Agencies Cut Ad Production Costs With Offshoring

Creative agencies are increasingly opting to outsource their production work to overseas firms, in order to minimize costs and maximize profits, reports the Wall Street Journal.

Companies from territories such as Eastern Europe, South America, and Asia, have adopted effective and lucrative business models, carrying out behind the scenes ad production work for major agencies at substantially lower prices.

With online advertising becoming increasingly global and targeted, hundreds of ad variations may be needed for any one campaign. Agencies still dictate creative for ads, specifying images, copy and animation, but then outsource the labor-intensive and time-consuming process of actually putting the ads together or building ad elements.

According to the WSJ, agency execs pay 20 percent to 50 percent less using overseas firms for this production, compared to what they would pay in the U.S.

Publicis Groupe’s Digitas has even created a dedicated digital-production company, Prodigious Worldwide, responsible for overseeing offshore production. The unit’s providers include avVenta, with offices in South America and Eastern Europe, and Kiev-based DDM among others.