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Pricing & Negotiating: Corporate Portraits

Monday October 4th, 2010

by Jess Dudley

Corporations tend to use photography in two main ways: to illustrate their internal communications (like company newsletters whose audience is primarily employees) and in external communications (like annual reports, capabilities brochures, sales brochures and press kits whose audience is shareholders, clients, vendors or the general public). Before the advent of digital photography and desktop publishing, most big corporations had a steady need for professional photography and design for their internal communications. But advances in technology have made it easier for ordinary employees to do what they once hired professionals to do. And though the level of quality may not be the same, it is often considered good enough. That’s rarely the case for external communications which can often have a significant impact on the perception of the company, and ultimately their bottom line.

The following is an explanation of a simple portrait assignment for a Fortune 500 company, primarily for annual report use.

Our photographer first met the corporate communications director of the company when he was there on a magazine shoot. When the company replaced a member of their board of directors, they needed a new portrait to match the existing ones of the other board members. Our photographer was asked to bid on the job.

The client needed a waist-up portrait of one person on a white background. The picture had to match the others that they had shot previously using another photographer. They even had the background paper on hand. The client showed us examples of the other portraits they had done, which we were supposed to match. It’s sometimes awkward when a client asks a photographer to replicate another photographer’s work. Certainly, if there’s anything unique about the picture you’re copying, it would be a good idea to consider whether the client is asking you to infringe upon someone else’s copyright. In this case, the situation and the lighting were generic enough that there was no danger of that.

They needed the picture for a year, for a variety of non-advertising uses, including their annual report, related documents like their proxy statement, their website, and for press kits.

This client was sophisticated enough to understand how licensing factors into the estimate. Some smaller clients may not get why a photographer would want to know or care about how their pictures will be used. It’s very important for photographers to comprehend the licensing model of pricing well enough to explain it to clients in a way that makes sense and is not off-putting. When this conversation comes up for me, I explain that we need to grant a license in order for them to use the photographs. Sometimes I’ll explain further that a more narrow license tends to put downward pressure on the price and a broader licensing agreement adds upward pressure on the price. Once a client understands how licensing affects the cost, they tend to be more specific about their intended use. But it’s crucial for photographers to learn how to have these conversations.

Sometimes a client will know exactly how they want to use the photographs, and I can just put that language in the quote verbatim. However, in many cases, the client won’t be able to anticipate all the possible uses of the photographs, and they’ll want to license a range of uses. Though it makes it a little harder to nail down the value in those cases, it’s a perfectly reasonable thing for a client to ask.

I like to divide up the usage “universe” using simple terms that help the client get the flexibility they want without paying for usage they don’t need (or without unnecessarily driving up the price). For most commercial photography, usage can fit into the following categories: publicity, collateral and advertising. I define advertising as any time a client pays for placement to display a photograph. I call it collateral when a photograph is used in a publication that the client produces themselves. And publicity is when the client gives the pictures to an editorial publication (and is not paying for that use). Defining these types of usage makes it easy to grant a whole category of use for a specified time period, which provides a useful middle ground between one-time use and unlimited use. (See exact definitions below in the Terms & Conditions page.)

Fee

For this quote, the licensing was pretty clear. The client needed collateral and publicity use for one year. I tend to list the specific uses they ask for as well, to assure them that they’re included. By the way, you want to be careful not to think of “web” as a use, but rather a medium. After all, depending on the context of the use (and whose website it’s used on), it could be advertising, collateral or publicity. One way you can clarify this is to indicate the actual website that you’re granting use on.

My usual wording in the first line of an estimate indicates who the photographer is, what the picture entails, where the shoot is going to take place, how many shoot days are included and exactly what the licensing allows. Even in cases where I don’t have all the details, I’ll want to fill in my best guess of what they’re likely to be. When new information comes along, we can always update the estimate. But the estimate has to be as complete as possible. Since this is a simple job, I can describe the whole project within the estimate itself. More complex projects may require the photographer to summarize it in the estimate and then explain in more detail in a cover letter, how he’ll solve the problems presented by the shoot. Remember that the estimating process isn’t simply about presenting an appropriate price. It’s also your opportunity to convince the client that you’re interested in the project, you understand it, and you can handle it.

I’ve found that a typical annual report shoot day goes for between 1500.00 − 3500.00 depending on how sought-after the photographer is, how busy the photographer is, how big the corporation is, how difficult the pictures are, how long the days are. For this one, the photographer was a “medium”. The corporation was large. The degree of difficulty was very low. And the day was short. To me that pointed to the lower end of the scale, but I bumped it up to 2000.00 to factor in the broad usage requirements.

Even though the client was unlikely to license more than one picture, I generally like to specify the cost for additional images in the original quote to minimize awkward negotiations later. Normally my additional image fee is prorated from the shoot fee, but in this case since any additional image would be the same subject against the same white background in the same clothes, I felt a reduced fee of 1000.00/additional image was appropriate. Had the images been environmental portraits, wherein the photographer could have created two very different images, I probably would have prorated the addition images.

Expenses

The expenses on this shoot were pretty simple.

“One assistant” to help set up and stand in for the subject.

“Digital captures delivered by web gallery for editing.” For editorial and corporate projects, we typically charge for a web gallery, then we charge separately for each file prep and for retouching. That way, we can scale the cost to the needs of the client. It protects the client from paying for processing they don’t need. And it compensates the photographer for time spent processing images. You could lump the web gallery fee into the creative fee, but since it’s actual time spent outside of the actual shoot time, I think it’s important to recognize it in the estimate. With advertising jobs, instead of charging for the web gallery per se, I charge for a digital tech who would be doing that work. And instead of charging for file preps, I simply lump the basic file preparation in with the retouching. (After all, there is no advertising photograph that doesn’t get at least a small amount of retouching.) I didn’t quote retouching because I figured that the basic file clean-up that we include in the file prep charge would suffice. The Terms & Conditions says that if the client requests additional retouching that it’s 150.00/hour.

“Miles, parking, tolls.” I charge $.50/mile for car travel, plus actual parking and tolls. On short days like this, I generally don’t charge for meals (though I do pay for my assistant’s meals regardless.) I usually only put in for meals on corporate or editorial jobs when they’re full days, and usually not when we’re going to the client’s headquarters. I hate to give the impression that I’m nickel-and-diming them.

“Seamless paper and groomer to be provided by client.” Any time the client opts out of any normal item, I like to say that in the estimate. That way there’s no confusion later when the subject’s hair doesn’t look great. In this case, the subject was a woman. But the client assured me that she would arrive camera-ready. So no hair & make-up artist. (It doesn’t hurt to bring a comb, mirror, powder and sponges.) Even though the client said they had seamless paper, I brought an extra roll just in case.

There are times when I’ll add a line item for equipment, and other times when I won’t. I do for just about any advertising shoot, and for medium to large corporate shoots. But for the smaller corporate shoots, I tend to bundle it into the creative fee. I don’t have a rule of thumb for editorial clients. I consider it on a case-by-case basis.

They did not require a certificate of insurance to shoot in their offices, so we didn’t provide one.

Sales tax varies from state to state. In some states, if you’re billing the end user, they have to pay sales tax on photography unless they are exempt for some reason (like if they’re a publication or a non-profit). Also, if your client is going to be passing along your charges (like in the case of an ad agency or graphic design firm), they will also be exempt. Either way, I find it’s best on estimates to say, “plus applicable sales tax.” That way, I’m covered and it doesn’t artificially inflate the bottom line.

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