There’s a number nobody in the production industry likes to talk about out loud. It’s the gap between what a brand spends on a commercial and what actually reaches production: the lighting, the talent, the locations, the craft. That gap is larger than most brands realize, and it exists in almost every production route available to them.

Here’s what’s actually happening to your budget before a single frame is shot.

The Traditional Agency Route

If you’re working with an ad agency, your budget passes through several sets of hands before it reaches a production company. Each set takes a cut.

The agency itself typically charges 10 to 20 percent of the total budget for creative development, strategy, and project management. That’s their fee for being in the relationship. Say your budget is $200,000 (a reasonable figure for a mid-tier brand commercial, though the same math applies at any level). The figures below are illustrative, based on representative industry ranges rather than a universal average, but they reflect how these structures typically work in practice. At 15 percent, the agency keeps $30,000 before anything is produced.

Then there’s the sales rep or producer who connected you to the production company. Their commission runs 5 to 15 percent. Call it 10 percent: another $20,000 gone.

What reaches the production company is $150,000, which is 75 percent of what you started with. But the production company isn’t passing that full amount to the work either. Like any business, they carry overhead: insurance, coordinator salaries, equipment, office costs, and profit margin. Industry standard for production company markup runs 15 to 25 percent of what they receive. At 25 percent, that’s $37,500 of the $150,000 already received that goes to overhead and profit before crew is hired or a location is booked.

The result: roughly $112,500 of your $200,000 budget actually reaches production. That’s 56 cents on the dollar.

The other 44 percent went to relationships, commissions, and overhead. None of which the audience ever sees.

The Crowdsourcing Route

Crowdsourcing platforms (the kind that promise fast turnaround, competitive pricing, and access to a network of filmmakers) look like the lean alternative. Fewer layers. Simpler process. Lower perceived cost.

And to be fair, some brands go in with eyes open. They don’t have existing relationships with production companies. They don’t know how to evaluate a director’s reel or manage a crew. The platform handles the sourcing, the vetting, and the logistics, and for brands without those connections, the platform fee can feel like a reasonable finder’s fee. Convenient, low-risk, and someone else’s problem to manage.

That logic is understandable. But convenience has a price, and that price shows up on screen.

These platforms operate on a fixed split: they retain 50 percent or more of whatever the brand spends before a creator is selected or a single creative decision is made. On a budget of $200,000, the platform keeps at least $100,000 upfront. And because the budgets coming through these platforms tend to be smaller than what a traditional agency handles, the platforms take an even larger cut to compensate, making up in margin what they lose in scale.

What was once an open-bid process, where budget allocations were visible to both brands and creators, has largely shifted to direct outreach. Higher-value projects are now routed through personal emails and private conversations rather than public calls. Brands don’t see that process. They see a curated result and assume the selection was open.

The production company receives whatever remains. Apply the standard markup for overhead and profit, and another significant portion stays with the production company before a camera rolls.

The result: as little as $75,000 of your $200,000 budget makes it to production. That’s 37.5 cents on the dollar, and potentially less.

A creator working with what’s left isn’t making the same choices they’d make with a full budget. You might see a portfolio full of high-end work during the selection process, but the work delivered at those budgets can be functional rather than cinematic. The finder’s fee only makes sense if you don’t know where to find the right production company. If you already have that connection, the platform fee becomes a cost you were never actually required to pay.

What This Actually Means for Your Product

A commercial is only as good as what went into making it. Locations cost money. Experienced crew costs money. Talent costs money. Time costs money. When the budget that reaches production is $75,000 instead of $150,000, those aren’t abstract accounting differences. They show up in the frame.

Brands that want agency-level quality but can’t justify agency-level overhead are caught between two imperfect options: pay for layers they don’t need, or accept a product that reflects the budget left over after the platform takes its share.

Neither is the only choice.

The Question Worth Asking

Before you commit a budget to any production route, ask one question: of the total amount we’re spending, how much is going toward what the audience actually sees?

The answer should inform everything: who you work with, how you structure the engagement, and what you expect to get back.

Most brands have never been shown these numbers before. Now you have them.

Ditto Creative is a commercial production studio. We handle production in-house through our own production arm, which means fewer intermediary layers and clearer accountability for how the budget is allocated. More of what you spend reaches the work. If you want to talk about what your budget can actually do, get in touch.