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 advertising dollars on 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 question arises in almost every discussion when a business starts planning video content. The most honest answer is that there is no universal figure 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 you can create multiple versions for various channels from a single production, the value of the production budget increases significantly.
When to lean towards production, when to lean towards distribution
Lean towards distribution when: the goal is short-term sales, the campaign is seasonal, or you have data from previous runs and know which channels are effective. In this case, production should be concise 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
- Invest everything in production, leaving no budget for distribution: a beautiful video but few views due to lack of promotional budget. This is a common mistake for businesses that see video creation 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.
Finalize channels and run times first, then calculate the budget
The logical order is to finalize which channels the video will run on, for how long, and with what objectives, before discussing the production budget. Then, plan to produce once but cut enough formats for the selected channels, so the production investment serves multiple placements instead of just one.
Production can be done in-house or outsourced. The specific media allocation, meaning how much money to spend on which channels, should be discussed with the media buying or advertising agency, as they have the data for each channel. Regardless of who handles which part, the content must be of sufficient quality to ensure that the media spend is not wasted.
Decision checklist
Topic: Budget allocation for video production and advertising. Sinh Vũ guide, sinhvu.com
Tick each item that applies or that you can already answer, 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.
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