Costs and pricing
Part of What video marketing agencies costs and pricing means for England budgets
Video marketing agencies: eight quote lines, each priced as a unit times a quantity
Eight lines of a video marketing agency quote, each priced as unit times quantity, with a worked example and the crew-status and insurance rules on two lines.
What to take away
- Every line of a video quote should be a unit times a quantity. A line that is only a lump sum cannot be tested.
- The eight lines are creative time, crew days, kit and locations, edit days, rights, media spend, insurance, and contingency.
- Two lines carry rules you can checkfreelance crew status and employers' liability insurance.
- The pound figures in the example are placeholders. Replace them with written quotes.
What unit does each of the eight lines use?
Ask for the unit and the quantity on every line. The table shows the unit to expect.
| No. | Cost line | Unit | Question that tests it |
|---|---|---|---|
| 1 | Creative and planning time | Day | How many days for brief, script and storyboard? |
| 2 | Crew days | Person-day | Which roles, and how many days on set? |
| 3 | Kit, studio and locations | Day or booking | Is kit included in the day rate or hired on top? |
| 4 | Edit days and versions | Day per version | How many rounds of changes are included? |
| 5 | Rights | Licence term | Which music, stock and talent licences, and for how long? |
| 6 | Media spend | Pound, pass-through | Is it kept apart from production? |
| 7 | Insurance | Certificate | Who holds the cover, and for how much? |
| 8 | Contingency | Percentage | What triggers it, and who approves a draw? |
The budget template holds the lines in one sheet, and the costs and budget guide covers fees and media spend in more detail.
Example: pricing a short social film
Every figure is a placeholder, not a market rate. The arithmetic shows how unit times quantity works.
- Creative and planning2 days at £600 is £1,200.
- Crew2 people for 2 days at £500 is £2,000.
- Kit and location2 days at £250 is £500.
- Edit3 days at £450 is £1,350.
- Rightsone music licence at £300.
- Media spend, kept apart£1,500.
- Insurance£200.
- Contingency at 10% of lines 1 to 5 and 7, which total £5,550, is £555.
Production with contingency is £6,105. Adding media gives £7,605 excluding VAT. A line that states no quantity, such as "crew: £2,000", would hide whether the figure is two people for two days or one person for four.
Ask for the quantity behind every number. A price without a quantity cannot be compared with another quote.
What do you check on the crew line?
Crew are often freelance, so line 2 meets the off-payroll rules in Chapter 10 of Part 2 of the Income Tax (Earnings and Pensions) Act 2003. HMRC enforces them where the worker would be an employee of the client if engaged directly.
The rules apply to public sector clients and to medium and large private clients. A private client is medium or large if it meets 2 or more of three conditions: turnover above £10.2 million, a balance sheet total above £5.1 million, or more than 50 employees. A small client does not have to determine the status of workers engaged through their own intermediaries, according to the off-payroll guidance for clients.
For your quote, ask which crew are employees of the agency and which are freelance. Ask who issues any status determination. The question changes who carries the tax risk, not the day rate itself.
What do you check on the insurance line?
Section 1 of the Employers' Liability (Compulsory Insurance) Act 1969 requires an employer carrying on business in Great Britain to insure against liability for injury to employees, with an authorised insurer.
The required cover is at least £5 million, and an employer without proper cover can be fined £2,500 every day, as the employers' liability insurance guidance explains. If the agency employs the crew, ask for the certificate and its dates.
Insurance on freelance crew and on kit is a separate question for the agency's own policy. Put it in writing, so the quote shows who pays for a damaged lens or an injured freelancer.
How should you compare two quotes?
Put both quotes into the same eight rows. Mark any blank row as unknown, not zero.
- Align unitscompare crew person-days and edit days first, since they drive most of the price.
- Compare quantitiestwo quotes with the same total can hide different crew sizes.
- Check what sits outside the quotemedia, travel, extra rounds of changes.
- Check the two rule linescrew status and the insurance certificate.
The agency or freelancer guide compares the charge structures, and the article on business models explains retainers against project fees. Run the vendor due diligence checks on the supplier. The commercial contracts article covers the clauses.
Common questions
Is a day rate the same as a project fee?
No. A day rate prices one person for one day. A project fee bundles several lines into one number, so ask for the quantities behind it.
Does media spend belong in the agency fee?
Keep it apart. Paid media is a pass-through cost, and separate budgets let you pause it without renegotiating the creative work.
Who checks freelance crew status?
For medium and large private clients and public sector clients, the client must determine status. Ask the agency which side of the line it sits on.
