Where Hollywood Meets Reality: The Web was supposed to lead the way in brand-funded content. Why hasn’t it happened? (AdWeek)
Posted by Generate Studios on June 15th 2009 in Generate Press
June 15, 2009
By Brian Morrissey AdWeek
NEW YORK Back in 2001, BMW Films debuted. The eight Internet videos brought together top-notch creative talent, married it with a brand and showed how the Internet could be a distribution platform for a new kind of content. Eight years later, branded content is still struggling to find its footing.
The branded-content story is a typical Internet tale: Technology threatens to revolutionize an industry, wresting power from the current gatekeepers. In this case, content creators and brands would work directly together, building new forms of entertainment and the advertising to pay for it. The idea fueled hype, rounds of venture capital investment and a flurry of activity. And yet, branded content has yet to take off.
At an Onfront gathering here last week, intended to bring together brands and producers in the manner of the upfronts, the somber tone was set in the keynote address. Jordan Levin, CEO of Generate, a production firm, skipped the usual hype for a dire warning that the entire branded-content ecosystem was at risk.
“It’s being compromised by the constrained ad dollars,” he later told Adweek. “It takes a lot of different pieces to make this go. It takes the creative community, the tech community, the VC community, but also the brand community. The advertisers haven’t made an investment of some degree of parity to catalyze this space.”
Not surprisingly, the typical bugaboos have stalled progress: an oversupply of content for what is now a trickle of advertising dollars, the recession, a lack of metrics and a fragmented market.
To be sure, brands such as Microsoft, Starburst and Burger King have found success in branded content. But by all accounts, the nascent industry is facing severe growing pains. Levin pins the blame on risk-averse advertisers who complain of TV networks holding them hostage and are at the same time unwilling to try new approaches.
This is a typical maturation process, slowed by the recession, according to Mark Beeching, CCO at Digitas, which created a dedicated unit to produce branded content called The Third Act. Advertisers, he said, have lurched from strategies that relied too heavily on destination sites to a love affair with viral videos to a tendency to create content overwhelmed by brand messages. “The biggest problem of most branded content is the brand,” he said. “So much branded entertainment is trying to make advertising entertaining.”
Uncertain metrics don’t help. When an advertiser buys time on a TV show, it knows more or less what it’s getting. For branded content, while producers have developed distribution networks that will promise views, the audience composition is uncertain. There’s no ratings body to validate programming.
“Many times they don’t know who they’re getting,” said Mike Siegenthaler, director of branded entertainment at MSN. “People are seeing [the content], but is it the right group of people for their brand? It isn’t enough to say we had X number of video streams.”
The market is also fragmented. At the Onfront, 20 producers showcased their programming, most purporting large audiences. While a diversity of suppliers is nice for agencies, said Doug Scott, president at OgilvyEntertainment, it means lots of legwork. “The biggest challenge is the total number of producers and creators coming to meet with us,” he said. That and the fact that many are simply selling ad space and product placement. He recalled one producer who wanted to integrate laptops from Ogilvy client IBM. The problem: IBM sold its laptop division to Lenovo more than four years ago. Branded content is “not [about] using the product as prop,” Scott told attendees. “It’s understanding the essence of the brand.”
There are branded-content success stories. Microsoft guarantees views on MSN and uses editorial headlines on the site to drive traffic to programming along with Dynamic Logic surveys to make sure brands are delivering their key messages. That’s helped it work on over 70 branded-content projects in the last two years, according to Siegenthaler, with the level holding steady. And Procter & Gamble has signed up for a third season of “Style Studio” on MSN Lifestyles. “We have eight years of data that backs up we’re out of the experimental phase,” he said.
Other successes show the need for tight collaboration and predictable distribution. Burger King’s integration with “Seth MacFarlane’s Cavalcade of Cartoon Comedy” did well thanks to BK working early on with the studio, Media Rights Capital, behind the Webisodes, while Google provided potent distribution on YouTube and through its AdSense network.
“There’s not enough of that happening where everyone is coming to the table,” said Brandon Berger, director of digital innovation at MDC Partners. “Right now it’s like, ‘We’ll do the show, you’ll be the brand and we’ll get so many views.’”
The slow maturation of the industry has meant several digital studios have closed shop, including the much-hyped 60Frames, backed by United Talent Agency and led by former agent Brent Weinstein. It was meant to bring a stable of top-notch Hollywood talent, like Joel and Ethan Coen, to digital projects connected with brands. Several more are at risk of failing, warned Levin. “This notion that people will continue to produce content for no reward isn’t realistic,” he said.
