Is Branded Content Salvation for Producers -- Or Simply A Mirage?

Geoff Ramsey is uniquely positioned to talk about advertising and video as the CEO of eMarketer, the research and analysis firm that covers digital marketing and media, and whom I occasionally use as the poster child for how forecasts are always off (hopefully he also has a sense of humor).

Last summer, Ramsey spoke to Beet TV and gave hope to content creators by noting “the big opportunity for marketers is to create ‘useful’ content.  Marketers need to be in the content business.”

Ramsey’s comment can be deconstructed in three statements:

1)    That advertising needs to evolve into content

2)    That marketers need to be in the content business and

3)    That the content needs to be useful. 

Content Creators are Caught Between a Rock and a Hard Place

The CPM (cost per thousands of impressions) model plays to the advantage of aggregators and disadvantage of creators.  As such, while I am against black-box pricing, content creators need to innovate and come up with an alternative to the CPM pricing model (in fact, the CPM is only relevant if the volume of impressions is large enough). 

Defining the Problem and Spotting the Opportunity

Content producers are an extinct species because their production costs are much higher than the short -erm revenue they derive from distribution deals.  So long as advertisers buy advertising through CPM, then content creators are disadvantaged for only distributors can aggregate enough videos and impressions to offer reach and generate meaningful revenues via CPM-priced advertising.   

It’s a numbers game (which plays to the advantage of aggregators) whereas content creators are by nature in the quality game (some admittedly being of greater quality than others).

Therein lies the opportunity: for content creators to strike deals with marketers via fixed pricing models and then offer reach as additional variable priced options. 

Ramsey’s Three Statements

Statement 1: Advertising as Content

Given the cluttered media and advertising landscape and the shift towards the Web and Mobile, marketers need to think and act like content creators.

However, few consumers actually welcome a total blurring between church and state.  There’s something to be said about knowing that an editorial is just that -- an editorial -- and that an advertisement is an advertisement. Advertorials may be useful and effective, but that’s more art than science.

Statement 2: Marketers Need to Become Content Producers

In some cases, marketers need to think like publishers, but more often than not, it’s simpler to license content for a campaign’s objectives or outsource production.

In the past, we have created custom content for advertisers, we have also licensed our existing videos to blue-chips like Coca Cola and McDonald.  Some brands will want to own the content and control the messaging and will feel the need to create the content, be it internally or by outsourcing production.  Ultimately, the success will be determined by how videos support the objective, and not who produced the content.

Statement 3: Content Needs to be Useful

A lot of marketers get caught up with trying to be hip or funny, but rarely does that sell product (Old Spice guy notwithstanding).  I’ll take useful over flashy any day.  Chrysler’s “Made in Detroit” campaign was more effective than the Fiat 500’s Jennifer Lopez campaign (Chrysler and Fiat are part of the same company).

With online video in particular, infotainment online video will lead to better results than scripted entertainment because building distribution for reference content is simpler than it is for fiction.

Challenges of branded content

Will branded content ever see the light of day, let alone work?  In January 2011, I wrote “Nine challenges facing branded content.”. While those challenges remain, branded content is rapidly moving from concept to reality.

Costly with no guarantees

To execute on this concept of ads-as-content, you will likely need a direct sales force, which is expensive, or at the very least, a strategic partnership with a successful sales force that doesn’t content itself with the low-hanging fruit, which right now is pre-roll.  While the large ad networks have hitherto focused on pre-rolls, an increasing number are looking at content in all shapes as forms.

Good luck going against the grain

But this misses the greater challenge of all, which is that the world is moving toward targeting audience through technology and not via content (although content is more important: no one wants to serve an ad on a Nazi site, but they would target the same user if he was on ESPN).

Video has failed to hit forecasts because everyone’s focused on the low-hanging fruit.  There are no shortcuts in life; real results only come through hard work and doing the things that others don’t want to do.  With that in mind, expect less resistance toward branded content in the years to come.


2 comments about "Is Branded Content Salvation for Producers -- Or Simply A Mirage?".
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  1. Evan Petty from Snowman Productions, LLC, October 17, 2011 at 4:41 p.m.

    I always look forward to treading Ashkan's posts, as he has a front-row seat to the business of online video content. And he's obviously a smart guy.

    I agree that there will be increasing interest in producing Branded Content by big advertisers, for number of reasons:

    First, because they need to communicate with their customers, both existing and potential consumers. And since no one voluntarily watches traditional advertising anymore, as it's gotten so easy to avoid it, the advertisers will have no choice but to offer up something of worth.

    There are many ways to define what makes video content "worth" something to the consumer, and just as many strategies that can lead to "success".

    Second, there are many steps in the consumer journey that lead to an eventual purchase decision, and engaging video content will be revealed as the best communication model for some of the earlier steps in the journey. Success isn't only about a direct sale. Brand awareness, "cool factor", gaining trust and a reputation for quality, are all aspects of marketing that need to be developed before getting to the intent to purchase. And web video, or even serial content, can deliver on these strategies better than any other communication method.

    The smart brands are starting to come around to this thinking and many interesting experiments can be seen in the market already. There will be more to come, although I'm sure it's going to take a while before the strategy is widely accepted in the CPG world. Clients are inherently conservative, and will stick with the old "push" model until it is shown to be useless. That day will come, but it may take a while.

    My thoughts on this and other similar issues can be seen on my blog:

  2. Mike Mcgrath from RealXstream PTY LTD, October 17, 2011 at 8:13 p.m.

    Thanks Ash, you have eloquently illustrated the core problems that my company RealXstream solves.

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