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November 2019
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  • The Facilities 50
    Jon Creamer launches Televisual's 32nd exclusive annual Facilities 50 survey featuring the top post production houses in the UK and 48 pages of analysis of the sector
  • Aim High
    10 page special report on production at the high end. We take a look at what’s new in colour management, pre visualisation, aerial filming, full frame shooting, the role of the DIT, working with Dolby Atmos, choosing the right codec, booking studios and
  • Drama: Genre Report
    As the streaming revolution gathers pace, with Apple TV+ and Disney+ now entering the SVOD fray, Tim Dams reports on the drama strategies of traditional broadcasters in an increasingly competitive market
  • Live Sport: Technology
    Live sports and events coverage, always on the cutting edge of innovation, is being transformed by new technology from remote production to 5G and immersive sound. Michael Burns reports
  • The Art of the Grade
    The grade provides a consistent ‘look’ to a drama, but a great grade can enhance mood, focus and narrative flow. Jon Creamer asks the experts behind Paddington, Ad Astra, Bohemian Rhapsody, Fleabag and more how it’s done
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surveys

The Commercials 30 2018 Back to Reports & survey Listing

It’s been a year of highs and lows for commercials producers. The traditional stresses have not gone away but more and more companies are finding new outlets for their talent

In last year’s survey, we found that commercials production companies had experienced a “volatile” year that had mirrored the volatility of the year before. And guess what? This year we’re getting the same feedback. Another twelve months of ups and downs.

There are lots of positive noises though. Aardman, for example, says, “the commercials industry continues to see highs and lows but overall there does seem to be a more optimistic feeling since the middle part of the year.” Archer’s Mark reports that “it feels like business picked up again this year and we saw an upturn in revenue, an increased number of briefs, all at a consistent budget level.” Biscuit Filmworks says it is on track to have its “best year ever in the UK both in the number of productions and creatively.” Independent states that “despite the changing landscape, the larger brands remain committed to producing excellent work with budgets that remain healthy.” 

But despite the upsides, it’s been a bumpy ride, say most. Rattling Stick says that things have been “volatile, unpredictable and uncertain” but even with that “it’s not all doom and gloom as many exciting new opportunities start to present themselves.” Blink says 2018 has been a “very good year so far in terms of business and creativity, better than 2017 overall. However, the burst of production that started the year has not sustained.” Bold echoes that feeling saying that it was the “same old story, really busy and then not. Crazy until just before the World Cup, then totally dead. Was everyone one in Adland really watching the World Cup solidly through June and July?” Park Pictures reports that “the first few months of the year were slow. It picked up in the summer and has been buoyant ever since.” Nice Shirt too says, “it’s been very, very strange!” with revisions to scripts up until the last minute and jobs being pulled at the eleventh hour [something reported by many]. “The climate does not feel stable at all. However, business has been coming in and it seems busier again.”

The Big Break
The volatile nature of the sector, and the chopping and changing from clients and agencies is at least partly fuelled by Brexit fears. Many production companies, unsurprisingly, say Brexit uncertainty is therefore a big concern. Dark Energy reports that “Brexit uncertainty is reducing budgets and stemming the flow of scripts.” With no concrete sign of whether a good deal with the EU will be reached, all businesses in the UK are holding their breath. The ”lack of visibility for small businesses, so close to this major economic event, is the thing that causes us most sleepless nights,” says Archer’s Mark. “We live in hope,” says Blink, attempting to look on the bright side.

Priced Out
Brexit or no Brexit, one thing that has remained stable is the trend to expect commercials production companies to deliver more for less. 1st Avenue Machine talks of “tight budgets and the same expectations as the big budgets.” Rogue says that the market for commercials production is “harder than ever. Converting jobs from a financial and procurement perspective has been a huge challenge given the decline of budgets vs the creative ambition.” ITN Productions says it has “noticed a considerable reduction in budgets while clients expect more for their money - high production values and multiple deliverables to be used across social media.” And Bang too reports that “margins are being squeezed in every area – we produced 12% more this year and made around the same.”

Along with having to deliver more for less, many commercials production companies are reporting an increase in the trend towards jobs being won on price alone, with creativity taking a back seat. Blink says, “we are moving to a world where procurement will make the decisions based on price, which will come at the expense of creativity. Price based decisions will not take the approach and ideas into consideration.” A lack of understanding by clients that different approaches cost different amounts causes problems. Caviar says that “in some cases we have been cost controlled on jobs with a revenue of less than £100K which just feels like insanity. It’s frustrating that even when we are budgeting at bare bones a cost controller will try and find fault.” And with agencies increasingly desperate to hang on to clients, those agencies are less likely to fight for a creative vision. “One of the main challenges is keeping up a level of creative integrity in the face of massive client control,” says Nice Shirt.

The Land Grab
Another issue that’s unlikely to go away for commercials production companies is the growing trend for agencies set up their own internal production outfits to hang on to an even greater degree of the campaign spend. Much of the work they’re hanging on to is at the lower end of the food chain, but that work is vital for nourishing young directors, says Iconoclast. “These outfits are now producing the work which historically a traditional production company would have used to build their talents’ reel. It is strangling the emerging (signed) talent pool.” Animation house Picasso says it’s navigating “the landscape of in-house production companies, managing their needs and their limited budgets, whilst not undermining the value of the full spec commercial work commissioned by their parent company.”

And it’s not just agencies gunning for that production work. In this issue, we also detail the UK’s top post houses, many of who now have their own production wings. As Knucklehead says: “post houses openly competing with their clients for production work is an everyday factor now. It increasingly feels like the advertising production industry is undergoing a land grab for territory.”

New Horizons
The old rules and the old roles no longer seem to apply. But commercials production companies are savvy to these shifting sands too. Each year we ask the respondents to the survey what percentage of their work is direct to client, rather than through agencies. That figure climbs each time. It was 14.6% last year, 18% this year. Lots of respondents are now reporting they are increasingly bypassing the agency model. Iconoclast says that “some clients are becoming more adventurous. They are looking to produce amazing work, more leanly. So they’re looking outside of the traditional ad agency model, which is an interesting space for commercial producers.” Rattling Stick says “with brands increasingly turning their backs on traditional agency structures and opening themselves up to production companies, there are fresh opportunities aplenty.” Hunky Dory too says that it is “engaging with clients and marketing departments to offer one stop shop solutions. We have to make bread with clients and brands direct and not rely solely on the traditional agency/production company approach.”

Commercials production companies are branching out into lots of new areas too. Outsider says that it is “further diversifying the type of work we make. Becoming makers of original content and branded entertainment.” As Stink says: “You need to make sure you’re not over reliant on one area of your business” and many have taken that on board. The Sweet Shop says it is “developing beyond our core business of commercial advertising, expanding our offering - music videos and music tours, feature films, screen development, passion projects, TV shows, books, photography, developing long-form scripts.” Somesuch reports that “last year we had two editorial feature length docs in production, and this year they are finished and due to be released soon. We are also continuing to develop our slate with two feature films, a TV show and several episodic projects.” As Blink says: “Advertising is changing but not going anywhere. It’ll get tougher and tougher, but the strong will survive.”

The stats
£13.1m - The average turnover of a commercials production company in this year’s survey (it was £13.4m last year)

£183k - The average budget for a 30-second ad reported by respondents (that’s up from £172k last year)

32% Of respondents said that budgets had fallen this year. 11% said they’d risen and 57% said they’d stayed the same

41% Of production companies said they made more commercials this year, 30% said they made fewer and 29% said the same

Outside The Box

What are you making outside of TV/Cinema ads?

Aardman
Venturing into 4d cinema experiences, new VR and AR content and computer games.

BISCUIT
Co-producing Watership Down with the BBC and Netflix. Instagram and Facebook specific content.

GREAT GUNS
Docs, branded, experiential, promos, game cinematics, feature length doc, art installations, shorts.

ICONOCLAST
Content for platforms like Boiler Room’s 4:3, Nowness; doc series; features; webisodic; shorts; print

INDEPENDENT
Kidspiration –  (kidspiration.tv) An online factual channel for kids.

NEXUS STUDIO
AR apps, Instagram filters, digital art installations, event based installations, title sequences, shorts, animated tutorials (Headspace)

NICE SHIRT
Like everyone we are making more online brand films that are longer and more story based.

KNUCKLEHEAD
Music videos, short films, long form documentaries and a feature film.

PULSE FILMS
Gangs of London for Sky Atlantic, Cinemax and HBO. Forthcoming projects include: XY Chelsea and new scripted series Atomic Bazaar helmed by Gregory Burke

RIFF RAFF
A feature doc Our Most Brilliant Friends, and a Bear called Yako which helps kids communicate better with their parents.

SOMESUCH
Web series content, traditional short films that will premiere at the likes of the London Film Festival, feature length documentaries and web content of all lengths and sizes.

Creative trends
What have been the major creative trends of the past year?

2AM
“An increase in integrated campaigns - TVC, content and stills - all being shot concurrently for really the cost of TVC alone.”

76 LTD
“Lots of hi-speed shooting on the Phantom camera, as well as doc work with real people/celebrities.”

ANOTHER FILM co
“More briefs specifically targeted for social platforms, requiring delivery formats of 1:1 (square) and 9:16 (vertical). We created our first ‘vertical only’ campaign.”

BANG TV
“Clients demanding a wider panoply of skills (photo production and post knowledge to re-format work for social media formats).”

BLINK
Advertisers are not going forward with big budget TV, and instead are looking to spread the money across many different platforms.

BOLD
“Comedy with both big and small budgets. The trend towards more visual scripts and fairly traditional storytelling appears to be holding.”

DARK ENERGY
“Clients demanding more versions and different formats for different advertising platforms.”

FAT LEMON
“Casting/diversity is still big.”

HUNGRY MAN
“An awful lot of observed doc type films – clients want reality and honesty and emotion and with this a doc approach.”

ITN PRODUCTION
“Authentic storytelling highlighting real people, real causes.”

OUTSIDER
“Some amazing work with full format cinema cameras and older lenses.. And drones continue to be an amazing asset.”
PARK PiCtureS
“‘Disruption’ is the most overused word and comes up in most, conversations alongside an ‘influencer’. Peak millennial?”

RADICAL MEDIA
“Clients are demanding more and more additional content pieces.”

RATTLING STICK
“We’ve noticed the word ‘craft’ being seen more as a negative: automatically assumed to be expensive and old school.“

ROGUE
“Longer-format ideas have gained traction at the expense of TVC’s.”

SKUNK
“There are more prominent female directors than ever before.”

STINK
“Clients are returning to performance and storytelling as the best way to engage an audience.”


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