The average cost to produce a 30-second national TV commercial in 1999 was $343,000, a 16 percent increase, according to the annual survey just released by the American Association of Advertising Agencies.
The highest prior increase was the 12 percent boost reported for 1991. This translates to an increase of $48,000 over the $295,000 figure for 1998. While costs are not yet in for 2000, they are likely to be higher.
The news comes as some automotive marketing executives are questioning the effectiveness of TV ads. Costs and clutter are problems, according to Bud Liebler, DaimlerChrysler's senior vice president for global brand marketing.
'The total number of commercial minutes per hour of television seems to be increasing,' Liebler said. 'Actually, the same thing is happening with ad pages in print. Daytime TV has more commercials. In some instances, 30-second ads are being squeezed into 27 seconds.'
According to the survey, added costs came from longer shooting schedules and higher directors' fees. The number of hours used for studio shoots rose 13 percent, while the hours for location shoots increased by 5 percent.
The average national spot shot in a studio took 13 hours, compared with 16 hours when shot on location, according the survey. When both studio and location shooting was required, the average length was 20 hours.
Other increases in the average commercial cost came from significant growth in post-production costs, which went from $200,000 to $235,000. Directors' fees for a 30-second spot were up 16 percent. The cost to edit and finish a spot rose 26 percent to $43,000; sound recording and mixing increased 23 percent; and music costs were up a whopping 35 percent.
The American Association of Advertising Agencies survey was compiled by participants from 20 agencies, including the top 10 U.S. agencies by annual gross income, and 15 of the top 20.