July 2017

How Much Does An Explainer Video Cost? (Part 1)

(Part 1) Defining Classes of Explainer Video Cost

The term “explainer” video has been popularized as the Internet has become a playground for distributing video. Whereas commercials and infomercials have historically been very expensive, explainer videos have have become an affordable alternative. Still, my company’s clients and prospective clients ask about explainer video cost, more than any other topic in video production. Who can blame them? The range of costs can make video production feel overwhelming.

So in this 3 part series I will take a more holistic look explainer video cost. First, I’ll break down the classes, which are based on the types of providers in the space. Second, I will dive into the murky waters of hidden costs. I’ll show that what you end up saving in “production costs” can often come back in the form of future organizational challenges and costs. Armed with that information, you’ll be able to decide on the class that’s right for you. Finally, I’ll help you narrow down your budget with the class you’ve chosen. So let’s get down to explaining explainer video cost.

Breaking down the range

The folks at Demo Duck say that their research puts the range between $1,500 and $50,000. Alternatively, Video Brewery says the range is narrower ($5,000 and $10,000). Clayton Lainsbury from Crowd Content says he self-produced his video for $650. I could go on citing other sources, but for the sake of brevity let’s say that “according to the Internet”, an explainer video costs between somewhere below $1,000 and $50,000. That is a huge range to consider, if you’re new to procuring video production services. So how can you narrow it down?

Just like you can categorize cars by their class, we can objectively classify video production of explainer videos. It’s important to pick a “class” so that you can manage expectations and get bids from the right external partners. Let me outline 3 classes to help break down explainer video cost.

“Economy” Class (below $1,000 – $5,000)

First is a category we’ll refer to as the Economy class. It includes a couple options: 1. producing it yourself with the help of freelancers. 2. outsourcing to providers in another country. Though the exact range is debatable, based on my experience, you’ll find explainer videos in this category cost between a few hundred dollars, all the way up to $5,000.

Producing an explainer video yourself can be a good option if you are a start up and you are strapped for cash. However, be ready to invest a significant amount of time assembling a team. You’ll need to consider support for each phase of production (pre-production, production, and post-production). We actually built a platform (myproducer.io) to help onboard, budget for, and manage your team, since the processing can be daunting. So, check it out if you are planning on managing the production yourself.

One alternative to assembling a team is to hire a freelancer that has multiple skills in production. There are different titles for these folks. Videographers, Preditors, and Animators (the rare ones who both design and animate) are freelancers that act as a one-stop shop. The obvious benefit to hiring them is that they can save you time and money. After all, it’s one person who is wearing a bunch of different production hats. The thing to be aware of is that the best get booked up quickly. So, if you decide to go this route, consider discussing your timeline upfront and in detail.

Outsourcing is another option in the Economy Class. Websites like Upwork have popularized going this route. By creating an account and doing a simple job posting, you can have a laundry list of applicants that same day. The costs are also extremely enticing when you consider that some rates are as low as just a few dollars an hour. The drawbacks to outsourcing are likely obvious, but they’re worth mentioning. First, there is usually a substantial time difference coupled with the fact that you may never have a chance to meet your partner face-to-face. Second, there is often a cultural / language barrier that can be challenging to face. Consider that your explainer video is a communication vehicle. So, if you’re working with someone to polish that communication vehicle, and they speak a different language, you may have your work cut out for you.

“Full Size” Class (about $5,000 – about $15,000)

Next up is the “Full Size” class. This type of explainer video ranges from about $5,000 to about $15,000. The major difference between the Economy and Full Size classes is that the latter should provide you with end-to-end service. With the Economy class, you are often serving as your own project manager. You may have to chase down deliverables, proactively manage your timeline, and carefully monitor costs. Assuming you work with a reputable Full Size option, these project management elements should be handled for you.

Moreover, there should be an element of built in quality control. Partners that operate in the Full Size class are often small production companies or ad agencies. They spend time recruiting and hiring employees and contractors, generally only selecting the ones that are a fit for the company and the clients it works with. As a result, they usually have a team that is experienced in working together.

Working with partners in this class (and above) also provides a greater possibility of meeting your deadline(s). Since you are working with a team, there is greater flexibility for capacity issues that come up. Companies in this class are used to scaling up and scaling down, depending on how busy a particular month is. So chances are that if they take on your project, they won’t suddenly be under water. Look into their history. If they have a track record and have been in business for more than a few years, they have more than likely navigated the tricky resourcing challenges that come with taking on new clients.

“Luxury” Class (about $15,000 – $50,000)

Finally, we have the “Luxury” class. This class ranges from about $15,000 all the way up to $50,000. That being said, I’ve found it rare for many explainer videos to go above the $30,000 mark. After that point, the level of spend is enough to start considering producing a low-budget commercial. I’ll address commercial production costs at a later date. For now, just consider that commercials are a whole animal on their own. Most commercials start in the low 6 figures and ramp up to the millions of dollars for big brands. Can we say Superbowl spot?

The thing about the Luxury class is that it is only luxurious relative to the other classes. I don’t want to mislead anyone who is new to video into thinking that this is the point where you start to be able to afford sophisticated CGI (Computer Generated Imagery) or posh locations for filming. That happens with commercial budgets. Rather, in this class you start to have a little more latitude with what you can do creatively.

For example, if you are filming, you can start to consider options like booking a small studio or a location that isn’t took expensive (though controlling location costs can be a challenge in and of itself). And if you are doing animation, you start to be able to access better creative (e.g. more layers. more complicated design. more intricate animations). For example, when we created the intro of a video for a venture backed tech company, that intro had more than 120 different layers in the animation. It took more than 8 hours to animate this 5 second intro.

Bringing It Home

Choosing which class of explainer video to produce is a very much a personal decision. There are pro’s and con’s to each class. And really, there is no right or wrong answer. Some of it has to do with budget, some of it with timing, and some of it with organizational goals. Yet ultimately, choosing a class is a step in the right direction to establishing your explainer video cost. You’ll start engaging with partners that work well in your budget range, plus you’ll be able to better manage your expectations as well as the expectations of anyone else in the organization.

In the next part of this series, I’ll talk through some of the hidden costs of the Economy and Full Size classes. Armed with that knowledge, you’ll be able to make a decision on which class to pursue, and you’ll go in with eyes wide open.

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3 Steps to Making Video Part of Your Content Marketing

AAEAAQAAAAAAAAv9AAAAJGY3NGIzNDgzLWEwYzItNGYzMy1hZGFjLWNhMGQzYmQ4ZDg1YQBy 2019, content marketing budgets will have doubled what they currently are. And in a growing ocean of content, marketers are looking for ways to stand out. According to Hubspot, the top two channels that marketers are looking to add content to in the coming year are YouTube (48%) and Facebook Video (39%). However, video is still consistently seen as challenging to execute and expensive to scale. What should marketers do?

I’ve seen 4 responses to this challenge. 1. Wait 2. Look for cheap resources 3. Invest in a couple of videos 4. Invest for the long term

Which approach you decide to take is often a function of your risk tolerance. Yet, if you’re serious about content marketing, then the following steps will set you up for success, regardless of which path you decide to take. Even if you decide to wait, keeping these steps in mind will ensure that you are successful once you take the plunge.

1. Pick a Single Format and Stick To It

When you start exploring video, the creative juices begin flowing and it seems like everyone has a great idea about what to make. “We should do some interviews!” “Oh, what about animation?” “What if we did a sort of reality series?” The ideas all come from a good place. Colleagues are excited about something new and they want to contribute. At the same time, every idea requires time and resources to execute. And if you pick more than one format, you’ll be spreading yourself thin.

Consider that picking a single format allows you to get really good at it. Whether you are producing the video internally or working with outside partners, that narrow focus lets you hone the storytelling, the budget, the internal resource allocation, and more. As you create more, your content will actually get better.

In working with PK4 Media to develop more than 80 episodes of their series “Foodie Next Door”, we constantly learned and evolved the made-for-web show. That evolution was only possible because we had an agreed to format from Day 1. From there, we were able to make constant adjustments to improve the show. Here are a few (of the many) things that improved as we went along. 1. We went from filming in our talent’s kitchen to filming in a studio; with a limited impact to the budget. 2. We were able to lower our equipment rental cost (and even improve the quality of the equipment we were renting) by developing a predictable list of necessary items. 3. We reduced our time to edit each episode, which in turn allowed us to allocated the remaining resources to further improve the quality of the show through means like additional color correction, motion graphics and more.

2. Determine an Optimal Runtime For Each Video

If you are able to identify a format for your video, then it should be easier to figure out how much time it will take to tell you each story. However, don’t be tempted to haphazardly throw out a number that sounds nice.

Start by understanding how much content you can comfortably cover in a given amount of time. Marching Penguin typically uses word count as a key benchmark in creating content for clients. Generally speaking, you can consider 75 words for 30 seconds of content, 150 words for 60 seconds of content, and so on. Of course, the format and the pacing will have some impact on your ultimate runtime. Yet don’t get tempted into thinking that you can hack these numbers. Unless you are willing to speed up someone’s audio to the extent that they sound like a chipmunk, it’s going to be very challenging to put more than 150 words into a 60 second video.

Now word count only tells you how much can go into the “container”. You still need to determine the size of your “container”. So once you have a reference point based on word count, you can start to think about runtime based on the actual needs of your audience. Factor in who you are talking to, the complexity of the topics you’ll be addressing, and the depth to which you will go to address them.

Also, bear in mind that if you are truly making content, and not promotional material, the nature of your copywriting is going to be different. Content is expository. It is meant to educate, provoke thought, and get into the details. As a result, it takes time to get into a topic when you’re creating content.

Here’s an example I use to illustrate the point with my clients. If you are a company that sells a kitchen appliance, making a 30 second video about that appliance’s features is straightforward. You can quickly list the features in a promotional fashion, without a lot of detail. Now, imagine that you are making a recipe video (where your appliance is featured at some point). Well, 30 seconds is barely going to get you past the first step of the recipe. In fact, if you consider BuzzFeed’s popular Tasty videos (which most of us find in our Facebook feeds), the average runtime is about 2 minutes. And if you’ve seen those videos, you know they actually speed up a lot of parts just to get to 2 minutes.

3. Batch Produce Your Videos

Budgeting in production is far from straightforward. Many costs are based on day rates (e.g. studio rental or crew). Other costs can be based on hourly rates (e.g. editor, though often can be compensated on a day or week rate). And in the case of equipment, you can even consider purchasing outright.

As a result, I always try to structure budgets and project plans to maximize the output for my clients. In other words, if I’m renting a studio for a day, I’m going to try and film for the entire day. I know that sounds straightforward, but there’s often a misconception that there is a sliding scale for many of these costs. There can be, to a degree, but it’s highly unlikely that a studio will rent to you for a couple hours and that the crew will agree to partial day rates.

So instead, given your format and runtime (if you’ve done your homework above), work out how many episodes or videos you can realistically capture in one day. The answer may come by way of part art and part science. Plus, you should leave some room for margin of error the first time around. Yet ultimately, by having a mindset of batch production, you’ll truly get the most out of your budget.

Bring It Home

I say it consistently. Video is hard, but it doesn’t always have to be. By taking the time to plan upfront, you can start to build a scalable strategy for incorporating video into your content marketing. And as you start to build your audience and obtain success from your efforts, adding to your video library will create a flywheel effect.

And if you are still skeptical, know that I’ve seen companies with fewer than 20 employees master this approach, while some Fortune 500 companies have failed. In the end, it’s not about scarcity of resources. That is always an issue, no matter how big you get. It’s about finding a consistent method of collecting value from the resources you do have. Good luck!