Pricing & Negotiating: Public Service Announcement

by Jess Dudley Wonderful Machine Producer

Public Service Announcements (PSAs) are advertisements intended to raise awareness of a topic and to change public attitudes (rather than sell a product), often advocating better health practices or safety. The typical patron of a PSA is a government agency or non-profit aimed at improving public welfare.

Recently, one of our photographers was asked to submit a cost estimate to produce some photographs for a PSA. Though the concept was simple and straight forward, the details were still a bit vague when the photographer contacted me for pricing help. Here’s what he knew:

  • He’d been contacted by the creative director of a mid-size East Coast ad agency.
  • The client was a large non-profit organization whose primary interest was in public education and health policy.
  • The PSA concept featured a close-up portrait of a woman in a light filled, airy environment. About half the frame was negative space for copy, and there was a “gritty” treatment layer overlaying the image.
  • The talent would be a real patient who had realized the benefits of the non-profit through improvements in health care practices.
  • The use was described as a PSA that will be distributed on the non-profit’s website, possibly in print publications and in the form of posters hung in airports and train stations.

After reviewing the details and discussing possible production approaches, the photographer and I developed a list of questions to ask the creative director and got the following responses:

Wonderful Machine: Would you like us to cast the talent or will the talent be provided?
Creative Director: We’ve already selected the talent and determined availability.

WM: The comp hints at more environment than a studio sweep, would a white daylight studio work as a background?
CD: We’re open to shooting at a daylight studio. We just don’t want flat seamless. We want some texture to the background. A window, horizon, clouds. Something to subtly break up the negative space.

WM: What duration of use will you need?
CD: 3 years.

WM: What is the geographic distribution?
CD: Southwestern United States.

WM: Do you have a budget in mind?
CD: Nothing set in stone, but we need to mind our “Ps and Qs.”

WM: We think this can be accomplished at a studio in a few hours, are you expecting to shoot for more than about half a day?
CD: We only have the talent for 3 hours in the early afternoon. So it will have to happen in half a day.

WM: Will anyone from the Agency and Client be attending the shoot?
CD: Yes. Two people from the agency and one from the client.

Although the PSA would be displayed like a typical commercial ad, it’s purpose was not to generate revenue, but rather to promote public awareness. So it’s not worth nearly as much as a regular ad shoot. Additionally, the concept was straight forward, the talent would be provided and the shoot wouldn’t take more than 6 hours including set-up and break down, which is a consideration. BlinkBid shows the fee for regional Collateral, Out Of Home and Print Use at 2800.00 – 4000.00/year. Additional years aren’t discounted in BlinkBid’s Bid Consultant. So for 3 years they price this use between 8400.00 and 12000.00. Also, there’s no specific selection for PSA use in BlinkBid. Corbis doesn’t provide regional pricing, only national. They price the OOH Use at 1170.00 for the first year, Print Use at 7815.00 and Collateral Use 2550.00. To extend the use to 3 years, Corbis multiplies each of those numbers by about 1.66 bringing the total for this use to 18,456.00. They also don’t have a specific selection for PSA use. Adjusting for regional rather than national use might bring it down to around $10k which is in line with BlinkBid. This is really the kind of project where the fee could be anything, depending on the cause and how the photographer felt about it. After discussing it with the photographer, we decided that we wanted to come in at about 1/2 of the normal advertising rate, so we settled on 4500.00 for the fee.

Since the lighting would consist entirely of natural light, the photographer only needed one assistant on set during the shoot. The digital tech would provide an extra set of hands to help load in, set up and break down. During the shoot, s/he would man the laptop, wrangle images and process galleries.

The photographer owned all of the equipment he needed for the shoot. He’d be using a camera body (@250.00/day), two fast lenses (2@75.00/day), and some miscellaneous items like a reflectors, flags, silks and stands (@200.00/day).

The photographer also had his own shooting space. He charges 500.00/day to rent the small studio which would be ideal for this shoot; white, with a couple nice big windows.

Since we were only shooting one subject from the shoulders up, we were comfortable working with a stylist capable of light wardrobe styling and hair & make-up. We budgeted a half day to buy 200.00 worth of wardrobe. We would ask the subject to bring some of her own clothes as well.

Since the crew and agency would be setting up for the shoot around lunchtime we included catering for the crew, talent, agency and client. Generally we’ll budget 35.00 per person for light breakfast and lunch but were able to trim it down to 25.00 per person since we wouldn’t be providing any breakfast.

Indexing is what that photographer likes to call it, but we normally call it Digital Capture and Delivery by Web Gallery for Editing.

Retouching hours to apply the gritty treatment layer to the image after basic processing.

Miles, parking, shipping, insurance and miscellaneous was pretty low since the shoot would take place at the photographer’s own studio.

Lastly, we made sure to clarify that the talent would be provided by the client or agency and that a 50% advance is required to initiate production. After attaching our standard terms and conditions we sent the estimate to the client.

Wouldn’t you know it, a budget materialized 10 minutes later.

WM: Just calling to follow-up on the estimate. Do you have any questions?
CD: What can we do to get this down to 7600.00?

WM: Right off the bat, one thing we might be able to do without is the additional wardrobe. Would you be comfortable relying entirely on the subject’s own wardrobe? (That would knock of 200.00 for the wardrobe and 325.00 for the stylist time.)
CD: Absolutely. I’ll ask her to bring a dozen tops.

WM: Are you comfortable reviewing images straight of the camera or do you need a separate display? (That would be 300.00 for a second assistant rather than 500.00 for a digital tech.)
CD: If it gets me closer to 7k, I’m cool with it.

WM: Aside from the licensing, there’s not much else than can be easily trimmed. Let me check in with the photographer to figure out a way to come shave off another 600.00.
CD: Great. Let me know what you can do. This is a hard 7600.00.

After contemplating the peculiar budget, we dialed down the use from 3 years to 30 months, reducing the fee and bottom line by an additional 500.00. The last hundred came out of the equipment rental line. Since he’d be using his own equipment he could bend a bit on the rates, particularly for the miscellaneous stands, reflectors, etc.

We submitted the revision, the creative director quickly approved it and the shoot went off without a hitch.

If you have any questions, or if you need help estimating or producing one of your projects, contact Wonderful Machine.

There Are 19 Comments On This Article.

  1. As always Wonderful Machine, great step by step.
    Time to put some of those questions and replays into my client negotiations.
    @Ellis, yeah I’m with you about not charging enough!

  2. Oh, I don’t know, guys. I think we’re all charging appropriately. Clients are just not paying it. The numbers are in line with what most of us would have presented, less the gear rental (I’ve never really understood this. Perhaps that is why I read post like this in awe.) There is tremendous pressure on pricing these days. At $7600, even the agency underestimated to the client what photography should have cost. In this case, the photographer still reduced their estimate by about 25%.

    To me, this is a case where the agency wanted to use this particular shooter and did not solicit bids from anyone else.

    Hats off to WM for another great negotiation exercise.

  3. Charging For or Renting gear that you OWN just feels wrong to me (at least when you put it on paper); I only get away with it in NYC or LA. Besides, don’t most photographers include that COST in their CODB – project fee/photography fee? MY clients seem to be AMAZED that I own my own equipment – especially my NEW video clients. “You own a Gib and Slider? We don’t have to rent from ________ – awesome.” Can’t tell you the number of NYC photogs that don’t own one camera body; that just seems – Wrong. My two cents.

  4. I wonder about charging for basic gear rental as well, and would like to hear a good explanation this practice. I can understand charging for specialized or extra gear for a big production… but charging for a camera, two lenses and some stands? Isn’t that like a mechanic charging for a wrench, or a carpenter charging for a hammer? Aren’t these the basic tools of the trade that should be factored into your CODB?

    • In NY and LA it’s standard practice to rent gear. Not only rent your gear to cover wear and tear plus replacement cost but to actually go rent everything and leave your shit at home. Based on previous comments on this topic it all depends on the client. Many regional clients will freak when presented with camera rental so you roll that into the fee.

      I think that this practice is a holdover from the days of markup and maybe it will disappear. Personally it’s been my experience that clients like to pay for physical things that go into making pictures because they feel they are hard costs and cannot be changed but when it comes to fees they have a harder time looking at a number that looks like it can be punched down.

      • General rule of thumb is the more corporate they are, the more line items the accountants like to see because it looks more legit than a vague (to them) “creative fee”.

        Any time a producer writes my bids it ends up with lots of line items for things like insurance, kit fees etc. Typically any time a producer is writing my bid, I’m working with an agency or large corporate client. It is not unusual to have to justify every line item to accounting afterward, especially when its the Big 3 of ad agencies that has strict internal auditing going on. If you told them that equipment cost is part of the creative fee, you would be asked to line item it, causing a delay in payment.

        On the editorial side of things, kit rental makes sense because most mags pay paltry day rates and one way to recoup costs is to make your own equipment an expense. Common practice.

        It’s a different deal with smaller clients who may not purchase much media, and therefore are suspicious of being ripped off by confusing (to them) fees. In that case, rolling such costs into a creative fee makes sense.

        • example: Last summer I did some work for mccann and made the mistake of lumping my drive time cost into a mileage fee. This cost several days of back and forth with accounting as they would only pay $.55 per mile and I had to break out the time component, and then get it all re-approved.

  5. Thanks, Jess. Great info here.

    Out of curiousity – when you lack certain info that the client isn’t forthcoming with (say detailed usage where you need to bill for all usage when that may or may not be the ‘real’ intended use), how often do you come in with a quote that is WAY over budget, and then are able to dial it back to the clients’ true need?

    Or stating my question slightly differently, are there situations where you come in vastly over budget so that it ‘shocks’ the client and leaves you out of the game? I’m not saying this happened in this scenario, as obviously it worked out very well. It is interesting how their budget magically materialized, but I liked how you guys took things out (wardrobe, usage terms) as opposed to just saying “Yes, okay, we can do it for that.” After all, it’s all give and take, right?

  6. Thanks for this real case study breakdown. If only more photographers, schools, organizations (AMSP, etc) would include such information in their workshops, more photographers would be charging what they’re worth and the mystery of pricing and negotiation would be eliminated.

  7. I have been following you for over 3 years, thanks for all your posts!
    This post is very helpful, and Its great education for younger guys like me.
    -David

  8. Charging a rental fee for gear you’ve already invested in serves several purposes:
    1. It keeps your client’s prepro costs down because you ‘hit the ground ready to shoot’, w/o having to build extra time into the budget to pick up/drop off rental gear (or add prepro time to customize the operation of, or to check out the proper operation of gear you’ve paid someone else to pick up for you).
    2. Using your own gear removes the uncertainty of missing components.
    3. It insures that the gear you use can be regularly updated in line w/ the advancement of technology, assuring your client the highest technical quality possible.
    4. Yours is gear you are intimately familiar with, and so every ounce of your on-set attention can be paid to the aesthetics, politics, courtesies, and all other complex demands of the day’s shooting schedule… and not on tech hiccups.
    5. All major-market agencies expect to be charged for gear rentals, and also expect the newest/best tools to be on hand for their needs.

    Unlike days of old, where a $10k investment bought a used Hassy body and 3 lenses you’d use forever more, in this evolving digital age you’ll be reinvesting 5x that amount every three years in dual bodies, newer computers, expanding RAID backup, and ever-evolving software just to survive at the (mid-level) front of the advertising market.

    By charging clients 1% retail value (as rental fee) of those tools you take for each shoot, you’ll be in-line with client expectations, and able to run a modern studio with all the needed amenities. If you don’t charge clients for the upfront investment you have made in the gear your client needs you to furnish for their project, your business is not going to grow in this modern age of constant reinvention.

    • Along those lines, one of the major changes in the greater imaging industry is that every camera (and flash, and remote trigger, and…) is now really a computer. Whether or not that computer’s software—the firmware—is up to date can make a break a shoot, and there’s a whole lotta rental house equipment that’s never seen a firmware update.

      Your equipment and your maintenance of the same is a value proposition for the client. By paying a pittance for the wear they’re causing and the benefit of your upkeep, they’re getting equipment you’re comfortable with, that’s going to work its best, and that’s going to make them and you look better in the eyes of the talent/agency/AD/end client/whatever.

  9. Wow! This is an excellent and timely read for me. I am about to go into negotiations for an up and coming music artist and knowing the importance of licensing is going to be invaluable.

    I also write for http://www.slrlounge.com, so I wrote a post to share this information to our readers: http://www.slrlounge.com/real-life-example-pricing-negotiating-a-commercial-job

    Thank you APhotoEditor and Wonderful Machine!!

    Regards,
    Joe Gunawan | fotosiamo.com

  10. The component that I didn’t include above is that we ALL have the same or similar ‘hard costs’ of necessary expenses on a shoot. So when it comes to negotiating w/ our potential client, after we’ve tightened those costs as far as possible (w/o diminishing the final quality of our production), the only place left is to begin tightening (reducing) our Fee.

    So if you’ve not included each of your ‘hard costs’ as separate line items in your detailed Estimate, then the very first thing you’ll be reducing (instead of the very last) will be your Fee.

    And there are already far too many CODB items covered by your Fee for you to then also lump your equipment purchases and upgrades on top (of your rent, utilities, health insurance, business insurance, advertising, accountant, phone, etc.).