It is the only the third time in the survey's 14-year history that production costs declined.
The average production cost of a 30 second commercial dropped from $343,000 to $332,000.
The survey says there were declines in directors' fees, combination shoots (studio/on location shoots), editing, creative/labor fees and music. Sound recording and mixing costs increased.
The survey also looked at commercial categories, with big drops in auto accessories, furniture, beer/wine and soft drinks/snacks.
It also looked at commercial types, with drops in interview/testimonial, monologue and animation spots.
Lesley Robson-Foster, a director/designer for Riot Manhattan, a TV production studio in New York, attributes the drops to general economic conditions. "Times are hard and jobs are scarce, so people brought the prices down because everyone wants to work," she says. "And we're always being told about smaller budgets from agencies."
But not everyone in the industry sees production costs declining. Glenn Przyborski, who owns Przyborski Productions, a mid-size television advertising production firm in Pittsburgh, says prices have risen significantly for postproduction. "Today's ads are much more complicated and they all have special effects, which drives up the cost of postproduction," he says.
He also says crew costs are higher now, with cost per worker per shoot day rising. Film prices have also risen.
One reason production prices have dropped is that agencies are using stock footage more frequently. "A few years ago it was an insult to use stock footage, but now they think nothing of it," Przyborski says.
"They haven't gone down, they may be flat," he says, indicating that the rising cost of postproduction is offset by drops in other areas. He agrees with Robson-Foster that limited agency budgets are a major reason for lower costs. "Agencies used to go to production companies and take bids, but now they say this is what we have to spend, are you interested."