ANA – Best Practices For Managing TV Talent Payments.

At the Association of National Advertisers (ANA) annual Advertising Financial Management conference, held in Miami, FL, the ANA’s Production Management Committee discussed their collaborative summary of best practices for managing television talent payment. The committee recognized a need to develop a comprehensive analysis of best practices for advertisers to help formalize this process, maximize marketing efficiency and drive ROI.

Nearly $800 million per year is spent for domestic talent in television commercials and yet for many advertisers, talent payments are often an overlooked area of their overall marketing budgets. Big advertisers can spend upwards of $10 million annually for talent used in television commercials, but many do not have formal guidelines in place to help structure the process and the smaller and mid-sized advertisers are even less likely to have formal processes in place. In addition, advertisers generally delegate authority for managing budgets for talent payments to their advertising agencies further complicating the process.

“Identifying guidelines for managing TV talent payments is another necessary cog in the wheel for improving marketing accountability,” said Bob Liodice, President and CEO of the ANA. “The ANA Production Management Committee has done an excellent job in stepping up and developing a set of principles that advertisers can use when sitting down with their advertising agencies and production consultants.”

The analysis covers areas including: pre-production, casting, post-production and celebrity talent. A brief summary of the guidelines developed by the committee includes:

Consider centralizing the responsibility for talent to have a resource for expertise that takes advantage of learnings and best practices

Have a formal holding fee notification system in place with your agencies or talent payment companies
Set budgets and monitor spending for talent payments

Be aware of the talent re-use cost of a commercial before production is authorized

Consider obtaining options for Internet and/or non-broadcast/industrial rights upfront

Consider obtaining options for print, radio, point-of-sale, etc. upfront

Develop storyboards for versions that are direct lifts of the original commercial rather than alternate versions to reduce costs

Have detailed casting specs developed and approved in advance

Carefully evaluate and confirm the talent classifications for principal status or extra status before finalizing the commercial

Examine media activity and consider how media might be scheduled to maximize talent payment efficiencies

Celebrity talent contracts should include periodic payments, instead of an upfront lump sum, suspension of such payments in the event of a strike or other disaster, and the appropriate options – subsequent years, additional regions/territories, Internet, non-broadcast/ industrial rights, etc.

Overall, areas that can make the biggest impact on talent payment costs and savings are certain “fundamentals,” casting, the media schedule, and celebrity talent

To view study CLICK below (Adobe Acrobat Reader required):

http://www.ana.net/pdf/AprilANATalentPaymentsBestPractices.pdf