Advertising is Dead. Long Live Branded Content!

Not too long ago, we were all working in a “audiovisual landscape.” But today, we’re evolving in a “media ecosystem.”

And it’s a concept that’s far from being a fad. The image conveyed by this term seems to be tailor-made to the situation our industry currently finds itself in. As Wikipedia informs us, an ecosystem is a natural system that tends to evolve towards a stable theoretical state while being capable of evolving in and adapting to its environment.

This notion of evolution and adaptation is precisely what was discussed at the Les nouveaux marchés de contenu média (“New Media Content Markets”) conference on April 30, 2013, in Montreal. Throughout the event, organized by the Groupe Evolumedia, professionals from the audiovisual, advertising and interactivity industries talked about the evolution of video content and broadcasting platforms within a system that is looking for the perfect balance, as well as the different possible ways in which we can adapt to this ever-changing environment.

The best – or at least most passionate – comment came at the end of the day when a conference participant working in the field of advertising put his two cents in. In what can only be described as a cry from the heart he pleaded with advertisers, producers, creators and broadcasters to ensure the survival of their ecosystem by getting involved in the production of branded content.

So what is branded content, exactly? It’s content designed to help (without completely taking over) promote a brand, its values, its image and its relationship with consumers. It can take on many forms, from documentary film to fiction. It can also run to any length. It can provide a creative neophyte with their first directing gig, or it can be the latest work from a seasoned industry veteran. It can be distributed through many different avenues, whether it be the sponsoring company’s YouTube channel or website, through a traditional broadcaster or even in movie theatres.

Branded content is not a new phenomenon. In the early days of broadcast, radio was the first medium to get funding for productions from single sponsors, and then television followed suit. But branded content is, however, a phenomenon that has reinvented itself and adapted to the digital age. With commercial breaks definitely not as effective as they once were (and threatened of extinction ever since VCRs found their way into practically every household, enabling consumers to skip right over them), marketing professionals have had to look into new distribution options to get their messages across.

Betting on the power of narrative content

Single-handedly funding TV shows quickly proved to be too much financial responsibility for corporations due to the high production costs involved. And among other issues, exclusivity gave sponsors so much control over content and scheduling that the networks tried to take it back by implementing a system much like the one used in magazines, where sponsorship by a variety of products complemented content.

This brief history of advertising in US television is taken from Amanda D. Lotz’s 2007 work entitled The Television Will Be Revolutionized (New York University Press). In her book the author reflects on the state of television in the 21st Century – “post-network” television as she calls it – by looking back on its past transformations. Among other things, she explains how the evolution of advertising practices and financing methods have had a direct impact on the cultural institution of television itself, its programming and, consequently, the kind of stories it “tells.”

Today’s marketers are increasingly passionate about the narrative power of content and they bank on the ability that brands have to “tell stories” in order to create a strong bond with consumers. As Mitch Joel writes in his latest book, Ctrl Alt Delete: “The true marketing imperative is to tell a great brand narrative. It’s a cohesive story that takes place over time and in different channels.”

The fact that more and more video content is going “viral” thanks to social networks has taught brands they can now bypass traditional broadcasters and have direct control over the distribution of their “story.” Scott Donaton, whose book Hollywood and Vine is about the convergence of the entertainment and advertising businesses, estimates that advertisers who prefer to use the traditional model of advertising spend about 90% of their budget on distribution (the purchase of advertising space) and 10% on production. As for advertisers who prefer the branded-content model, they’re the polar opposite. They use on average 90% of their budget for production and 10% for distribution.

The best known example of branded content is probably The Hire, a show funded by BMW. Launched on the web in 2001, the fictional series was directed by a slew of film industry powerhouses, including Ang Lee, John Frankenheimer, Guy Ritchie and Tony Scott.

The Hire was definitely a groundbreaker when it comes to branded content. Back in 2001, online video content distribution was only in its very early stages. But many other initiatives have helped tweak the advertising model since then.

Take The Beauty Inside, for example. This “social” film presented by Intel and Toshiba benefited from the participation of fans on its Facebook page for a good part of its content, which goes to show how important it is to protect the border between editorial content and the marketing message imperative. The film’s star product – a Toshiba laptop – is very organically worked into the storyline where it discreetly plays a key role.

In Quebec the people at Van Houtte enlisted the help of Sid Lee early this year to develop video clips in line with the brand’s content strategy and positioning. The coffee company’s goal is to promote their expertise and craft origins by bringing consumers in on their traditional know-how.

So companies choosing to go the branded-content route are spending an average of 90% of their advertising budget on producing content. That’s great news for creators and producers, but it also spells disaster for broadcasters and content aggregators with advertising space for sale. And this must definitely be one of the reasons they’ve started looking into the latest “financing” options available to them. First, at the end of April 2013, AOL unveiled “Be On”, a high-tech studio dedicated to the production of branded content. And then, more recently, both the French and English divisions of the country’s public broadcaster announced their new content strategies, which include a summer show primarily funded by the Mouvement Desjardins for Radio-Canada and a branded-content-development initiative for the CBC.

Final thoughts go to Amanda D. Lotz: “Branded entertainment marks a fundamental shift from intrusive entertainment pushed at audiences who are engaged in other content to advertising of such merit or interest that the audience actively seeks it out.”

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