It’s been established several times over that every good marketing strategy needs to incorporate video somewhere in the campaign. Whether it’s as standalone video marketing or integrated with social media or content marketing, using video can greatly increase engagement, brand awareness, and ROI. Actually creating the video is an entirely different story. In terms of talent, technique, and technology, nothing beats outsourcing to a Los Angeles video production house. You’re guaranteed a good-sized team of professionals focused solely on achieving your desired output—basically what any marketer wants out of their production team.
Unfortunately, the biggest con when it comes to outsourcing to third-party companies is the eventual strain it takes on your budget.
Regardless of whether the Los Angeles video production company charges per scope or per project, you may end up paying quite a bit each time you sign up for their services. This won’t be too much of a financial problem if you only need a video every few months or so. However, if your marketing strategy requires a video a day—or even a week—the expenses will definitely pile up.
As a business owner/entrepreneur looking to stay within budget, is enlisting the aid of a third-party production company overseas really your best option?
The Argument for Offshore Outsourcing
Outsourcing to overseas companies—also known as “offshore outsourcing”—is defined by Wikipedia as the “practice of hiring an external organization to perform some business functions in a country other than where the products or services are actually developed.” An article in Inc. actually advises against this practice, listing about 8 different problems one is likely to experience during offshore outsourcing. The obvious language and culture barrier is mentioned, as is the lack of legal documents.
Both are excellent points against offshore outsourcing—and yet a lot of companies still choose to hire a freelancer in India or an outsourcing company in Dubai to take care of their back-office processes, like accounting or transcribing. A fair number of them also opt to have their video production done overseas, despite the terrifying lack of quality control and the potential problems to arise due to timezone differences.
According to this post by Kissmetrics, this is due in large part to labor arbitrage. The cost of labor overseas is significantly cheaper than the minimum wage in America, which is why most offshore businesses can afford to offer their services at such a reduced price. A lot of businessmen see it as them getting the most bang for their buck. Logically speaking, paying upwards of a thousand dollars for a three-minute video seems like a bad investment when you can get roughly the same thing for a mere $200 to $300 elsewhere.
For the most part, this is true. Technology and education has advanced far enough that even the seemingly amateur freelance video producers can now go toe-to-toe with professional Los Angeles video production companies. The level of quality, creativity, and efficiency may not even be that far apart. You get what you pay for rings true when it comes to overseas outsourcing, but every now and then companies do stumble upon the rare gems.
Why Local Production Houses Are Still Your Best Option
However, regardless of how tempting a deal it may seem to go the offshore route, bear in mind that the risks involved oftentimes outweigh the hundreds of dollars saved. As Inc. mentioned, contracting an overseas third-party company means a distinct lack of legal binding documents. If the company or freelancer decides they no longer want to do your project, they can just leave, and you’d waste more resources trying to track them down and get them to finish.
Another viable risk is budget. Yep; ironically enough, you may spend more in your effort to save more. The initial cost may seem a lot less when outsourcing overseas, but other factors that normally wouldn’t come into play during local outsourcing tend to add to the overall fee. For example, every revision to the final product could cost you an extra $50 to $150. Customization (for aspect ratio, frame sampling, final format, and the like) could be another hundred-or-so dollar charge.
By the end of it all, your “savings” may have trickled down to just a couple hundred bucks. Was the time and effort you spent finalizing the video worth it? Some might say yes, but a good number of entrepreneurs—especially the successful ones—value their time as their most precious commodity, and thus would beg to disagree.
Labor arbitrage and budgeted marketing aside, there’s no replacing the level of quality and service you can get from a local Los Angele video production company. Should you swear off offshore outsourcing altogether? We say yes. However, if you still think the savings are well worth the risk, then proceed with caution.