Distribute the video budget: production and distribution.
A seemingly simple question, but a wrong answer could lead you to either spend money on videos that no one watches or waste money on ads for content that lacks quality.
No fixed ratio applies to all campaigns. The old convention often suggests about 20 percent for production and 80 percent for distribution, but this ratio shifts according to goals, industry, and running channels. The correct approach is to clearly determine where and how long the video will run before calculating the budget accordingly.
- The goal of brand awareness: leaning towards production quality.
- The goal for short-term orders: keeping production lean, focusing more on media.
- Small budget: a one-time production of quality cut in multiple formats.
- spend all the budget on beautiful videos, no distribution budget left
- invest media in a weak video; distribution money cannot save poor creativity
This is a question that Sinh Vũ almost always receives during discussions when clients start planning a video. And the most honest answer is: there is no universal number that applies to all. However, there are principles that can help you make the right decision for your specific situation.
The old convention and why it is insufficient
In traditional advertising, there is often a mention of a ratio of about 20 percent for production and 80 percent for distribution (media, meaning the money spent on advertising to deliver content to viewers). This convention originated from the television advertising era, when the cost of purchasing airtime accounted for a large portion of the total budget.
Today, distribution channels are much more diverse. Production costs and distribution costs no longer differ by the same margin. The 20:80 ratio remains a reasonable reference point to start discussions, but applying it rigidly to every campaign without considering the objectives is the quickest way to misallocate the budget.
Factors that truly determine the ratio
- Campaign objective: brand awareness campaigns often require more investment in production quality and content memorability. Direct response campaigns (targeting specific actions like purchases or form submissions) usually prioritize reach frequency, so budget leans more towards media.
- Content lifecycle: a video used over two years, re-run multiple times across various channels, allows production costs to be spread over time. A video that runs for only a short period requires more careful consideration before investing in high production.
- Distribution channels: Each platform has different media costs and creative requirements. The channel you choose directly impacts both parts of the ratio.
- Reusability: If from one production run you can create multiple versions for various channels, the value of the production budget multiplies significantly.
When to lean towards production, when to lean towards distribution
Lean towards distribution when: the goal is to generate short-term sales, seasonal campaigns, or you already have data from previous runs and know which channels are effective. In that case, production should be streamlined and quick, with the remaining focus on reaching a broad audience.
The quality of creativity is one of the important levers for campaign effectiveness. Allocating the entire budget to distribution while sacrificing content quality is a significant risk.
Nielsen, NCSolutions
Common mistakes when allocating the budget
- Focusing entirely on production, with no budget for distribution: beautiful videos but few views due to lack of promotional budget. This is a common mistake Sinh Vũ encounters with clients who see video as the end goal, rather than a means to an end.
- Pumping media into weak videos: a distribution budget cannot save content that fails to engage viewers. In this case, advertising money is wasted with low results.
- Copying rigid ratios without considering context: Hearing someone say 20:80 and applying it directly without checking your own goals and channels.
- No consideration for reusability: Producing separately for each channel instead of planning for multi-format cuts from a single shoot, unnecessarily multiplying production costs.
The viewpoint of Sinh Vũ
Sinh Vũ handles production and creative direction, not media management on behalf of clients. Therefore, Sinh Vũ has no incentive to advise you to focus entirely on production.
What Sinh Vũ always recommends: clearly define which channel the video will run on, for how long, and with what goals, before discussing the production budget. Then plan the production once but create enough formats for all those channels, so the production investment serves multiple touchpoints instead of just one.
The specific media allocation, meaning how much money is spent on which channels, should be discussed with the media buying unit or advertising agency. Sinh Vũ ensures that the creative part is substantial enough so that the media money is not wasted when it reaches them.
Decision checklist
Topic: Budget allocation for video production and advertising. Sinh Vũ guide, sinhvu.com
Select each item you find appropriate, then print or save as PDF to take with you.
If you have marked most of the signs above, this is the time to discuss in more detail. Sinh Vũ can help you review and propose a direction.
References
Viget: The Production vs Media Split in the Digital Age. TrinityP3: Setting the ad production budget. Nielsen: When it Comes to Advertising Effectiveness, What is Key (2017). Practical experience: Sinh Vũ Studio.
Frequently asked questions
Is the ratio 20 percent production, 80 percent media correct?
This is a traditional convention, not a mandatory formula. This ratio originated from the era of television advertising, when broadcasting costs dominated. Nowadays, channels are more diverse, with different objectives, so the actual ratio varies by campaign. Use it as a starting point for reference, not a rigid number to apply.
Should you prioritize production or advertising with a small budget?
When the budget is limited, the optimal approach is to invest once in quality production, but cut the video into multiple formats and ratios to serve various channels. This way, production costs can support multiple touchpoints instead of just one. Even with a small distribution budget, the content should be strong enough to avoid waste.