How much does a commercial film cost? A complete guide to film production budget

Determining the cost of a commercial is not a simple question with a standard answer. The price depends on several factors directly linked to your company's specific communication needs. In this guide, we explain how you can calculate a suitable budget for your film production by focusing on purpose, goals, and expected return.

The most common question: 'How much does it cost?'

One of the most common questions we receive is: 'How much does it cost to produce a film?' This is a completely legitimate question, but the answer is always the same - 'It depends on...'

There are so many factors that affect the cost of film production that we risk scaring away the person asking if we start listing all cost items. Interestingly, it is often the case that the person asking the question already has the answer, but doesn't realize it yet.

The real answer lies with you

When someone who has never ordered a film before contacts us and asks about the cost, our answer 'only you know' may seem strange. But what we are actually trying to find out is: 'How much should the film cost?' or 'What is your budget?'

Many think then: 'Budget? I know nothing about film!' But the fact is that the budget should be based on the film's value to your company, not on production costs per se.

Film as a communication solution

As video has become increasingly popular and accessible, enormous amounts of film are produced every year. Not so long ago, many companies ordered film simply because 'everyone else has films'.

But if you stop and think about what you are actually ordering, you will likely come to a different conclusion. We dare say that in 95% of cases, our customers are not ordering a film - they are ordering a solution to a communication need.

What is a communication need?

A communication need can be simplified as reaching out with a message to a target audience via a communication channel. For us as film producers to help you with this, we need a 'brief'.

The importance of a brief for film production

A brief is a document that describes your communication need. The brief's structure and content can vary, but two points that should always be included are 'Purpose' and 'Goals'.

Purpose - the answer to the question 'Why'

The purpose explains why you need to communicate this. Some common purposes can be:

• Increase our sales

• Inform our staff

• Strengthen our brand

Goals - concrete and measurable results

For the purpose not to be too vague, you also need to set one or more goals with the communication. When setting goals, you can use the SMART model, which means that the goal should be:

• Specific

• Measurable

• Accepted

• Realistic

• Time-bound

Examples of SMART goals:

1. Increase our online product sales by 15% before Christmas

2. Generate a 30% increase in visitors to our website next year

3. Shorten the onboarding process for new employees by 2 days in the fall

How much should the film cost?

When you have clarified the purpose and goals, the next question is: How much is it worth for your company or organization to achieve these goals? This is the core of the question of how much a film should cost.

Calculate the film's value with ROI

It can feel difficult to convert a communication need into a monetary value, but without some form of calculation, you risk being left in uncertainty. All price quotes you receive will then just be empty numbers without context.

Return On Investment (ROI) is a calculation method to determine whether an investment is good or bad. Your investment in communication should be defensible, so set an expected profit against a hypothetical investment sum.

• For marketing communication, you want a high ROI - the communication should generate profit through increased sales

• For internal communication, the value is often often links to efficiency, reduced costs, or improved working environment

• This explains why it often feels more motivated to allocate a larger budget to a commercial than to a film that will only be shown internally.

Factors that affect the cost of film production

If you have followed the reasoning so far, you should now have come to the conclusion:

A purpose with your communication

• A measurable goal

• An investment sum - how much the film should cost

• But we are not quite done yet. The question is how the investment sum should be distributed.

Distribution costs

Depending on the purpose and goals, the film will need to be distributed in different ways:

• For sales purposes, you often need to count on paid exposure (YouTube, Facebook, TV)

• For internal information, you may have no distribution costs at all if the film is only placed on the intranet

Internal costs

Other items that should be included are your own efforts:

• How much time will you spend on the project?

• Do you need to engage colleagues in the production?

Try to compile all additional costs beyond the actual film production.

Calculate the film production budget

Now we have arrived at the answer that many thought they didn't have when they contacted us:

Film production budget = Investment sum - (distribution costs + internal costs)

With information about purpose, goals, and budget, we as film producers can give you the best solution based on our experience. You don't need to know everything about film to order one - it usually suffices that you have come to a purpose, goals, and budget.

Next steps in the film production process

This was a basic overview of how you can reason to arrive at a budget for your production. To give us the best possible conditions, we may need to look at more aspects such as target audience, message, and challenges, but that is a topic for future articles.

Article written by Karl-Johan Strandberg, Multiproduktion

• How much does a commercial cost in Sweden?

  The cost of a commercial in Sweden varies depending on several factors. There is no standard price because each production is unique and based on your company's specific communication needs, desired quality level, and scope. To calculate a suitable budget, you should start from the film's purpose, goals, and expected return (ROI).

• How do you calculate the budget for film production?

  To calculate the budget for film production, you should first define the purpose and goals of the film. Use the SMART model to set measurable goals. Then, calculate the film's expected value to the company (ROI). The film production budget becomes your total investment sum minus distribution costs and internal costs.

• What is included in a film brief?

  A film brief is a document that describes your communication need. It should always include purpose (why you need to communicate) and goals (what you want to achieve). The brief's structure can vary, but for the best results, it should also include information about the target audience, message, and any challenges.

• How do you set SMART goals for a commercial?

  To set SMART goals for a commercial, the goals should be Specific, Measurable, Accepted, Realistic, and Time-bound. Examples of SMART goals can be: 'Increase online product sales by 15% before Christmas', 'Generate 30% more visitors to the website next year', or 'Shorten the onboarding process for new employees by 2 days'.

• How do you calculate ROI on a commercial?

  To calculate ROI (Return On Investment) on a commercial, you need to set the expected profit against the investment sum. For marketing communication, it is about profit through increased sales. For internal communication, the value can instead be about efficiency, reduced costs, or improved working environment. A higher ROI indicates a more profitable investment.