In the competitive world of Los Angeles commercial production, there's a persistent myth: bigger budgets require bigger agencies. But as many brands learn through experience, a massive price tag often buys you more bureaucracy than better content.

The numbers paint a troubling picture. Research from Proxima found that companies waste up to 60% of their marketing budgets due to inefficiencies in execution and planning. That's more than half of every dollar spent going nowhere. And while these studies focus on marketing broadly, the creative production process, with its layers of approvals, revisions, and coordination, is often where inefficiency compounds.

The scenario plays out predictably: a brand hires a large agency with impressive client logos, writes a substantial check, and walks away with a handful of safe, forgettable videos.

Where did the budget go?

Much of it disappeared into what you might call agency bloat, the layers of account management, the premium office space, the creative committees where ideas get diluted before they ever reach production.

The Two-Pizza Advantage

At JUNK Films, we operate on what Amazon founder Jeff Bezos famously called the "two-pizza rule": if you can't feed the team with two pizzas, the group is too large. Bezos implemented this principle at Amazon to keep meetings productive and teams agile, recognizing that smaller groups communicate more effectively and make faster decisions. The late Harvard researcher J. Richard Hackman, who devoted nearly fifty years to studying team performance, reached similar conclusions, he recommended that no work team should exceed ten members, with four to six being optimal for most projects.

We've applied this thinking to commercial video production. By keeping our teams small and focused, we strip away the corporate overhead found in traditional agency models and redirect every dollar back to the screen, to better equipment, better locations, and better talent in front of and behind the camera.

When you work with an agile production team, your video marketing strategy stays fluid. We don't just deliver a few polished spots; we deliver a full suite of high-impact assets, hero videos, social cuts, behind-the-scenes content, and authentic branded moments that actually move the needle across platforms.

Why Agility Wins in Today's Market

Big agencies are built for stability. Their structures, their processes, their staffing models, all of it is designed for predictability and scale. That made sense in an era of year-long campaign cycles and four-spot television buys.

But the market has changed. Social media algorithms reward consistency and timeliness. Audiences expect brands to respond to cultural moments in real time. Marketing budgets are under unprecedented scrutiny, with Gartner's CMO Spend Survey showing that average marketing budgets dropped from 11% of company revenue pre-pandemic to around 8% in recent years. CMOs are being asked to do more with less, and the traditional agency model, with overhead rates that can reach 80% to 120% of direct salary costs, simply doesn't deliver the efficiency that modern marketing requires.

Small, focused production teams offer a different equation entirely:

Direct communication. The person you talk to is the person behind the camera. There's no game of telephone through layers of account managers and project coordinators. When you have feedback, it reaches the creative team immediately. When something needs to change, it changes.

Creative purity. Ideas don't die in committee. When a small team agrees on a direction, that direction gets executed, not watered down through rounds of internal review designed more to manage risk than to make great work.

Budget efficiency. You pay for the craft, not the infrastructure. Without the overhead of large holding companies, the corner offices, the support staff, the administrative layers, more of your budget ends up on screen. Independent production companies and boutique agencies can deliver comparable quality at a fraction of traditional agency costs precisely because they don't carry the same fixed expenses.

Speed to market. A project that might take months to navigate through a large agency's process can often be completed in weeks with a focused independent team. For brands operating in fast-moving industries or responding to cultural moments, this speed can be the difference between relevance and irrelevance.

The Real Cost of Agency Overhead

To understand why lean teams deliver better value, it helps to understand how traditional agency pricing works.

Creative agencies typically apply overhead rates of 80% to 120% on top of direct salary costs. That means for every dollar of salary paid to the people actually working on your project, another dollar (or more) goes toward covering the agency's operating expenses, rent, utilities, non-billable staff, business development, and everything else required to keep a large organization running.

Larger global agencies often use multipliers of 4x or even 5x on hourly rates to cover their overhead and profit margins. A mid-size agency might use a 3x multiplier, while smaller independent shops operate closer to 2x to 2.5x. The math is straightforward: when you hire a large agency, a significant portion of your budget is going toward sustaining their organization rather than creating your content.

This isn't to say overhead is inherently wasteful, every business has operating costs. But when those costs balloon due to organizational complexity, premium real estate, and layers of non-billable staff, the client ultimately pays the price without seeing proportional value in the final product.

What Lean Production Looks Like in Practice

When you work with an independent commercial production company like JUNK Films, the model is fundamentally different.

Our teams are built around projects, not around filling seats in an office. We bring together the right mix of talent for each specific job, directors, cinematographers, editors, producers, without carrying the overhead of maintaining a large permanent staff. This allows us to scale appropriately to each project's needs and budget.

Communication is direct and continuous. You're not waiting for your feedback to work its way through an account team before reaching the creative leads. When decisions need to be made, they get made quickly, by the people who understand both your goals and the creative execution.

The result is work that's more responsive to your actual needs, delivered faster, with more of your budget visible on screen. It's branded content and commercial production built for the way marketing actually works today, not for a model that made sense twenty years ago.

The Future of Commercial Production

The shift toward smaller, more agile production partners isn't a trend, it's a structural change in how brands approach content creation.  As marketing budgets face continued pressure and the demand for content across multiple platforms keeps growing, the economics increasingly favor lean, focused teams over large agency infrastructures.

This doesn't mean big agencies will disappear. They'll continue to serve clients who need global coordination, massive scale, or the prestige that comes with a famous agency name. But for brands focused on getting the best creative work for their investment, on putting dollars on screen rather than into overhead, the math points clearly toward independent production.

At JUNK Films, we've built our entire operation around these principles. We're a Los Angeles commercial production company that believes in the power of small, passionate teams doing focused work. We're not here to sell you a process or justify a fee structure; we're here to make compelling commercial films and branded content that actually connects with your audience.

The future of commercial production isn't bigger. It's smarter, faster, and built around the work itself.

References & Further Reading: The Cost of Corporate Overhead

To understand why smaller teams provide better value, explore these resources on how large-scale corporate overhead impacts pricing and efficiency:

• The Hidden Cost of Organizational Drag (Harvard Business Review) – An analysis of how internal processes and "bloat" in large companies act as a tax on productivity and client value.
• The 2-Pizza Rule and the Science of Team Size (The Guardian) – A breakdown of the psychological and logistical reasons why small teams communicate more effectively than large departments.
• Diseconomies of Scale in Creative Industries (Investopedia) – A technical look at why, after a certain point, a company becoming "bigger" actually makes it less efficient and more expensive.
• Proxima, "Eliminate Waste and Complexity in Your Digital Advertising Budget" - Research finding that companies waste 40-60% of digital marketing budgets due to inefficiencies. 
• Gartner, "CMO Spend Survey 2024" - Data on marketing budget trends showing decline from 11% to approximately 8% of company revenue. 

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JUNK Films is an independent commercial production company based in Los Angeles, specializing in branded content, commercial films, and video production for brands ready to move beyond the traditional agency model. Contact us to discuss your next project.

hello@junkfilms.com

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