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How much a typical promo video costs?

The typical animated promo video costs anywhere from $3K to $10K a minute.
$3K will get you a very simple animated promo video as it will barely cover the costs of producing the script, storyboard, voiceover and hiring an animator.

A good animator charges between $300 to $500 a day. If the animation is very simple a good animator can produce about one minute of content a week. At $400 a day that is $2K just to animate a simple project not counting any revisions.

Many of the people that approach Grumo to have a demo video produced cannot afford a $5K video or they think it is too expensive. I think charging even $5K per minute is actually low considering the amount of work that goes into producing a high quality animation.

Even at the $10K per minute end of the scale, a promo video is orders of magnitude cheaper than a typical similar TV ad produced by a large studio.

Large studios charge anywhere from $100K to $400K or more to produce a 30 second TV ad.
Even at $100K that is about $3,000 per second of video compared to $170 per second for a one minute $10K promo video.
The difference is a whopping 18 times cheaper!
Again that is considering a cheap TV ad versus an expensive animated promo video.
So in reality the difference is usually 30 to 50 times less in price for a typical 1 minute demo video than for a 30 sec commercial.

I think value is a matter of perception so If the studio can make it client perceive their work is worth 20 times more and the customer is willing to believe it, so be it!

The question is. Do you really believe that any of the videos produced by Grumo Media or similar studio provide 20 times less value than a typical 30 sec TV ad?
Of course not. In fact, we get told all the time that some of our demo videos are way more entertaining and fun to watch than their expensive TV counterparts.

So why this big difference in price?
I think there are two main reasons to explain this huge difference in pricing.
They are momentum and resources.

Momentum. Until very recently the equipment to produce any kind of video, live action or animated was tremendous.
So for years the costs of producing professional ads were justified to a certain degree.

This has changed dramatically recently with the advent of new technologies. To the extent where one person with a laptop and a couple of software programs can create astonishing CG imagery that rivals reality.

The advertising industry is now still living on a thin sheet ice of momentum that is bound to break very soon.
As soon as clients start noticing that small studios can produce similar or even higher quality commercials for a fraction of the cost, big studios are going to have to radically change their pricing approach in order to stay competitive and remain afloat.

Resources. Bigger studios employ a very large amount of resources towards the production of an ad.
The smallest team assigned to a simple project will have 3 or 4 full time people working on it for 2 or more weeks.
They will have a creative director, illustrator, and animator at least. Then they may subcontract voiceover, sound design, color correction and tape recording.
On top of that they have to cover all their office expenses and rent.
Given all the added costs even charging $100K or more per ad some times they have trouble turning out a profit..

This is about to change. It may take sometime for larger corporations with long lasting relationships to catch on.
But the there is a new slew of startups coming that cannot afford the big dollar ads and guess whose door will be knocking on for their company promo video.

At Grumo Media we are experts at creating outstanding promo videos at very reasonable cost.
The trick is very simple, there is no office, teams are 2 or 3 at maximum and everyone works remotely with their own equipment.

On a $10K on minute ad this is how a typical budget would look like:

# Task Description Hours Cost Amount
1 Project brief 4 $60.00 $240.00
2 Script creation 15 $60.00 $900.00
3 Illustrations 24 $60.00 $1,440.00
4 Animation 60 $60.00 $3,600.00
5 Video rendering 5 $30.00 $150.00
6 Voice over 4 $60.00 $240.00
7 Sound effects 4 $60.00 $240.00
8 Sound track selection 4 $60.00 $240.00
9 Stock images 1 $100.00 $100.00
10 Sound rights 1 $100.00 $100.00
11 Video Editing 8 $60.00 $480.00
12 Script revisions 8 $60.00 $480.00
13 Illustration revisions 8 $60.00 $480.00
14 Voice over revisions 4 $60.00 $240.00
15 Final edit revisions 4 $60.00 $240.00
16 Meetings/Phone Calls/emails 12 $60.00 $720.00
17 Video compression 4 $30.00 $120.00
18 Video upload and delivery 4 $30.00 $120.00
TOTAL: $10,130.00

As it can be seen, a $10K video allows for certain amount of revision work which ensures the final product can meet the clients highest expectations.
When you try to cut corners and undercut your producer be aware that less time will be allocated to refining and the end product and quality will suffer accordingly.

All these costs are rough estimates. Hourly rates can vary considerably between animators. Stock images can get very expensive as well as sound track rights. Professional voiceover can add a lot to a budget if the voice over artist is famous.

I hope now you have a better idea of how much a typical promo video costs and why getting an awesome one minute video produced by Grumo Media is a smoking deal!


Related Articles:
Why Grumo demo videos costs so much
Why every website needs a great explanatory video
Step by step guide to produce a promo video
Get a demo video produced by Grumo Media
Learn to create your own awesome demo video

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  • Pingback: How much does it cost for an animated video (e.g. common craft) for instructions on how to use a website? - Quora()

  • http://maloki.se maloki

    and the first thing that popsinto my head is.. Why don’t you have Flattr? ;)

    Really good interesting and informational post. A lot of times people get blinded by what they think they can and can’t afford.

  • Anonymous

    Unbelievably good article – Honest and gets right to the numbers in detail. How many would do this? Answer = not many. But you justify so well. By the By – loved the Andrew Warner interview….keep going….keep going!

    • http://grumomedia.com Miguel Hernandez

      Thanks for reading this and watching the Mixergy interview, I am glad you liked it.

  • London Lyric

    Thanks for the article Miguel. Now I know that I have been getting cheated out of a lot of money for 8 years now. This is a much read for all of us animators.This article woke me up. Thanks so much bro=)

    ~L.L=)=)=)

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  • http://www.facebook.com/sunbash Sunbash Adesegun Sun-Basorun

    Terrific Post good sir. This is much needed information for new startups or even very established business people that have never paid much attention to new media. Now if only someone would create the same industry standard breakdown for producing grumo grade mockups/screenshots of a wireframed UI…

  • Pingback: Web Design: What should I expect in terms of cost for website and explainer video? - Quora()

  • Carlos Correia

    Great article i agree some projects way be done in this line of costs nut…

    I think you left some itens out, the asset creation, chars sets, vfx quantity… this can make the minute go to a lot higher costs. and the ability to make major changes in the fly, big structures have this ability due to the ammount of human and teck resources available, let’s not forget some changes mean starting the project almost from the begining again. 

  • http://twitter.com/petachon Peter Chon

    Thanks for the great read. I definitely agree on all of your reasoning – unfortunately most people think having access to the equipment automatically qualifies them as a “professional.”

    The sentence I dread the most is “Well, my nephew is pretty good at drawing…”

    • http://twitter.com/grumomedia Grumo Media

      That’s true, hopefully you can check their portfolio first and verify if the “professional” claim is true!

  • http://www.donaldson-group.com/ carmine morra

    Hey Miggy,
    I’m working through your training. Got it from appsumo. Really awesome stuff. I’m on the east coast in CT. I can’t find anybody who will work at the rates you quote here. Not sure when you posted it but the rates for talent in CT are double (even triple) these. Additionally, I plan to sell this very type thingy out here. (you’re ok w/that right?) I’m actually going to tell folks “The Grumo way is how we do it, check out the grumomedia site bla bla…” Of course they could hire you and that’s their prerogative. But if they get to this page I’m up fudge creek, can’t compete.

    • http://twitter.com/grumomedia Grumo Media

      So happy you are enjoying the Grumo course!
      By all means Carmine, I love to hear our work inspire others to do similar stuff and I hope you can be very successful selling your own grumos ;)

  • http://www.kasradesign.com Kasra Design

    This is absolutely correct.  Thanks for this brilliant article. 

    • http://grumomedia.com Miguel Hernandez

      My pleasure

  • Social web designer

    Love your video on appsummo!

    • http://grumomedia.com Miguel Hernandez

      Thanks!

  • http://twitter.com/joey89924 joey

    it will barely cover the costs of producing the script, storyboard, voiceover and hiring an animator.
    TLP181

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  • StudioMultimédia Gon’Interacti

    Well written. we hope more and more potential client will understand that.

  • Nish Capio

    Hello ,

    We are a Creative agency, Capio Interactive. We would like to
    know if anyone is interested in doing an Animated explanatory video
    to explain your products/ services.

    Have a look at our work here and if
    interested please let us know. https://www.youtube.com/watch?v=TbNQnopvFAk&list=UURnnCOI1QHVzVId5kW9EcAg

  • adeeb

    Good article. appreciate.

  • http://www.blenderpassion.com Mark LaBarr

    Hey, I’ve been doing explainer videos for a while, and it would be a great pleasure if you could take a look at one of mine and give me an estimate on how you would price it. I finished in two weeks, and took another week for revisions. (Even though I didn’t make the script and voice-over, please factor that in)