BBH plan fuels debate on price of production

Bartle Bogle Hegarty has launched into the debate on the cost of making commercials by piloting a radical scheme to cover production company costs.

Bartle Bogle Hegarty has launched into the debate on the cost of

making commercials by piloting a radical scheme to cover production

company costs.



The new system, called ’fixed bid - shared risk’ extends BBH’s policy of

transparency, as unveiled in May 1993. According to Tim Delaney, the

chairman of the Creative Directors Forum, it also taps into a move

started a year ago by the Forum. ’I’m delighted that agencies are taking

action on the forum’s initiative. I’m sure others will follow, ’ he

said.



Mark Collier, BBH’s head of agency production, commented: ’We’re

attempting to get more of a sense of partnership. Absolute trust can

only come from absolute transparency.’



The current fixed price estimate system, in force for 30 years, means

production companies benefit if the final production costs go under the

net estimate, but they bear the total financial risk if the costs go

over the net estimate.



BBH’s proposal is still based on a fixed estimate, plus mark-up or

production fees, but if the production costs go over the net estimate,

the client will be responsible for a percentage of the ’overage’.



If the costs go under the net estimate then the client will receive a

percentage of the savings. Typical breakdowns would be 80 per cent in

favour of the production company and 20 per cent to the client. All

invoices will be made available to the client at the end of the

production.



Production company heads greeted the move with interest but also some

scepticism. One commented: ’BBH is already exploiting the system by

buying well and offering showreel-building scripts. I would be very

surprised if anyone is making money out of BBH work.’



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