How Much to Charge for Creating a Commercial for YouTube: Professional Tips and Considerations

Creating a commercial for YouTube is an exciting project that can help businesses reach new audiences. However, determining the right price to charge for such a service can be challenging. Here, we will explore the different pricing strategies and considerations to ensure you get fairly compensated for your work.

Understanding the Pricing Strategies

When it comes to pricing your services, there are three primary approaches you can take. Each has its own advantages and disadvantages, and choosing the right one will depend on your experience, the nature of the project, and the client's requirements.

Your Time

The hourly rate is a common way to charge for commercial video creation. A standard rate is approximately $150 per hour, plus a markup on any expenses incurred. Marking up 15% on all expenses ensures you cover your costs and earn a fair profit. This approach is particularly useful if you are a freelancer with a broad range of skills and experience.

Per Job

Per job pricing involves finding the going rate for this type of project and charging accordingly. This method is favored by clients because it provides a fixed cost, eliminating the risk of a variable cost. However, it's essential to avoid the "all-you-can-eat" trap. Make sure the price is for a defined job. If the client wants to extend the scope of the project, you can reprice the job to reflect the additional work required.

Based on the Client's Budget

The third approach is to base your pricing on the client's budget. Generally, companies should allocate around 3% of their turnover to marketing, or 7% when rebranding or launching in a new market. For example, a company with a $1 million turnover should budget around $30,000 for marketing. A company with a $1 billion turnover should budget around $30 million. As a freelancer, you are more likely to work with smaller companies, so a $1 million turnover might be a more realistic range for you. If the client has a specific budget, you can negotiate the price based on their financial constraints and the importance of the ad to their overall marketing strategy.

Ensuring Fair Compensation

No matter which pricing strategy you choose, it's crucial to agreed upon terms and payments before starting the project. Never start work without confirming the price and any other details in writing. This helps protect both you and the client from misunderstandings and legal issues.

Additionally, it's wise to confirm in writing that the copyright remains yours if you haven't made this explicit in your agreement. This ensures you retain the rights to the commercial, even if it's used by the client on YouTube or elsewhere.

What Happens If Terms Are Not Agreed Upon?

If you've made the video without agreeing on terms beforehand, consider doing the work for free. Any figure you pick will be the wrong figure. Make sure to write a clear agreement that specifies that the copyright remains with you.

Even if the client likes the video, treat it as a sample and avoid creating the impression of a low-rate. This can harm your professional brand and reputation in the long run.

Lessons from Personal Experience

When I was running a business, I found that one of my most profitable clients was an organization that had breached my copyright by using my bespoke graphics from another organization. Initially, I intended to pursue them, but instead, I had a conversation with them. To my surprise, they hired me again the next year, and the following year, and the year after that. Eventually, they spent more with me than a complete rebrand for a $1.4 billion company.

I have always been told not to work for free, but I've done a lot of pro bono work and never regretted it. Creating a portfolio and providing samples is more beneficial than giving the impression of a low-rate. It's better to work on a project for free and create a high-quality sample that can serve as a reference for future clients.

Conclusion

Determining the right price for creating a commercial for YouTube requires careful consideration of your experience, the client's needs, and the value you bring to the project. By choosing the right pricing strategy and ensuring that you agree on terms before starting the work, you can protect your interests and build a successful relationship with your clients.

FAQs

Can I charge based on the client's turnover? Yes, if the client's total revenue (turnover) is $1 million, they should budget around $30,000 for marketing. If the video is a significant part of their campaign, this could net you a larger share of the budget. Should I always use an hourly rate? It depends on the nature of the project. If it's a one-time job, per job pricing might be more appropriate. However, if the work involves ongoing revisions, an hourly rate might be better. How can I avoid an 'all-you-can-eat' trap? Clearly define the scope of the work in your agreement. If the client wants additional revisions, renegotiate the terms to reflect the extra work.

Keywords Used

YouTube commercial pricing, video marketing, freelance rates