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For the last year, I have heard many people say - "creative is king."

"You need to be testing creative."

"Creative is the targeting."

You probably have heard it all too.

Yet, when I have conversations with brands, the budgets don't reflect it.

They might even be a more prominent brand spending $100k+/month, but they have a small budget for creating ads.

People are going for the low sticker price.

But what seems like inexpensive creative is costing you a lot of money.

Today, I will break down the actual cost of "cheap" creative.

1. Sale cost + unexpected costs

I have never bought a house before, mainly because I know that if I put all my money into the downpayment, I wouldn't have anything left if I needed repairs.

People usually consider buying the house for a downpayment and monthly mortgage payment.

Few people calculate maintenance fees and a larger utility bill.

These costs can make that house expensive.

The same is true with getting content created for you.

Let's say you are getting four video concepts with an A/B test for total of eight videos.

On "Add names of marketplaces tricking brands," they will say you can get a video for $150.

Sweet - 8 x $150 = $1200.

The brands look at Goodo Studios and say; for the exact deliverables, you charge $3500 - That's 3x the price.

But it isn't 3x the price.

Because you bought on those crappy marketplaces, you are in charge of managing the creators, doing customer research, coming up with the creative strategy, writing briefs, directing edits or changes, and dissecting the data once the videos have been run.

Let's take your hourly rate from a $90,000 salary - $43. Some marketing managers get paid less and more than this - so average.

Over the weeks, it costs you 20 hours of work to do all of the creative strategy and creator management.

20 x $43 = $860

Now your total cost is $2060.

But also think about how valuable it would be to have 20 hours to do something else in your role for your brand.

Your value output is worth more than $43/hour.

2. Creative test costs

The content is made, and you need to run tests.

The content might perform a little but not something you can scale with a larger budget.

I am basing this off the fact that I have yet to hear of a video from a marketplace working. A lot of additional editing usually is needed... which costs money. Seriously, please prove me wrong by replying and showing me the video + stats on the video.

Let's say 2/8 videos are good.

You might come out positive, but you could be more efficient.

The haters will say - "it doesn't take us 20 hours to get the creatives ready."

I say, "the work to get winning creatives REQUIRES a lot of time to understand your customer truly."

If you go cheap, you start to cut corners.

Now, I can't guarantee performance and that every ad Goodo Studios makes will perform well.

Part of the game is having losers to learn what the winners are.

That being said, as a service, if something doesn't work, we make an edit to make it work or figure out the next steps.

If you got a creative that didn't work from the marketplace, that marketplace could care less if it went well or not. They took your money already.

3. Hidden costs of creators

Just when you thought it was over in terms of costs, it isn't.

Some creators are charging for usage rights or the RAW footage if you want to make edits in the future.

This can cost you north of $600-$900 per creator.

Let's say the ads don't work, but then you want to create variations using that footage.

You are paying for that usage.

2 creators x $750 = $1500

All of sudden, the total cost of your videos from the marketplace went from $2060 to $3560.

With Goodo Studios, since we shoot all of the content ourselves, we own the rights to the footage and tend to shoot 10x more than what is used in the final videos, so we have a ton of footage to create iterations and variations.

4. The final tally

Marketplace $3560 versus Goodo Studios $3500.

Let's say Goodo Studios get 3 or 4 winners out of 8 - the costs are even better.

And if your VALUE output in 20 hours is more significant than $43/hour, which it is, these videos cost you even more business value and performed worse than working with a creative studio that will do all of this and more for you at $3500.

I am not writing this as a sales pitch for Goodo Studios - there are a lot of great content studios that I would recommend... we are all friends haha.

The point is to show you that these marketplaces are stealing your money and TIME.

In fact, these marketplaces are the worst thing to happen to DTC.

I have had some want to sponsor me and this newsletter, and I not only said no, but I also denounced what they are doing to brands.

This math shows you not to look at the sticker price like when buying a home.

Remember, extra costs go into creating; just like for a home, you pay for a new roof or get a plumber to fix the sink.

These hidden costs add up, so think accordingly.

Keep creating!

Matthew Gattozzi

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