In an advertising bind!

[Caspita]

So i have run into a dilemma in my business plan. I just picked up a big time client who will remain anonymous. Anyways, i will be doing photography, advertising, and marketing for this client. I know a lot has to do with location, that being said I am located in South Florida..Miami to be exact. Just about all of the photography I do will be solely for advertising purposes. The ads will run in magazines ranging from Dupont Registry to Mens Health.

I understand when charging from my work i need to take everything into account, from what my overhead is, to how many hours of work went into it, to how many magazines it will be run in, to how long my photos/ads will be used for. I have another meeting with the client at the end of the week to get the answers to the some of the latter.

I find myself running into a predicament over numerous points. Should I be charging for the actual photo shoots, or should i just be charging more money for the ads that have my photos in them(99% of the photos i take will be used solely for advertising purposes). If I charge for the photo shoot, should the price of the ad with my photos be more expensive then the ads i create without my photos?

Now the main question that runs through my head...should i be charging a one time fee, or is it completely unreasonable to expect some sort of royalties every time my ad is used? And Lastly, assuming each ad takes about 5 hours to design how do i actually go about figuring out a price for the ads? How much of a price difference,if any, should there be if the client runs one ad in 5 magazines as opposed to that one ad in 1 magazine?

I apologize if any of this seems like a rant, believe me when I say I have done my fair share of research. In my mind I have answers and ideas to most of these questions, but I would definitely like to hear what others have to say.

Thank you for your time and cooperation,
Casp.

[tim]

IMHO you should charge for your time no matter what you're doing, and you should also charge license fees for images you create.

[hommedars]

OK, I am confused. How could you "pick up a big time client" without working out the contractual details for the job?

In the situation you describe, it sounds like you are acting as an ad agency rather than a photographer. In that case, the photography used becomes secondary to the process.

You and the client must agree on how you are going to be compensated; by the job, by the ad, or on an hourly basis. And you can only charge the amount and in the manner that the client is willing to pay.

Certainly the client has a budget for this project. Do you know what it is? Why not ask?

[Caspita]

OK, I am confused. How could you "pick up a big time client" without working out the contractual details for the job?

In the situation you describe, it sounds like you are acting as an ad agency rather than a photographer. In that case, the photography used becomes secondary to the process.

You and the client must agree on how you are going to be compensated; by the job, by the ad, or on an hourly basis. And you can only charge the amount and in the manner that the client is willing to pay.

Certainly the client has a budget for this project. Do you know what it is? Why not ask?

The contractual details will be discussed at the end of this week. We will be discussing salaries and budgets and anything else. I do not want to walk into the meeting without having an idea of how much to charge. For example, as you stated, if charging by the ad would I charge $500 and expect royalties every time it is used. Or should i just charge $800 for unlimited use.

[Mark1]

I would charge a session fee. If it is a repeat customer that you will shoot for repeatedly, I would make it just enough to cover your shooting expenses, Take the profit from the use of the images. This way your shooting sessions are cheep to them, but they dont cost you anything either. Its up to you whether you want to worry about keeping track to get proper royalties. ( remember you are not paid to do this part) Or just charge more and let them go. That said, I have no problems with selling my rights with the images.

[Caspita]

I would charge a session fee. If it is a repeat customer that you will shoot for repeatedly, I would make it just enough to cover your shooting expenses, Take the profit from the use of the images. This way your shooting sessions are cheep to them, but they dont cost you anything either. Its up to you whether you want to worry about keeping track to get proper royalties. ( remember you are not paid to do this part) Or just charge more and let them go. That said, I have no problems with selling my rights with the images.

Theoretically speaking, if all goes as planned at the meeting, I will be in charge of putting the ads in the magazines every month.

When you say session, do you mean I should just charge one fee that would include the photo shoot and ads for that month?

[hommedars]

The contractual details will be discussed at the end of this week. We will be discussing salaries and budgets and anything else. I do not want to walk into the meeting without having an idea of how much to charge. For example, as you stated, if charging by the ad would I charge $500 and expect royalties every time it is used. Or should i just charge $800 for unlimited use.

It really depends on what their experience is in the past. If they are used to royalties and usage fees, that would generally get you a more equitable return.

But a lot of businesses, especially these days, are all about controlling costs, and not running into hidden costs and variable pricing. In that regard, the client will most likely be more comfortable with fixed-price unlimited-use ad pricing.

Of course, if it ends up being a salaried position, then none of that matters because all of your work, including photographs, is the property of the employer.

Perhaps the biggest question you need to answer is "will this job consume 100% of your time for the next x months. If so, you will want to look at a reasonable annual salary return and then make the specifics of the deal meet that goal.

Just a few thoughts.

[Mark1]

When you say session, do you mean I should just charge one fee that would include the photo shoot and ads for that month?

I mean, charge each time they want you to take a new shot. Say, they like to update the image in the ad each month. Well, unless you shoot all 12 images at one session, they get charged each time you set up to shoot. I am assumeing they are providing the concepts that you are shooting. If it takes them a month to come up with the next idea. It will take all year to shoot the images. That equals 12 sessions = 12 session fees. If they are this regular of a customer, I would make the charge just enough to cover what it costs you to get the image.

What they do with the image is a whole other charge.

So basicaly you are getting 2 payments for the same image. 1 to take the shot, 1 for them to use it. For me, a regular customer will pay the same price to shoot each image. But what they pay for use, will vary with what they plan to use it for.

[PhotosGuy]

If they are this regular of a customer, I would make the charge just enough to cover what it costs you to get the image. I disagree with that, but it depends on whether you intend to make a living at this or not. Anytime you cut your prices for one customer, the others find out about it & that becomes your "normal rate"?

For a regular good customer in a budget bind on a job that might only take two-three hours total, including planning, set-up, & shooting, I might offer a 1/2 day rate. 20 years ago that was $350 for 5 hours, my door back to my door.
Usage rights were extra.

[Mark1]

I disagree with that, but it depends on whether you intend to make a living at this or not. Anytime you cut your prices for one customer, the others find out about it & that becomes your "normal rate"?



That only happens if YOU want it to be your new rate. I have no problem telling them no. Especially if the other customers are not the same volume. But this customer looks to be paying them for 1 taking the image. 2 creating the ad. 3 buying the ad space. Plus other stuff im sure. I have no problem cutting my price to shoot. As you mentioned, its the smallest charge. And in truth is not that much cheaper than normal. Sellling the image is another charge.

I guess another way to do it is the 1 charge. One price goes from capture to print. But then again do you charge it by the month if they update? Or 1 charge for the year?

Id love to know the situation better and relationship you have with the client. It would be a lot easier to nail this down.

[breal101]

I work with a lot of agencies, they don't talk a lot about how they charge but one way is to charge a percentage of the placement cost plus production cost.

[amfoto1]

Okay, I think there's still some confusion here.

You are being asked to simply make photographs for their use in ads, right? I would seriously doubt that they are asking you to both photograph and design/produce their ads, plus make the media buy and handle the ad traffic for them. From your post, it just doesn't sound like you have the expertise for this.

I would be willing to bet your only role will be to take the photographs they need. If they are any kind of major player, they will have an agency to handle the creative, production, media buying and ad placement. They might even have separate agencies handling different aspects of this. Or, they might have in-house departments that deal with some of the details. It would be extremely unusual for them to expect a photographer to handle all of this... I can't think of a single one who has the expertise or is anywhere close to set up to do all aspects of an ad campaign from start to finish.

It's possible the ads would come through you, for you to add the photos to on their way to the media. But even that would be unusual. Most agencies and clients want to see what's been produced in final form before it ever appears in print!

The normal pricing model for just the photographer in this sort of (very typical) arrangement is two part:

One is the fee for the shoot. Here you can calculate it various ways, but most photogs seem to charge a day rate or something like that. If there's post-production work involved, that's usually at an hourly rate that's somewhat less than the day rate.

Second part is licensing the images. For that reason you have to avoid "work for hire" clauses in the shooting agreement, so that you retain copyright to all the photos.

In this second part they select the images they want to use from the shoot(s) and then you license the usage that's planned at this time. There are a number of factors that effect your pricing, such as exclusivity, total press run, size of ad, multi-image packaging and right to reuse the image for a certain period of time.

Royalties would be very unusual pricing model to apply here. They are more normally used with posters or coffee mugs, and are used to transfer some of the risk back onto the photographer that their work will sell well. Royalties can be a good deal, or not. I'd steer clear of them in this case to make it a much cleaner sale.

You really, really need to become familiar with pricing models, and how these are traditionally done, as well as terminology and licensing terms. Look for books on Amazon.com and all the info you can find on the Internet and take a cram course. Believe me, the people sitting across the table from you at the meeting will know the terminology and licensing/pricing models, if they have any experience at all.

Try to delay any real commitment to price until the meeting after this upcoming one, to give yourself some time to learn and think about it. You have a good excuse to not give them a price on the spot. In this first meeting you should be asking tons of questions to help you build a quote. You can't really state any prices, other than prehaps your standard day rate, until much, much more is known about how long it will take to do the shoots, if any additional equipment or support services will be needed, then how the images will be used and the exact terms they require, etc. etc.

This is just the start of a negotiation. Don't be surprised if they ask for one extreme, such as full assignment of copyright of all images. It's only a starting point and it's up to you to instruct them why that's not the best deal for them and that they can get what they need with more moderate terms that are more favorable to you, too. In other words, you'll need to negotiate back to somewhere in the middle, to terms everyone can live with.

You will probably be negotiating with their ad agency, perhaps a creative person or designer from the agency and probably some buyer, and there may be others involved as well... Such as the marketing person from the client. There may be others, as well, depending upon what's being shot.

It never hurts to ask if they have a rough budget in mind for your part of the project. The worst they can say is nothing is determined yet, leaving you to try to come up with numbers on your own. You might get a clue as to how much, though, and that can help you flesh out your quote.

Personally I would not short change myself on either part of the pricing model. Be sure to build some profit into the shoot, as well as the licensing. There are many, many ad campaigns that have ground to a screeching halt without ever appearing in print, and if this happened here and you priced the shoot at cost in order to win the business, you wouldn't see any profit at all.

[sfaust]

I had a longer reply typed up, but it Command W by mistake. On a Mac, that spells Gonzo :(

Suffice it to say, ditto what Alan said. I'll add more after dinner if I don't get tied up. You should have a creative fee, licensing, and production costs summaries on your estimate. That's how the industry works in advertising.

A good book to pickup before you attend this meeting would be Advertising Photography by Lou Lesko. It will answer your questions, and prepare you for the meeting. Fed Ex it overnight from Amazon if you need to. It will be worth it.

[LBaldwin]

I have a friend that has recently gotten a gig like that for a major SV company. He went in another totally different way. Instead of creative fees, hours etc, he became a contract employee. The contract is for 1 year with options, and a budget for gear and transport!! It will be a 100k per year contract, and they will share copyright. The company gets it for the first 3 years exclusive, he gets them after that, and best of all expenses are paid by the client. I think that this a unique way of selling yourself, providing a great level of income and still maintain independence for other gigs...

[Kellis2038]

here is a pricing website, that was developed by John Harrington, he is the author of "Bast Business Practices for Photographers"

http://www.johnharrington.com/dc-photographer-pricing/index.shtml

[Mark1]

I have a friend that has recently gotten a gig like that for a major SV company. He went in another totally different way. Instead of creative fees, hours etc, he became a contract employee. The contract is for 1 year with options, and a budget for gear and transport!! It will be a 100k per year contract, and they will share copyright. The company gets it for the first 3 years exclusive, he gets them after that, and best of all expenses are paid by the client. I think that this a unique way of selling yourself, providing a great level of income and still maintain independence for other gigs...

This is a nitch I am going to try to fill where I am. There are only wedding/ portrait photographers here. And I have zero interest in weddings, and will do portrait only as favors to clients. I am going to try to get contract work. I have started image subscriptions as something similar. For like webmasters and such. They have no idea what they will need each week/month. But I can provide them as they need them for a monthly charge.

[LBaldwin]

I like to see new ways of working without gouging the shooter, giving up all rights and getting underpaid for loads of work and I think this may just fit the bill.