained that clients expect to pay little for web and social media images. The production costs of those images are usually covered by the production expenses for an associated print or broadcast campaign.

With that in mind, she developed an assignment brief that calls for various executions for a “hero” image for print use, including out-of-home advertising. In addition, the brief calls for 20 “inset” images for online use, including social media. Meenaghan’s brief, which spells out the details of the assignment, is reproduced in its entirety here (download the PDF).

Photographers (and their reps) usually get a chance to gather additional information about the job through two phone calls: a “creative call” with the creative director (and/or art director) on the campaign, and a pre-estimate call with the art buyers. The creative call participants usually include the rep, a producer and sometimes the stylists, in addition to the photographer and the creative director.

“The main thrust would be asking questions to the creative director, who would be illuminating things on the job specs that are hidden and would need to be addressed for the estimate,” Meenaghan explains. More importantly, the creative call gives photographers a chance to sell their ideas and suggestions about the execution.

Creative calls were not part of this exercise. “That’s a glaring omission,” Meenaghan says. To save time—and alleviate having to recruit volunteers to play the roles of creatives or producers—we cut directly to the pre-estimate call instead. Pre-estimate calls are more about the logistics of the job. Those logistics do depend upon some of the creative decisions discussed during the creative call. So Meenaghan played a secondary role as an art director, answering creative questions the reps raised.

We listened in on the pre-estimate calls with both reps. Here are the highlights.

Pre-estimate call with Rep1

Rep1: My understanding is that you’re looking for one main shot, with variations for different mediums, and inset images to tell the story.
Karen Meenaghan: That is correct. And we’re going to execute it in bunch of different ways, other than a straight portrait, because it may be there’s a shot we like better—in the food prep or setting—[for the hero image].

We’ll choose just one shot to be the print ad. We want a range of motion, showing someone cooking and serving to the family. One image will be the print ad, and a bunch of little ones will be insets. You’ll know which will be insets, because it will be a hand on the knife, or a bowl of scallions. Those wouldn’t be the main print ad. But to keep the fee manageable, we’ll just include one main full-size visual, and [the client] can buy extras if they want to run different versions at the same time.

Rep1: In terms of casting, it’s the chef, two kids and a spouse. So two adults, two kids.
KM: Yes.

Rep1: What is the video going to be used for?
KM: We’re not really sure yet. But assume it’s for web, and it’s a non-union signatory ad agency.

Rep1: What do “transcoding” and “color profile” mean?
KM: The transcoding gives it a basic color process and time coding for the editor. It’s basically [equivalent to what] the digitech would do [to prepare] still image files.

Rep1: And we’re not doing any video editing?
KM: No post-production, just capture. What I’m expecting to see is the crew, the equipment, and a hard drive as the cost associated with the video.

Rep1: OK. And you also say no beauty shots of knives?
KM: Whatever happens naturally, lovely, but this isn’t the time or place to capture a gorgeous still life of the product.

Rep1: For behind-the-scenes images, do you want to have a second shooter?
KM: Let’s say yes, for this exercise. (Editor’s Note: Rep1 said that assignment briefs frequently call for a second shooter for behind-the-scenes coverage. “And another pair of hands covering things,” Meenaghan added. Rep1 noted that a second shooter is considered an assistant, and whatever he or she shoots on set belongs to the primary photographer.)

Rep1: The specs say, “Please also include the price per additional image to retouch to print standards, and to web-only standards.” That’s tough to estimate. It depends on what needs to be done. If we just do basic retouching, it’s just clean up.
KM: [Retouching] for web-only use [ie, on the inset images] is just clean-up. It’s usually in the range of a couple hundred bucks an image. For the print standard [ie, retouching the main visual], estimate a decent amount, because you get creative directors who want to retouch everything.

I would put in a number with your retoucher of choice that covers three full rounds, plus a final tweak, and err on the side of being more in-depth. If we assume it’s only one image getting that treatment, I want it to be able to be buffed out as much as [the art director] wants. [Another] solution is to have your retoucher of choice submit his estimate to me directly. So that whole conversation is between us and the retoucher.

Rep1: That’s a good idea, but I’ve had art buyers say, “It always has to be on one estimate.” They won’t do separate purchase orders. There’s prop styling. Do you think we need a food stylist?
KM: Yes, because [food is] something so core to the product.

Rep1: I see the client is going to provide the knives, but in terms of pots and pans and all that, are we looking for premium with all of that?
KM: Yes. Ideally you find a location with all of that stuff already there, but it’s another one of those caught-with-your-pants down moments if we don’t have that budgeted. If we end up casting a chef, and they have their beloved cast iron skillet, that would be amazing, but we should proceed as if we have to do it from scratch.

Rep1: You have pretty specific notes about the house, and the furniture and whatnot. I feel like because of that, I should be putting in a pretty good amount for prop stylist with a prop truck.
KM: I agree. This is another rabbit hole of mistakes. You assume that you’re going to find a location that has everything you need. You put in a nice location fee, you [look at] affluent places, and invariably, somebody—creative, clients—has fallen in love with [a comp image], or whatever they’ve been looking at, and you’re replicating it. You end up with an expensive location, and you’ve taken everything out of it that is there to begin with, so you can replace it with your own stuff [to replicate someone’s vision]. And you could have done it on a two-wall set. It’s a ludicrous waste of money, but it happens all the time. And that all means going in using a prop truck.

Pre-estimate call with Rep2

Rep2: What’s happening with insets and hero image?
Karen Meenaghan: The hero image would be a very classic portrait of a person standing in their own kitchen. The implication is that it’s a real chef, and this is the knife they choose to use at home in their own kitchen. We shoot a double-page spread horizontal, and shoot to accommodate page versions, by cropping or whatever. But we also love the idea of shooting through the action of cooking and preparing and serving the family as a potential to either replace the main visual, as something better, or to be inset shots that we are going to provide to the client as a little mini library for other uses, mostly web.

Rep2: Will this be all in one location?
KM: Yes. It would be awesome to find a location with an open plan kitchen/dining area, but the priority has to be the kitchen. It really needs to have the [right] kitchen appliances in there. We can’t really get into swapping out appliances. It would be amazing if they have cookware and cooking stuff there that we can utilize, but I will say we should be budgeting to do that part of propping from scratch if need be.

Rep2: Where are we shooting this? In Los Angeles?
KM: Assume that it’s local to your photographer. You’re asking that because of location fees?

Rep2: Yeah. If we were in Texas, we’d get a much cheaper house than if we’re in LA.
KM: Let’s assume it’s in LA.

Rep2: OK, and we’ll make sure our photographer is local so there’s no travel cost.
KM: Yeah.

Rep2: And we’ll have wardrobe, styling, props—all of that. Will the client be supplying the knives?
KM: The client is supplying a range of knives, knife blocks, maybe even some cutting boards, but everything else, we should be ready to get, and I feel like we should supplement cutting boards, so we know we’ve got it. And you see the note about our bringing in our own butcher block island? Just in case the room we fall in love with doesn’t have that in position, we want it.

Rep2: There is a mention of video. Is that BTS [behind-the-scenes], or a little motion for web and social media use?
KM: That’s a little up in the air, and right now, the priority is to get the capture while we’re there. What we’ve done with this client in the past is document what’s happening on the set, like kind of BTS, except not. Like, if [the chef-talent] is chopping [for still photos] it’s nice to get the same thing in video, without seeing the crew and the lights. And I would bring someone who is set up with the potential to do an interview. We would like to have the chef talk about how he uses this knife at home. So your video needs to include sound. We’ll work out a schedule [for shooting] true b-roll stuff: ingredients on the counter, [a shot] out the window, things to pick up to put in between [talking head] shots during the interview.

Rep2: How many days are you envisioning [for the entire production]?
KM: One day.

Rep2: Do you want us to include overtime then? Twelve-hour days?
KM: Plan for whatever it’s going to take to get this done in one long day. And I want to make sure that it’s a fully-compliant bid. So including crew payroll, talent payment at end-of-day, all that good stuff.

Rep2: Do you want us to use a talent company to pay the talent, or will you guys just estimate it?
KM: Let’s assume for this estimate that you’re going to do it.

Rep2: We have specs on the talent, but can you break that out in a little more detail? We have one hero chef, we have two adults.
KM: My desire is that we find a real chef if we can, and if possible, the family comes with them. So we’re not putting any hard age limits on [the talent]. If it ends up that we’re casting a family, the ages would be [such] that you see that the children are [the chef’s], without it being high maintenance [because] they’re little.

Rep2: And we want a minimum of two children?
KM: Yeah, and I think that three people sitting there waiting to be served [chef’s partner or spouse and two children] is ideal.

Rep2: Do they have a style of home [in mind]? Should it be a modern kitchen, with all the bells and whistles?
KM: The creative vision for this would be that it’s a real chef who’s kind of cool, and their home environment is equally cool. Given that it’s going to be a sourced location, it’ll probably be bigger and fancier than it would in real life just so we have room to shoot. But the decor is meant to be reflective of a creative professional—somebody who has lovely, individualistic taste. That’s really more about furnishings, so I would be prepared to prop that if need be, because [finding a location with just the right styling is] a long shot. The priority should be some place with the best kitchen. It should have really good appliances that a chef would have at home.

And as far as propping the kitchen, we should probably be prepared to prop from scratch.

Rep2: If there are any name brands, are you guys going to get releases [to use them] or are we going to retouch them out?
KM: We’re going to have to not see any name brands.

Rep2: Do you need a food stylist, and someone to prep and get all the food, or are we going to have the chef do it?
KM: Yes, I think it’s better to have a food stylist.

Rep2: As far as usage, it’s pretty well written out. You’d like to have unlimited worldwide all-media use for the hero shot, and for the inset images, you just want online/digital.
KM: That’s correct.

Evaluating the Estimates

“There’s a big value in seeing the different ways that jobs are interpreted” by the photographers who bid on them, Meenaghan observes. Sometimes estimates are nearly identical, she says, “And sometimes there are surprises.”

Our volunteer reps took two different approaches, and ended up with drastically different bottom line estimates: $155,053 versus $100,636. Rep1 took a no-expenses-spared approach. She discussed a draft of her estimate with Meenaghan, and cut several thousand dollars from the bottom line before submitting her final estimate.

Rep2 prepared her estimate to come in at a competitive price. Unlike Rep1, she didn’t run a draft past Meenaghan before submitting it. During a post-estimate conference call, Meenaghan told Rep2 that several line items were too low. “In theory, we would do another round with this estimate and it would probably come up 20 or 30 grand” on the bottom line, she said. Afterwards, Rep2 submitted a revised estimate of $123,866.

Rep2 explained that she made several estimating mistakes because she prepared her estimate in a hurry, without input she would normally seek from a producer after the pre-estimate call. Rep2 also acknowledged that she overlooked some details Meenaghan spelled out during the pre-estimate call.

Often, art buyers review estimates with reps (and photographers) to spot such mistakes and make revisions before creatives and clients see the final estimates. “I know how to make sure we’re getting what we need from the estimate without dealing with overages right away,” says Meenaghan, referring to the agreements clients are asked to sign during production, to provide more money for line items that were underestimated.

Meenaghan has learned from long experience that there’s often a gap between what clients say they’re willing to pay, and the actual costs of their expectations. “It’s beer budgets and champagne tastes,” she says, “no matter how many times I say: ‘Do you realize your choices are going to be limited [because the budget is too small]?’ Everybody says, ‘Sure, sure.’” Then they see the actual consequences of cost-cutting and, Meenaghan says, “Everyone turns to me like I let them down somehow. And my saying, ‘I told you so,’ is not helpful at that moment.” So her job, she explains, is to anticipate the clients’ expectations and massage the estimates accordingly.

But she also says that some agencies don’t allow art buyers to tell photographers (or their reps) that their estimates should be higher, even if the numbers seem too low. “If someone says, ‘I can get this job done for these numbers,’” agencies often take them at their word, Meenaghan explains. And a low estimate “suddenly becomes everybody’s favorite estimate” if a client is insisting on a low-cost production.

Meenaghan’s task wasn’t to look at the bids and decide who she would hire for this mock job. That decision comes down to many factors besides cost, not the least of which is the impression photographers make with their creative treatments. Instead, Meenaghan explained in conference calls with both of our volunteer reps how ad agencies and clients might respond to their estimates.

 

Click on image to download PDF.

Rep1’s estimate: $155,053

Rep1 describes the job as “high-maintenance” a shoot “as you could possibly have.” It involves multiple talent, a premium location, large furniture and a prop truck, wardrobe and stylists. A draft version of the estimate came in at $139,084, not including the $21,500 in photographer fees. Meenaghan cut that earlier version slightly by eliminating some crew days, cutting equipment rental, and reducing overall video costs from $9,000 to $6,000.

Meenaghan says this final version of Rep1’s estimate provides “what you need to do the job 100 percent thoroughly” in Los Angeles, New York or San Francisco, where most big productions are shot.

She noted that she loses confidence in photographers who significantly underestimate expenses. “If they’re going to give me a low bid just to get the job, I’m going to have trouble at every turn” because the production won’t run smoothly and the photography won’t meet the client’s expectations. “It’s going to be a bad experience for everyone involved,” she warns.

Looking at Estimate 1, though, Meenaghan said, “I’m never that fortunate to have this much [money].” Often, she explains, she’s working with a fixed budget “that’s inadequate.” Also, cost consultants now force cuts on nearly every accepted bid, she notes. “They’ll get us to take 10 or 15 percent out of [the budget], because they get paid by the amount they save, and it’s always the amount you end up putting back” in the form of overages during production. “Everybody’s doing their best to make an estimate that’s as lean as possible.”

“All [cost-cutting] does is pit photographers against each other and lower the quality of production,” Rep1 asserted. When estimates are too lean, she says, photographers can end up losing money because clients can hold them to the low numbers and refuse to pay overages. Rep1 tries to solve the problem by adding caveats to the estimate (in writing) that make unpredictable costs the responsibility of the ad agency. And she adds, “We have to be willing to walk away, and we do.”

Rep1 said she “sometimes” gets budgets as big as the one she proposed in her final estimate, if the media buy is big enough. But her discussion with Meenaghan about Estimate 1 quickly focused on ways to cut down from $155,053.

“If the client said, ‘We need to cut this,’ I could maybe cut it 20 or 30 grand at the most. But I would say: no large furniture, limited options for locations, a very different [ie, lower] level of talent, and a lot of other caveats. It would be compromised,” Rep1 said.

Meenaghan said, “Right off the bat we’d cut the talent rate.” That’s an easy way to satisfy the demand for cuts without jeopardizing the entire production, she explains. But it is important to tell the client—in writing, Rep1 emphasizes—that cutting the allotment for talent will compromise production values. In fact, when the client asks you to cut the bottom line by any amount, Rep1 advises, “You say, ‘OK, but we’re going to have a different level of talent, location [choice], and no prop truck because it will be just small props.’ You put that in an email to be very clear.”

Meenaghan added that when the brief calls for “premium” production but the client doesn’t want to pay premium prices, “you have to go through this exercise where you’re making the cuts and calling out very boldly that these aren’t premium numbers anymore, so: Heads up. We may run into a problem.”

Rep1 said video production would be one of the first things she would cut completely. That would save $6,000. She’d also cut retouching entirely, which would take $8,500 off the bottom line. “That [expense] could go through the ad agency,” she said. Meenaghan confirmed that agencies are sometimes willing to create separate budgets for post-production, when fixed budgets threaten the quality of production.

Rep1 went on to say that location fees might also be cut to $4,500. But she hastened to add that the client wouldn’t get the Malibu pad they imagine, with a gorgeous kitchen, view and light. “They’re going to get [something in] Century City instead.”

Meenaghan said cutting the allotment for the location almost always leads to an overage expense, because clients are invariably disappointed by the cost-saving options they’re left with.

Rep1 also explained the things she would avoid cutting. For instance, she would fight to keep her “high-end producer” (7 days, at $1,200 per day) because the production is big, with many moving parts. “I’d feel less comfortable having someone young and hungry [producing] it than someone more seasoned,” she said.

Rep1 also said she would avoid cutting fees because the client is getting unrestricted usage on a lot of images—21 in all. Then Rep1 added she might cut the photographer’s fee, but that she would walk away before cutting it below $15,000. Meenaghan said Rep1’s fee for the job, which requires a lot of shots in one day, “is in the standard range for lifestyle” advertising.

Click on image to download PDF.

Rep2’s Estimate: $100,636

As mentioned, Meenaghan’s overall assessment was that this estimate should increase to $120,000 to $130,000 because Rep2’s estimates for several important line items were too low. “There’s a [bottom line] amount that’s to the bone, and there’s an amount that allows you some wiggle room for bumps in the road,” Meenaghan says. “Most jobs have one little bump in the
road somewhere.”

The strengths: Meenaghan praised Estimate2 for a number of strengths. “The numbers are really good for retouching,” she says. “When I say [in the job specifications] ‘hero images with at least three rounds of retouching,’ I’m expecting a very thorough, anal art director, and a lot of back-and-forth and noodling with the retouching. So many people say, ‘I can do my own retouching, I can keep that number low.’ Really?”

Because many photographers insist on doing their own retouching, the costs of retouching have dropped, Meenaghan says. But she explains, “My comfort level for retouching a main execution print ad is never going to go below $3,500.” If a retouching studio gives her an estimate for $2,000 after she’s warned them about a demanding art director, she asks the retoucher to spell out the terms of the job in writing “because I can’t afford to have a retoucher say [later on], ‘This is so much work. We have to triple our fee.’”

Rep2 estimated $5,000 to retouch one hero image, but only $3,500 for subsequent images that the client might also want to use in print advertising. Rep2 explained that retouching additional images to print standards will be more efficient, because the retoucher will have learned from the first image what the art director’s retouching expectations are.

Meenaghan also had high praise for the “Usage upgrade options” in Estimate2: $1,500 per additional print-quality image, and $500 per additional web-quality image. “That’s the kind of quote ad agencies love, because it keeps the subject [of re-use and additional image use] open. If [the re-use numbers are] really high, it tends to close the door,” she said.

She also praised the breakdown of the photographer’s fees, so line items include prep days, tech scout days, and post production days, in addition to the shoot [creative] fee. The breakdown, coupled with the fees for “usage upgrade options,” leaves room for negotiation. Meenaghan explained: “If the agency says, ‘We don’t need another image [in addition to the hero image] as much as we’d like the client to sign off on [Rep2’s photographer]. So could you make sure the fees don’t become a discussion point, or make sure they’re as close as you can [to what other photographers are bidding]? At which point I would go back to Rep2 and she might say, ‘OK, I’m going to drop two of those prep days, but I’m raising the rate for an additional image.’ And I’d be like, ‘Fine.’”

Rep2 responded, “I try to balance our fees between day rate and usage. If there’s any way to have pre-negotiated options [for additional usage], that helps bring the day rate down, because they might come back for more images….I like to look at the entire package, and use the fees for leverage, but I never like to leverage the shoot fee. I look to leverage the [photographer’s] scout or the prep or the post fees. That way, we don’t damage the rate expectation as much.” (In other words, the agency doesn’t come to expect her photographers to cut their creative fees to make an estimate more attractive.)

Meenaghan also praised some of the terms that Rep2 spelled out at the top of her estimate. Under terms and conditions, Rep2 says the costs are estimated, and subject to change with written notice to the client. “I love that one, and I totally agree,” Meenaghan says. She added, “I love that she’s added overtime. I find nothing more irritating than when people turn in an estimate that says everything’s for an eight-hour day, then says somewhere that it’s going to take ten hours, but they haven’t added in the overtime fee. It’s like a gotcha waiting to happen.”

Rep2 estimated for two hours of overtime for the entire crew. “Our estimate is based on a 10-hour day, but Karen asked for 12 hours,” she explained.

Regarding Rep2’s terms for a 75 percent advance of production expenses, and 100 percent of talent costs, Meenaghan says, “That’s a solid, standard amount.” She and Rep2 discussed the difficulty of getting many agencies to agree to advance for expenses. “This year, I’ve had two clients say, ‘We don’t give advances,’” Rep2 said. The question at that point is whether or not to risk a cash flow crisis—which can bankrupt your business—by taking the job without any advance. “I have photographers [to whom] I say, ‘You cannot do this,’ and others who can” because their finances are more solid. “But it sets a horrible standard,” Rep2 said.

With regard to Rep2’s terms for cancellation and postponements, Meenaghan said it’s fair to reimburse photographers for expenses incurred prior to a shoot that is cancelled. But payment of fees would be subject to a time limit, such as cancellation with less than 72 hours’ notice. “We’d have to haggle” on a case-by-case basis, Meenaghan says.

The weaknesses: Meenaghan objected strenuously to what she considered insufficient workers’ compensation coverage spelled out in Estimate 2. At the top, under “Insurance,” the estimate says production insurance is non-negotiable and that it “is based on a $1 million policy for 3rd party property damage, additional insured, hired/non-hired auto, as well as worker’s compensation.”

Meenaghan doubted that everyone on set was sufficiently covered by that policy. She explained that years ago, producers started paying talent through payroll companies to ensure that their taxes and workers’ comp insurance premiums were properly paid. Now, everyone on set is paid through payroll companies—or they should be, Meenaghan says—for the same reason: to make sure everyone is covered, and the client, ad agency, and photographer aren’t at risk of liability if someone gets injured on the job.

Rep2 listed $1,863 for payroll taxes for the photographers’ crew. “The number is very low. I would expect to see [payroll expenses] for everybody,” including stylists, wardrobe stylists, and all their assistants, Meenaghan said. Rep2 countered that those crew members are vendors, and therefore take care of their own workers’ comp insurance. “I guess that is a gray area,” she said.

“We don’t leave it gray anymore,” Meenaghan asserted. Just because stylists are incorporated, or represented by an agent, doesn’t mean they have the coverage, she explained. “You need to show me that everyone [is covered] by workers’ comp insurance, and who it’s coming from.” Otherwise, the payroll line item had to go higher.