Advertisers gave us soap operas, the He-Man TV show (thanks Mattel) and The Apprentice. But the convergence of entertainment and advertising - Madison and Vine, if you will - is becoming hotter by the minute and "branded entertainment" is the catchphrase of the moment.
In the US, the branded entertainment sector is worth billions of dollars, although an exact figure is hard to come by. Locally, it's not quite up there, but a growing pool of players is preparing to guide the process and reap the rewards. Brand New Media, which bills itself as an independent media and communications company, claims it has been actively involved in the growth of branded entertainment for the past 10 years, while a new crop of specialists exploded on the scene last year. Igloo Communications formed its own production company arm, Igloo Productions, to manage and create brand-funded programming in February 2004 and has sold its first program, Living Coffee, to overseas markets in Asia and Latin America. Brian Gallagher left his post as group strategy manager sales at Network Ten in October, setting up Full Circle Entertainment with the backing of Ten. Soon after, production and distribution company Becker Entertainment launched Becker Branded Media, headed by Tim Flattery, while a host of other production companies and, interestingly, media agencies are setting themselves up to benefit. "Media agencies are all over this and if I were a creative agency, I'd be worried," Flattery says. But first, what's driving the rise of branded entertainment? The short answer is: brands looking for emotional resonance. More than two years ago, Coca-Cola chief Steve Heyer unveiled his vision for the future of advertising and entertainment. Speaking at Advertising Age's first Madison + Vine conference, Heyer challenged marketers, media moguls and agencies to rethink their approach to marketing. Spurred by issues such as the fragmentation and proliferation of media, escalating media and sponsorship costs, and a consumer trend towards personalisation among others, Heyer announced the soft drink giant would accelerate the convergence of Madison + Vine. "This is a convergence born of necessity," he says. "Economic necessity and marketplace opportunity. We need each other - now more than ever. We need each other to capture people's attention and influence their attitudes and behaviours." As for ad agencies, he delivered the following message: "Your future will be working with, not against, content creators. Agencies should be quarterbacking the collaborations . . . not undermining them."
SO WHAT IS IT?
"Brand entertainment has been used to describe product placement, program sponsorship and plain old engaging advertising - all of them commendable communication devices in their own right but not strictly brand entertainment," argues Stephen Farquhar, consumer response strategist at MindShare.
Strictly speaking, branded entertainment refers to cases where the entertainment would not have existed in the first place without the brand, and the consumers actively choose to be involved in its consumption, Farquhar explains. "This rules out some of the cleverer devices that come under the product placement mantle. It doesn't matter how much McDonald's pays Nelly to tell us about the size of his quarter pounder, nor how many times Simon Cowell takes a sip from his Coke bottle on American Idol - both song and program would still exist as a concept without the brand's involvement." In the words of Brian Gallagher, branded entertainment involves "a whole bunch of different areas". His company, Full Circle Entertainment, concerns itself primarily with advertiser-funded programming - TV programs funded entirely, or in part, by advertisers. It is also keeping its eye on branded content beyond the TV format, such as the internet and mobile phones. Also under the branded entertainment umbrella, events created and coordinated by brands, such as Coca-Cola's Live 'n Local series of music concerts and Heineken's Found@Thirst events, are an increasingly popular way of connecting with younger consumers in particular. Product placement, however, just doesn't make the cut. "Product placement usually comes after the fact," says Tim Flattery. "Branded entertainment is much more strategic." Ajoy Roy-Chowdhury, digital business director at Tequila, agrees. "Product placement is just sponsorship," he says. This fine line, however, becomes somewhat blurred in the case of billionaire Donald Trump's vehicle, The Apprentice, and not because Trump the man is a brand. In one episode, Domino Pizza, one of the product placement sponsors, became a key part of the entertainment when the contestants were charged with the task of creating a new pizza topping for the company. It's unclear if this was a valuable added extra for Domino Pizza, or whether more money exchanged hands. "It's an interesting grey area," says Roy-Chowdhury. Farquhar also abandons his strict definition when it comes to The Apprentice, citing another episode in which the contestants attempted to create a commercial for Dove's Cool Moisture Body Wash product. "Was it brand entertainment or just a very successful, elongated product placement? "In this case, one would have to argue that it is a very good example of brand entertainment. 'Good' partly because it was weaved so successfully into the fabric of the programming, but 'good' mainly because the entire episode could not have existed without Dove's involvement - if viewers were compelled enough to watch the episode, they would learn all about Dove's new offering - a full hour of consenting brand engagement," he says. "There's also another reason it could be considered 'good'. In an area of marketing that can be, at times, a little woolly on the ROI front, this particular example of brand entertainment generated hundreds of thousands of sample requests within hours of the program's airing." One of the golden rules of branded entertainment is to avoid the hard sell. "When you give consumers branded entertainment, it should be no strings attached," says Roy-Chowdhury. "Consumers no longer trust marketers and brands, and delivering entertainment without strings helps rebuild that trust." Also, don't push the product. "The product is secondary," Roy-Chowdhury adds. "You don't have to hide the product - consumers know they're being marketed to, but if the entertainment is of enough value, they don't mind."
2005: THE YEAR OF BRANDED ENTERTAINMENT?
Reports from the Cannes Advertising Festival last month noted the increasing number of winning entries that blurred the lines between content and advertising - one example being Publicis Groupe's GM Planworks' Media Lion for its role in the giveaway of more than 200 Pontiac G6 cars on Oprah. In a more basic example, a high-rating show in the US was paused while the screen turned to black and white and back to colour, demonstrating the benefits of Clorox household cleaning products.
This was also the year the festival introduced the Titanium category, recognising great examples of non-traditional advertising not covered by the other categories - a perfect forum for branded entertainment. Gallagher expects Full Circle to produce between $15 and $20 million-worth of programming by the end of the year. His estimate in January was $10 million, but says advertiser interest has exceeded his expectations. Gallagher has three TV programs under his belt, all of which initiated on Network Ten, and has an undisclosed number of projects on the go, including a detective drama and a soap to be broadcast on mobile phones. Bread, a small-business program produced by Sensis, airs on Ten on Sunday mornings, while Blokesworld is funded by VB and Ford. Both programs are 100% advertiser-funded. Full Circle's Ready Steady Cook, on the other hand, is only funded in part by advertisers - more than half, according to Gallagher. Igloo Productions' Living Coffee, paid for entirely by Sunbeam, Dairy Farmers, Villeroy & Boch and BMW, has already been repeated on The Lifestyle Channel three times - as well as having been sold to Asia and Latin America. The first time it aired, it delivered a cumulative reach of 600,000 high net viewers. The company's second show, Mixing with the Best, has been funded by Suntory and Gulf Air, while a third series, Living like Kings is now in pre-production. Brand New Media has produced a TV program for Mitre 10, Let's Do It, which again airs on Ten, as well as a magazine called Do it. Also under its belt, Chilli Factor, an extreme sports program paid for by Pepsi and a raft of other youth brands, and a surfing series called Salt TV for Coke. The Cut, a 10-week reality golf series sponsored by Toyota, airs on the Seven Network. In the online space, Tequila has been pushing branded content line for some time now, and luckily for the agency, its clients are more than keen to lead the way. Among many examples (see also "Online content: see you down at Cocotown"), The Life on Mars website (lifeonmars.com.au) is a classic example of branded entertainment. The site is filled with constantly changing games under the umbrella of a quiz show dubbed "Know like an Earthling" and adheres to the agency's no strings attached rule - "You can go to Life on Mars, play the games, enter the competitions and not purchase the product," Roy-Chowdhury says. Visitors to the site spend an average 14 minutes interacting with the brand and a high percentage go on to register to win a round-the-world trip, handing over valuable consumer stats. So while the site doesn't do the hard sell, the client understands a 14-minute brand experience will deliver results further down the line. "With FMCG marketing, point-of-purchase is still where most decisions are made," Roy-Chowdhury says. "If there's anything that can build that relationship to influence at point-of-purchase, that's what marketers want."
WHO STANDS TO BENEFIT?
The rise of branded entertainment is a good thing for Australia's struggling production industry - more programming means more work. It's also a good thing for the TV networks, because it can save them money on production and help them meet local content quotas, as well as allow them the opportunity to experiment (inexpensively) with new concepts while they concentrate on the prime time battle.
Some production companies, such as Becker Entertainment and Pod Films, are getting into it themselves, although Gallagher says an increasing number is approaching Full Circle to discuss partnerships. "We're not a production company. We're a content agent and our clients are production companies," he says. "We work with best of class - Southern Star, Corner Box in Melbourne, Granada and others. "We bring advertisers to production companies. Most production companies haven't developed the capacity to have those conversations direct with advertisers." Media agencies are perfectly poised to benefit, drawing on their understanding of media channels and their relationship with content producers. Omnicom's OMD, for one, is taking branded entertainment very seriously with OMD Affinity director Alistair Henderson taking charge of the media agency's venture into the space. James Greet, CEO of OMD, says media agencies "have moved upstream in helping clients define what channels they should be using". However, he dismisses suggestions creative agencies may be left out of the loop as a result. "We're not a threat [to creative agencies]. Everyone's an ideas business now - the space we're all trying to evolve is the development and delivery of ideas that draw people's attention and engage them," he says. "Creative agencies have the ability to deliver entertainment - they are the masters of short-format entertainment, which will become a bigger opportunity with the explosion of mobile media and content. "As the world converges, there's more and more people trying to get involved in everyone else's space. We can all borrow and learn from each other's ideas, and what will happen is we'll form a new hybrid of ideas companies." Others, however, argue creative agencies will be left behind. "Creative agencies risk being very badly marginalised in this whole process," Thomas says. "We can produce an entire TV series for the cost of a 60-second ad. When clients see that, they're very interested." When Igloo, which started life as a marketing consultancy, first looked into developing content for clients in partnership with production companies, it quickly realised it would be too expensive, inflexible and not fast enough. So it formed its own production company instead. "We have found ways to make it cost effective," Thomas says. "We shoot digitally, we have small crews, we use digital studios which are much less expensive than the traditional ways an ad agency would produce a TVC, and we've developed different remuneration models that involve back-end equity." Paul Bradbury, MD of Arnold Sydney, acknowledges media agencies will play an integral role in branded entertainment, "because a big part of this is doing deals with networks". "But branded entertainment is not about doing deals. It's about understanding brands and being able to entertain," he says. "But more than that, you've got to be able to persuade within that content, and that's what creative agencies have been the masters of - the ability to entertain and be persuasive. Unless that branded content communicates values about the brand, it's pointless." Creative agencies are undoubtedly the masters of short-form entertainment, so Bradbury is confident Arnold and its creative peers have nothing to lose. "A lot of branded entertainment isn't necessarily on TV," he says. "Events and online branded content are a big part of it. Short-form entertainment like that is where we'll see branded content, where we'll see growth in the short-term in Australia. We don't have the size [as a market] and brands don't have the budgets for big TV productions." Arnold is currently overseeing a marketing initiative for Leichhardt Council in Sydney where supermodel-turned-photographer Helena Christensen has been hired to shoot a series of photos in Leichhardt, which will then tour Sydney as a travelling photo exhibition. Christensen's engagement has already generated valuable PR exposure for client and agency, and Bradbury argues the exhibition is an example of branded content. "But agencies still need to broaden their skills sets," he says. "They need to learn how to put on events and understand PR among other things." At Brand New Media, Perry is reluctant to herald the end of the traditional TVC. "We will never see television commercials lose their value," he says. "Now, however, we are seeing the landscape shift to an environment where media owners' revenues are dramatically improved as they build more meaningful content-based relationships with advertisers."
An Association of National Advertisers survey in the US in March revealed the following: * 63% of marketers polled had participated in branded entertainment projects in the past year; * 42% said the top benefit of branded entertainment is to make "a stronger emotional connection with the consumer"; * 82% said branded entertainment is funded through a shift of budgets; and, * 79% of respondents indicated branded entertainment deals were overpriced. Source: BtoB 4 April 2005.
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