When it comes to bidding on photography assignments, there are two primary schools of thought: some photographers prefer to break out every fee and expense line by line, and then there are those who prefer the simplified approach—bundling many different costs into one. Is there an industry standard? Should there be?
Well, no. And that’s a good thing. Because it’s important to understand the situations in which one approach may work better than the other.
The best method is the one the client prefers; the challenge is figuring that out before you send your bid. If you’ve had previous dealings with the client, hopefully you have a better idea of their preference and can tailor the bid to their way of thinking. But if it’s a new prospect how can you tell which way will be better received? You can always ask straightforward questions about which approach they like, or simply make an educated guess based on your own experience. Ultimately it’s as much a question of the client’s comfort with the types of fees and expenses involved as it is with dollar amounts. For example, has the client inquired about a day rate? Will they likely balk at an equipment fee and a usage fee? If so, you may prefer bundling elements into a single fee for photography—even if in the end the total amount is exactly the same.
If a client is savvy about the various elements that go into commercial production, they may much prefer seeing all of the line items. Without them, they might wonder if the photographer has all of the bases covered. Worse, they could question if the photographer possesses the experience to handle a production of this scope. For large-scale shoots and experienced buyers, it’s probably safest to itemize by default. It’s also the most transparent approach. But according to Sony Artisan and outdoor advertising photographer Gabe Rogel, it’s important to be willing to adjust the approach as needed.
“It depends on the client,” Rogel says. “It varies so much between clients and industries. It’s just all over the place. It’s great to try to come up with some standards; I think we’ve all been trying to do that forever. In the outdoor commercial advertising industry, some clients are okay with breaking everything out. They get it and they want to see it all. I can think of one of my longest-lasting clients, though, and they didn’t want that. They told me they wanted everything to be pretty simple to send to their bosses. ‘Lump some of your fees together, lump some of your travel items together and just keep it kind of clean,’ they told me. I’ll make the estimate look however they want it to look. The biggest issue is to separate creative fees from usage fees, as opposed to just charging a day rate.”
The Elephant In The Bid: Usage Fees
Most commercial photographers understand the concept of day rates versus usage fees. In short, a day rate is a set fee for an amount of time, regardless of how the images get used. Usage fees, however, are a way of tying the fees for creating an image to the value of that image—with value determined by the size, scope and duration of the usage. An image on the cover of a regional mailer, for instance, has a lower value—and a lower usage fee—than an image fronting an international advertising campaign.
Usage fees can be calculated with assistance from tools such as BlinkBid and fotoQuote, although many photographers also use the rights-managed pricing calculators found on major stock sites such as Getty. The bottom line is that, however a usage fee is determined, it’s separate from the fees and expenses associated with the production and it should be billed accordingly—whether or not that means incorporating it into a single (and ultimately higher) creative fee or separate line items for the photographer’s fee and for the usage. As long as the usage is accounted for, how it is explained to the client is up to the photographer. Rogel says a good case can be made either way, but his preference is to itemize by default to help clients understand the difference between production costs and usage fees.
“I think clients tend to kind of get it more when it’s itemized,” Rogel says. “I’ve even sent estimates that have both creative and usage and if the client gets weird about it I can say here’s option B and we’ll just lump the two together. It might look a little better and make more sense to them, and then I try to kind of educate them as to why I break it out.”
“Some clients,” he continues,” it just kind of freaks them out to see a day rate—they get that—and then a usage fee. It’s always this big lump sum, it’s the big number on the estimate, and that can freak them out. I’ve found the more experienced they are, the more they get it. What I like about that structure is that it shows them that, I’m not charging a really big number per day. Let’s say I’m bidding $3,000. Some clients might balk at that. ‘Gee, that seems like a lot,’ and you can explain that it includes the usage. Or you can say hey, I’m worth $1,000 a day for my expertise, my education, my background and experience as a photographer. You can say I’m $1,000 per day and then they can wrap their heads around that a bit more. It totally depends on the client. The nice thing about that is you’re really saying, ‘I’m only charging this much for my time and experience; it’s not crazy. The biggest value you’re getting is to be able to use all these photos everywhere, however you want and in all your marketing materials.’”
Another incentive to separate creative fees from usage fees is that it can provide the photographer more options for adjusting the price during negotiations.
“If they look at the numbers and they respond that it’s out of budget, it’s too big,” Rogel says, “if you don’t include the usage fee in the creative fee then they might take a five-day shoot down to three days and there would be an argument to knock a day off the shoot and reduce the fee by a day rate, but in that case the usage should still remain the same. I’ve seen when clients really couldn’t wrap their heads around that. It was a big outdoor brand and no matter what, whether I shot for them for one day or ten days they were going to use the photos all over the place, so really the usage fee needed to be the same either way. I’ve had to explain it to them like that when the usage fee and day rate were broken out.”
Like so many aspects of the business of photography, it pays to have an established system in your office and to be consistent, and to also be willing and able to adjust as necessary. There’s a big difference between ad-hoc procedures and being able to make exceptions to established procedures.
About the author:
William Sawalich made his first darkroom print at age ten. He earned a Master's Degree from The Brooks Institute of Photography in Santa Barbara, California. Along with portraiture, still life and assignment photography, Sawalich is an avid writer. He has written hundreds of equipment reviews, how-to articles and profiles of world-class photographers. He heads up the photo department at Barlow Productions in St. Louis.