Here’s a sneak peek at our March 12 issue
The cost of Canadian talent and breakthrough advertising
It was supposed to be a feel-good story, a two-minute slice of pure Canadiana to sell a few beers.
On Super Bowl Sunday, Budweiser launched a spot for the Canadian market in which two men’s hockey teams in Ontario were surprised by a flash mob of fans, as well as a full broadcast crew and announcers, adding some professional ambience to their recreational-league game. But not everyone who watched felt warm and fuzzy.
“I looked at that spot and the first thing I started doing in my head was the math,” said one agency president interviewed by Marketing. The math, in this case, refers to the talent costs that would have applied to the Bud spot had it been produced by a Canadian agency that was a signatory to the National Commercial Agreement, or NCA.
That’s the collective bargaining deal negotiated by Canada’s actors’ union, ACTRA, and representatives from both agencies and advertisers. And that math, according to this agency head—who requested anonymity—was daunting. “It would have been $250,000 in talent costs.”
Would have been, except that in this case Labatt, which brews and distributes Budweiser in Canada, enlisted its global agency, New York-based Anomaly to create the ad. Whereas Canadian signatories to the NCA would have been required to pay ACTRA rates for the hundred or more people who appear in the spot, the American firm wasn’t bound by the agreement and was likely able to keep costs lower.
The estimates on talent costs for the Bud ad put forth by senior agency sources ranged from $250,000 to $1 million. Those costs, combined with the continual downward pressure on campaign budgets coming from clients, have some agency leaders wondering whether NCA signatory shops will increasingly lose business, at least when it comes to densely populated spots like Bud’s beer-league hockey ad, to foreign and non-signatory competitors.
Talent costs associated with large-cast commercials depend on how each performer is classified under the NCA. According to ACTRA, “principle performers,” those actors who are clearly visible and have speaking roles, earn $706 per eight-hour shooting day plus a $1,650 residual fee for each 13-week broadcast cycle of a national English spot. Actors who are “silent-on-camera” receive the same workday or “session” fee along with a $1,097 residual fee. Principles and silent-on-camera actors also earn additional session fees when their spots are used online—one fee per website or if the marketer pays the equivalent of three fees they get the right to use the ad on an unlimited number of sites.
“Background” performers get $432 per day, while “group background” performers—for example, fans in a stadium—get $288.50, and neither get residuals or online fees.
Not surprisingly, ACTRA has a different perspective on the Bud hockey spot and has chastised Labatt for circumventing the union. “It’s an embarrassing day for Labatt when they’re caught exploiting everyday folks in their multi-million dollar television ads,” said Heather Allin, ACTRA Toronto president, in a statement. (Labatt declined Marketing‘s request for an interview, but did respond to ACTRA with a statement of its own; see below.)
Daintry Dalton
According to Daintry Dalton, regional executive director at ACTRA National, the union would have classified the majority of the performers in that commercial in the lower-paying categories. Her estimate on talent costs: $44,000, or roughly one-fifth the lowest agency estimate.
Even if both Dalton and the agency heads are exaggerating on different ends of the spectrum, the gap between their respective estimates seems impossibly large. Dalton, though, insists that the union has eased its performer classification system to allow for large-cast commercial shoots with ACTRA performers, pointing to a clause in the NCA that allows signatories to cite “extraordinary circumstances” and negotiate a deal for a specific commercial.
“When we get an application for extraordinary circumstances, we look at it and try to come to an agreement to get it union,” says Dalton. “It just creates work opportunities and that’s what it’s about at the end of the day.”
Frank Palmer, CEO at DDB Canada, says that if his agency (an NCA signatory) had conceived of an ad like Bud’s, it would have gone to ACTRA with just such a request.
“You’d have to go make a special deal or you couldn’t do it, probably,” says Palmer. “The fact is that [ACTRA is] more willing now to look at that because they know they’re under pressure, too.”
Tom Murphy, creative director at St. John’s agency Target Marketing and Communications (a non-signatory shop) doesn’t share Palmer’s belief that ACTRA and the ad industry are on good working terms. “I’m not a huge fan of ACTRA because I think it hurts the advertising,” he says. “And I think it hurts the actors.” Murphy thinks union rates force agencies and marketers to keep cast numbers down, thus reducing creative options and the number of roles available for ACTRA members.
Ron Tite, president of content marketing agency The Tite Group and a former creative lead at Sharpe Blackmore Euro RSCG, comes from a performing background and has seen the issue from both sides. He understands the financial pressure agencies are under and advises ACTRA to keep a watchful eye on the data to make sure its policies don’t actually hinder its members’ career opportunities. At the same time, he argues that commercial actors deserve fair compensation in part because their careers come with different dynamics than most performers.
“Any time an actor’s exposed, that diminishes their ability to work in the future because they get typecast as a certain character or overused,” says Tite. “Not a lot of clients or agencies understand that simple equation. That the more people see me, the less I can work, so the more you have to pay me.”
In the long term, it may be necessary to correct a fundamental flaw in the relationship between actors, advertisers and agencies. As it stands, ICA member agencies that authorize the organization to bargain with ACTRA on their behalf are required to abide by the contract. On the other hand, even though the Association of Canadian Advertisers is involved in negotiating the NCA, ACA members do not sign such an authorization and are not bound by the agreement, freeing them to pursue non-union options. According to Ron Lund, president and CEO of the ACA, very few individual advertisers—and no ACA members that he is aware of—are direct signatories to the NCA.
The anonymous agency president believes a truly fair deal may require getting advertisers as invested in the NCA as their agencies.
“That’s the only other way to make the interests align. If the advertisers are obligated to shoot with union members, they’re going to have much more interest in what the union members’ contracts are like.”
Although they hammered out a new deal just last year, the debate over Bud’s hockey spot shows that ACTRA and ad agencies don’t necessarily agree on what the NCA’s performer classifications, rates and remedies really mean. If advertisers don’t step into the fray more directly—and, Dalton’s advocacy of a “level playing field” aside, it’s not clear what their incentive would be to do so—agencies and eventually actors could find their screen time significantly diminished.
Is this a case of bad communication between the union and the industry, or is the NCA in the way of big ideas? Post your thoughts in our comment section.
Labatt’s Take
When ACTRA issued its press release on Feb. 10, saying “Flash Fans” was “exploiting” performers, Labatt issued the following statement:
As anyone who has seen Budweiser’s ‘Flash Fans’ commercial will know, it is much more the filming of a spontaneous event rather than a traditional, scripted television advertisement. Critical to this creative was using real life players and fans who could authentically capture the spirit of a live game and deliver on spontaneity and surprise.We could not have achieved what we intended and hoped for without the element of surprise and Anomaly, Budweiser’s global agency of record, developed a plan that we agreed to and that succeeded. Everyone who participated in the filming enjoyed it and readily agreed to be part of the final product.
Marketing‘s Reader Survey
Marketing polled its readers and web visitors for one week (Feb. 13 – 17) to see whether there was sympathy for the union’s position, or if it’s battling uphill against an industry in flux.
What’s your reaction to ACTRA’s claim that Budweiser was offside using a U.S. agency for ‘Flash Fans?’
• Shame on Bud for dodging the National Commercial Agreement – 47%
• Relax. It was just one ad. There’s plenty of work for ACTRA members – 24.9%
• Get used to it. NCA makes foreign agencies a cheaper alternative – 26.3%
For more insight into Canada’s creative industries, subscribe to Marketing.
