Answered: How much should I budget for video production?

how-much-should-I budget-for-video-production

It’s Monday morning, and your budget is due this Thursday. And in the budget is one pesky line item: video production. Your boss is requesting for you to provide an estimate for video production for the year. And you just don’t know where to start. How much should I budget for video production, you ask yourself. How much does it cost to produce 1 minute of video? Or further, how much does it cost to produce a 3-minute video? How much do I need to pay the corporate video production team, and how much should I budget for the social media content team? Pesky questions that can leave you feeling frustrated and confused.

Brand managers know that there are few creative assets that perform as well as video in brand advertising and market. There are countless statistics that support the use of video, for example:

  • By the conclusion of 2023, the average individual dedicated approximately 1 hour and 40 minutes each day to consuming online video content, translating to 100 minutes per day. This marked a notable 19% surge from the corresponding period in 2021.
  • Instagram Reels exhibit a striking capability to engage a broader audience, reaching nearly 9 times more accounts, even those with up to 500 followers, compared to images within similarly sized accounts, which typically only reach around 77% of their audience.
    To put it into perspective, a reel posted by an account of 500 followers may easily reach 4500 accounts, whilst an image is likely to reach only 400 accounts.
  • Viewers tend to engage substantially with interactive video content, consuming at least 90% of the video’s duration on average, showcasing a high level of sustained interest and participation.
  • An overwhelming majority, approximately 90%, of the most successful YouTube videos strategically incorporate segments of a target keyword within their titles, highlighting the significant impact of keyword optimization on video performance and discoverability.

But even with the knowledge that video is indeed a powerful asset, marketers admit that they are not doing enough to use video. In a research done by Statista, marketers admitted that:

  • 48% said they feel their organization wasn’t using existing video to its full potential.
  • 43% said lack of in-house skill (filming, editing, etc.) was another challenge.
  • And 40% said their biggest barrier to video marketing was the lack of a budget dedicated to creating videos, and about the same number said that they do not have a clear answer to the question “how much should I budget for video production ?”

So you are not alone. There are many managers out there asking the same question : how much should I budget for video production

In our own experience, sometimes it was not the lack of a budget that was the issue, but indeed, lack of knowledge on how much needs to be dedicated to creative videos. Here we help managers decipher how much to dedicate.  To determine how much to set aside as video production budget, you will need to determine the following :

  1. What is the purpose of the video?
  2. What medium will you be using to distribute the videos
  3. How much are you looking to get in return for the video(s)
  4. How much did you spend for video production services for same period prior, and what results did you get

What is the purpose of the video

Not all videos are created equal. Some videos are created to make the business look trustworthy, credible and be remembered for these qualities. This type would need to a beautiful video, likely higher cost. Imagery needs to create “sheen”, and so perhaps a professional video production services may be required.

Some videos are created to educated customers about the details of a product. For an example, the video may solely be focused on the fact that the coffee is cold-brewed, and hence the caffeine in it as lower percentage, and the customer may not suffer jitters compared to if they had consumed hot brewed coffee with higher caffeine content. This doesn’t need to be a high end nor expensive video; the facts can be relayed over a simple video shot by some of the team members in the office.

Some other videos may need to show the unboxing of a product, for example. Here, you likely will need content creators filming from their own homes. Here, the look needs to be more authentic, as opposed to high-end studio “sheen.” A simple smartphone with a ring light can be used, and good negotiation with the content creator may give you fair reasonable pricing.

As you can see the first step of determining how much to budget for video production has to do with finding out what type of video you need, and who is going to be creating it : a professional video production services team, internal employees, social media content creators ?

What medium will you be using to distribute the videos

If you are going to be creating a TV commercial, you likely will be spending six to eight figure amounts to buy media. Good rule of thumb is 20% – 30% of the lifetime spend of the campaign should be allocated to video production. Don’t budget $10,000 for video production and you are spending $3,000,000 on TV media buy. You want to look good when you are going on TV, common sense would dictate.

Similarly, there is no sense in spending hundreds of thousands of dollars for a video that will be placed once in a meeting with a regional retailer, for an example. Or for a video that will only live in an Instagram story that lasts 24 hours; it doesn’t make sense.

When it comes to social, you do want to be careful, the budget for an organic post may have to be a bit lower than one that is promoted. If you are paying to reach more accounts, let the rule of thumb guide you: 20% – 30% of your paid media budget should be allocated to video production services.

How much are you looking to get in return for the video(s)

There is the trusted adage of you get what you give. Small budget coupled with unplanned media distribution will get small, unplanned results. A clear goal of what you want in return, for example, sales target, or a specific percentage of audience growth, will provide a much easier path to get to what you should budget for video production.

Large, dramatic shifts in results will demand larger budgets for the video production services. The opposite is also true; smaller, slower results can be achieved with smaller budgets.

The answer to “how much should I budget for video production” is finding out how much did you spend for video production services for same period prior, and what results did you get

Review the prior budgets for previous video production services. You get what you pay for. Were you happy with the quality of video production and were you happy with the return on investments achieved from those assets and campaigns? If you were, then you may want to keep your budget the same, if not, and you are looking for improvements, then laying aside some additional budget may be advisable.

The answer to “how much should I budget for video production” is finding out how much did you spend for video production services for same period prior, and what results did you get