Commentary

Ad Agencies Should Produce In-House Video To Promote Branded Content

It’s still the first quarter, but it’s clear that 2014 will be the year that branded video content, more specifically online and mobile video, becomes a significant story. More than repurposed TV spots intruding as pre rolls, user-initiated, branded-content videos — meaning video that a real person needs to press the play button with the intention of watching — is pull media in one of its purest forms.

Speaking with the same voice as a brand's other messaging, it is low-cost, practical video - video as a tool, often decidedly unsexy — to further inform, assist or enhance the consumer's relationship with a brand. Yet while this form of video content will see exponential growth over the next five years, what are most advertising agencies doing to figure out how to produce this stuff?

Without diving too deep into the weeds, some numbers: Cisco, in their 2013 Internet survey predicted mobile video will grow at a compound annual rate of 75% between now and 2017. Kleiner, Perkins, Caufield & Byers, the Silicon Valley investment firm, sees a $20 billion underspend when comparing the percentage of consumer media time now spent with their mobile devices and online with the corresponding ad spend.

As mobile and online video becomes more widespread, we see more demographic and psychographic data around how consumers interact with video. Consumers tend to trust low- to medium-size budgeted video as more "real," more “trustworthy.” Made-for-Web branded video content draws a 3.3% engagement rate, higher than the 2.5% for repurposed TV spots running as pre-rolls.

With few forward-thinking exceptions, advertising agencies and advertising production vendors seem slow to adjust to these new demands for producing video content. Bitter cost-related debates have played out in the trade press and within respective trade organizations among the aforementioned stakeholders. Corporate procurement officers argue that value added to a traditional commercial by a production company and a director's talent is less important in the world of online and mobile video, where a premium is placed upon efficient production systems.

Rather than pushing back against this argument, agencies would be well-served to embrace the notion of in-house production and its potential for story control and profit.

Many agencies have paid lip service to the notion of in-house content creation without actually following through. This may be due, in part, to an inability among agency and holding company upper management to distinguish between agency production, essentially a purchasing/quality control department, and physical/production-company production, which emphasizes logistics, risk management and talent development.

In addition, without understanding the fundamental difference between branded content and spots, which is like the difference between journalism and fiction, creative departments fear that working in-house undermines their ability to create quality content — not to mention a visit to Shutters.

Just as TV did not replace radio and the Web didn't supplant TV, the :30 spot and all its Hollywood amenities will never go away. But for the scale required to produce voluminous mobile content, a new production model is needed. Scalable production places a premium on super lightweight, facilities-based, fast-paced shoots by multidisciplinary directors working non-union in production tax-incentive states such as Connecticut.

If the cliché notion that the typical agency creative has a screenplay in the top drawer has been replaced by a director's reel on a hard drive, in-house represents an excellent opportunity for agency creatives to direct. This would enhance agencies' ability to recruit and retain talent. As it is, many creative millennials have been directing and editing content for most of their lives. Emerging talent should reside in-house. This is already the case with many digital agencies and so-called hybrid shops.

If agencies and holding companies don't make the necessary adjustments to develop and execute content in house, their clients seem poised to fill the vacuum. Last year, an ANA survey indicated that 58% of member companies had in-house creative, up from 42% in 2008. 56% of those survey respondents took charge of established business that used to be handled by their agencies.

To paraphrase Dr. John, if you don’t do it, somebody else will.

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