• by Gavin O'Malley  @mp_gavin, May 24, 2007

Branded content has a future; branded destination sites, not so much. That's the word from analysts and agency types trying to decipher the potential demise of Anheuser-Busch's hugely ambitious entertainment network, Bud.TV.

"Bud was right on with the idea of branded content," said James McQuivey, an online content analyst at Forrester Research. "Where they ran into trouble was with the idea that they had to be a destination site."

Debate over Bud.TV's troubles, and its industry-wide implications, was sparked earlier this week when August Busch IV, Anheuser-Busch's chief executive, said Bud.TV would "probably fade" during a conference call with investors.

The beer maker grabbed the attention of marketers and the media last year when it unveiled a $30 million plan to challenge Hollywood with a branded digital entertainment network. In an oversized write-up, The New York Times Magazine called it "the most ambitious and costly effort to date of a marketer creating Web content tailored to its own specifications."

But, as the network languished following a splashy Super Bowl debut, Madison Ave. was left trying to figure out where Bud.TV went wrong.

In March, the number of unique visitors to the site dropped 40% to 152,000 from February, according to comScore. Even worse, traffic to the site in April was too low to be measured.

In the case of Bud.TV, Anheuser-Busch may be a victim of its own pride, according to Phil Leigh, an analyst with Inside Digital Media.

"There are only a few media players who rise to the level of a destination site, and everybody else is in the long tail" said Leigh. "Anheuser didn't want to be part of the long tail, but now they may have to."

Because of Bud.TV's age verification restrictions, its success or failure has little bearing on the future of branded content, according to Chad Stoller, executive director of emerging platforms for Organic.

"It's not fair to compare Bud.TV to other efforts because of the age verification issue," Stoller said, adding: "I do think they would have benefited from a better distribution strategy."

Meanwhile, Tony Ponturo, Anheuser-Busch's vice president for global media and sports marketing, has remained solid in his defense of Bud.TV, telling OnlineMediaDaily in March: "We're not judging ourselves now ... We saying, 'Let's judge ourselves in February '08 when the site has taken root.'"

Ponturo was not available to discuss August Busch's comments to analysts this week regarding Bud.TV. A person close to the initiative, however, insisted that Bud.TV is not dead yet, and there are new plans to breathe life into the network.