Part 2: Advertising Q&A Ronald's questions

Hi there, I love it when my readers ask me questions that I can turn into blog posts. My reader Ronald has read my recent piece The Advertising Q&A: Who, What, When, How, Why and he has asked me the following questions:

Ronald Seah22 December 2013 03:24

Hi limpeh, I was wondering how is the pay like for advertising gigs like this. Are all advertising jobs well paying, and does the pay for different gigs vary widely? Also, do the advertising agencies pay their actors in advance, or only once the ad is aired?

Just how lucrative is advertising?

Well, thank you so much for your question Ronald! So, are advertising jobs well paid? I think you've answered your own question: "the pay for different gigs vary widely". The key factor is just how many people are going to see that ad. Let's compare an ad for the USA (population 317,300 million) to an ad for the Maldives (population 317,280). The market for the USA is approximately a thousand times bigger than that of the Maldives - so an ad for the USA would be a lot better paid than for the Maldives as far more people would see that ad in America than in the Maldives. Generally, the pay is divided up into the following categories (these are not hard and fast, just rule of thumb):

• Global market (ie. the whole wide world, international campaign)
• Very big market that comprises several countries >100 million (the European Union, for example) 
• Very big market in just one country >100 million (eg. Japan, USA, China*)
• Big country 50 to 100 million (eg. UK, Germany, France, Italy, South Korea) 
• Middle tier market 10 to 50 million (eg. Australia, Canada, Taiwan, the Netherlands)
• Lower middle tier market 5 to 10 million (eg. Singapore, Austria, Switzerland,  UAE)
• Small market 1 to 5 million (eg. Slovenia, Ireland, Kuwait, Qatar) 
• Very small market 250,000 to 1 million (eg. Fiji, Luxembourg, Brunei, Iceland) 
• Very geographically specific market under 250,000 (eg. the people who pass through a regional airport within a 6 months period, or the residents of a small town of a population less than 250,000) 

It's not what you do on set, it's how many people will ultimately see it which determines your pay

You get the idea. If you're the face for a global campaign for a brand like Nike, Coca-Cola or Apple, then you're going to be paid a minimum of 6-figures, possibly 7-figures if it is a very major ad campaign that runs for 6 months to a year. Then the further down the scale you go, the less money you will get paid. For a high profile ad in the UK, you can expect anything from £2,000 to about £10,000 depending on the usage. So if you're the face for a product that is local to Brunei, then you'll be lucky if you can get a thousand Brunei dollars for it even if your face will become instantly recognizable in Bandar Seri Begawan.  Is this fair? Not really, because regardless of how many people eventually sees that ad, it will take the production team and actors/model just as long to produce it! 

I have put an asterisk next to China in the list above because China is a complex market - the population of China is 1.36 billion and the affluent middle-class who enjoy a standard of living on par with their Western counterparts is approximately 300 million (and growing). That means that for the purpose of an ad for a product like a car, then only the affluent middle-class can afford such a product and so the Chinese market shrinks from 1.36 billion to about 300 million (still a huge market nonetheless). However, if the ad is for a cheaper product like a biscuit, then practically everyone - even very poor Chinese people in the countryside, can afford to buy a pack of biscuits. That's when the Chinese market can be effectively 1.36 billion. 

Oh the complexities of the modern Chinese market.

Of course, what I have said can apply to every single market - but the percentage of American consumers who can afford a car is a lot higher than the percentage of Chinese consumers who will ever be able to own a car in their lifetime. There are several countries with huge populations like India, Bangladesh, Mexico, Philippines, Ethiopia, Indonesia, Pakistan, Vietnam and Nigeria where only a minority of their population have that middle class status (by Western standards). So if you happen to do an ad for a country like Indonesia, how much you get paid for that ad really depends on how big the actual market for the product is.

There is also the time factor as well - the average lifespan of an ad is pretty short these days, gone were the days where ads ran for 12 months (that still exists but is quite rare now). Most ad agencies would pressure persuade their clients to come up with a new campaign after 3 to 6 months so that they can get more money out of them keep their image fresh in the public's eye. Obviously the long the ad runs, the more people will see it, the more the model is paid. There are ads which are event specific or for a very short period - such as a Christmas themed ad which may run only for 4 to 5 weeks prior to Christmas, so models in those ads will be paid less as the lifespan of that ad is very short. 

The longer the ad runs, the more you will be paid.

This brings me onto my next point - there are mass market products and there are products which are very specific to a certain demographic. Let me give you a few simple examples. There are products which are specifically aimed at women - take cosmetics for example: the vast majority of cosmetics are targeted at women as most men simply do not wear make up. The market for lawnmowers is limited to people who have gardens and cut their own grass - that excludes people like myself who live in flats. Then you come down to very specific interest groups - for example, even in country like Poland which experiences snow every winter, not everyone participates in winter sports - so an ad for snowboards in Poland is only targeting a very specific group of people who are willing and able to purchase new snowboards. Hence the pay ads for products like this would be less than a mass market product/brand name with a wider appeal, like a supermarket or a mobile phone operator. 

Then there are B2B (business to business) products which target a very specific market - so for example, in the Aviation industry, there are many suppliers to the big airlines, such as airplane manufacturers. Major airlines like British Airways, Singapore Airlines and Virgin Atlantic do not make their own planes - no, they buy them from manufacturers like Boeing, Bombardier and Airbus. These airplane manufacturers would never do a mass market ad to target travelers per se they are looking to sell their planes to the airlines, not the individual traveler. When I am flying from London to Singapore, I shop around for a good deal and consider factors like price, stopover(s), quality of the service, whether I can earn air miles, what time the flight takes off (do I have to get to the airport at 4 am?), the duration of the flight, stopovers (do I want an 11 hour stopover in Oman?) - what I do not consider however, is the make of the plane. I basically trust that major airlines would use planes which are safe and can get me from London to Singapore - whether the plane is a Boeing, Bombardier or Airbus is frankly irrelevant to me when I choose my flight. 

That's me boarding a plane in Oman - what kind?! No idea!

So if you're doing a B2B ad that is only going to appear say in a trade specific magazine for a certain industry (as opposed to a widely read national newspaper), then the number of people seeing that ad is going to be seen by very few people - and that means that you're unlikely to be paid much for that ad. Figures for the readership for such magazines are available and the amount the model is calculated on an estimate of just how many people will see that ad (rather than the population of the country as not everyone in the country will see that ad). Thankfully, most companies will also try to use these ads online once it is created, so that means more people will see the ad online and that often translates to a bit more money for the models involved. 

Okay, all that is fine - but I bet you want to know how much I got paid for that ad I did. I can't give you precise figures as that would be unprofessional, but let's just say it was a bit more than I thought. You see, Singapore is a relatively small market (population 5.3 million) compared to the UK market (63.2 million) which is significantly bigger than the Singapore market. I had expected the money to be a lot less than what I normally get for British ads, but it wasn't that much less. Furthermore, given that this is an ad specifically for the aviation industry (rather than a mass market ad), I thought that would further reduce the amount of money I would get for the ad - but no, I got offered quite a lucrative contract nonetheless. The fact that I was offered far more money that I thought I should have is probably to do with the fact that I was working with a huge corporation with deep pockets, rather than a small company. When you consider the fact that I was on set for 6 hours on the first day and only 4 hours on the second day and those 10 hours includes hour-long breakfast and lunch breaks on both days, so effectively I worked less than 6 hours only, that's pretty easy money. 

Pretty darn good work if you can get it!

I have done far more well-paid ads and by far, the most well paid ad I have done was for Cadbury Chocolate "Joyville - Dairy Milk Bubbly" back in 2012 - ironically, I wasn't even recognizable in the ad. I was so heavily made up it was nearly impossible to recognize me in that ad. I had auditioned for one of the lead roles in the ad as the "chocolate master" but in the final edit, my big solo scene hit the cutting room floor. I can still be seen in the ad (only just) but I thought, that's it, they're going to downgrade my contract given that I'm not instantly recognizable in this ad - but what do you know, they honored the contract (I have to thank my agent for that). The ad then went on to be used in places like Australia, all over the Middle East and Canada so I then received money for each new territory the ad was used in. Whoopee! 

Contrast that to this ad which I did back in 2007 for DFS - that was my face all over it, I was the only actor and I hogged the screen for the entire 30/60 seconds (there were two versions of the ad). If you haven't seen it yet, here it is once again in all my glory. Ah yes, this was my 15 minutes of fame back in the day! 

You would've thought that I would have earned a lot more money for a performance like that - but actually, the money was less than what I got for the Cadbury ad for the following reasons: the Cadbury ad was used in several territories (UK, Canada, Australia, all over the Middle East) whilst the DFS ad was only for the UK. The Cadbury ad was used for a period of 12 months whilst the DFS ad was for a very limited period (promoting the winter sale in late December to mid January). But oh well, at least my lovely Inuit ad lives on on the internet for all to see forever and ever. 

As for the payment terms, you are never paid in advanced - payment is usually expected about a month or two after the completion of the job. There are several reasons for this: firstly, this is pretty standard as many industries follow the same pattern. When you engage the services of an electrician or a plumber, they turn up, do the job then give you an invoice. You then inspect that the job is done properly before handing the money over. Likewise, teachers are paid at the end of the month for the work they have done, not at the beginning of the month for work they are contracted to do that month. In rare instances, some actors are paid an advance to secure their participation in the ad - but this only happens with really big stars. We only get expenses up front (for travel, meals, hotel, costumes, props etc). 

We have to wait a few weeks to a few months to be paid.

Furthermore, the ad agency wants room to wriggle when it comes to payment: there are two components to the pay the model receives. In the UK, there is a small fee called the 'daily rate' which is around the £200 to £250 mark (excluding overtime) which is simply the fee paid to the model for showing up that day for the shoot. The major component of the fee is called the 'buy out' - which refers to the fee the model is paid for appearing in the ad. The buy out fee is usually a lot more than the daily rate but the two are kept clearly separate for a good reason. Let me share with you four true stories that illustrate what can go wrong to us poor actors/models.

First story: my friend Neil was engaged to be a model in an ad for a major clothing label. The client had agreed the list of models to be used with the ad agency. When Neil turned up for the shoot, the people at the ad agency told the models that a new person at the client's company had taken over the project and that there may be some changes, but not to worry. This new person in charge came in, took a look at the models and fired half of them on the spot, including Neil. Neil's agent went through the contract and the way it was structured, Neil was only entitled to the £250 daily rate for turning up that day, but the rest of the buy out fee was not due until Neil's face appeared in the final ad campaign. So as he was 'fired' from the job, all he could get was £250 instead of around £6000. 

Yes clients can change their minds midway through a shoot!

Second story: my friend Georgina was meant to do a photo shoot in Barcelona, Spain last winter and everything was confirmed. Then on the day she was supposed to fly out to Spain, dense fog descended on London and all flights were subject to cancellations and delays. There was little anyone could do as Georgina waited for the fog to lift. The shoot was on a Tuesday and Georgina was trying to fly out on a Monday afternoon - normally that would be fine as it is only a 2 hour flight to Barcelona. But when it became clear that there was no way Georgina could get to Barcelona for Tuesday morning, then they simply decided to cut their losses. Georgina would be reimbursed for her expenses, paid a daily fee but was effectively fired from the shoot and a local replacement model in Barcelona was found. 

Third story: This happened to me! In 2012, I got a part in an "ident" ad - HSBC were sponsoring the Rugby Sevens world series and they were shooting an ad specifically for that event (to be shown only during the commercial breaks during the live broadcast of the event). The ad involved different groups of international fans supporting their favourite teams and celebrating when their win. When I turned up for the shoot, I was told that they had probably already shot too much footage for these short ads and some of us may hit the cutting room floor. Sure enough, my "celebration dance" hit the cutting room floor. Ouch. So I never take anything for granted until I actually see that ad on TV. I was paid only the daily rate and not a penny more. Ah well, as it was an event specific ad (as opposed to a global ad campaign that ran for 12 months), the money wasn't that great so it was not like I missed out on a contract that was worth a king's ransom as I hit the cutting room floor. But yeah, of course I was very disappointed.

Even I have been subjected to the cruel cutting room floor...

I feel I have to add a little explanation: I did do an audition for that "celebration dance" ad and they saw hundreds of people at the auditions. Nobody is ever paid a penny to audition - I repeat, you are NEVER paid a penny to attend an audition. They eventually engaged the services of about 20 actors/models/dancers to do the shoot and the conditions of the contract is that you get your daily rate for simply turning up and doing the shoot and the buy out only applies if you appear in the final ad. You may be asking, "why did they engage the services of a model whom they did not intend to use? Isn't that a waste of money? What is the point of auditions then? Didn't they like your performance at the audition, isn't that why they gave you the job in the first place?" All I can say is that directors can see many talented actors during the audition process, but these ads are often 30 seconds or less and there's only so much that they can squeeze into half a minute (unlike say, a music video which is about 3 or 4 minutes long).

Fourth story: In 2009, I did an ad for Cadbury Canada - a group of actors were selected to do a modern dance piece. Well I got a shock when I turned up for the first day of rehearsals - the choreographer and director made an announcement: the choreographer has changed the routine, that means we have one dancer too many. "I'm afraid we will have to lose one dancer and we will make that decision by the end of today's rehearsal." Boy I have never felt more nervous during a rehearsal - it felt like we were auditioning all over again! Nobody wanted to make any mistakes, we didn't want to be seen as the worst dancer. By lunchtime, the choreographer declared that the dancer to be cut would be male - so all the women could relax whilst he worked specifically with the guys. I swear that was the most stressful afternoon of dance rehearsals in my life, ever. In the end, it was the shortest dancer who was eliminated and it boiled down to his height, rather than his dance ability (go figure). Do you know how close that was? I was the second shortest male dancer in the group. Phew. It came down to me being about 2 cm taller than him.

You get the idea - that is why actors are never paid in advance before the ad is produced. The actors/models simply have to accept this condition because they know that it is impossible to guarantee that the actor/model will be in the final edit (as in my case with that HSBC Rugby Sevens celebration dance ad). This is a job hazard I have to accept. 

Okay I hope that answers all your questions Ronald. If you have any other questions, please feel free to leave a comment below - thanks for reading! I love answering your questions. Let me leave you with an ad I did in Slovakia back in 2011 - not that much money as Slovakia is a fairly small country (5.4 million) but it was great fun working in Bratislava with a really friendly group of Slovakian actors and crew. It was a great experience!