By Tom Bannister, Branded.TV
As the ability to buy mass influence fades, one proposed solution is, in the words of Mondelez SVP Laura Henderson, “a higher standard of creating content that’s good enough to make money.” A number of big brands are attempting to produce content that makes money. But will brand-funded programming ever really go beyond “ROI” and “brand lift” and generate revenue like a Hollywood blockbuster or reality format does?
There are already a lot of skeptics. Do viewers want TV shows from the same brand that provides their snack food? Can corporations serve two masters: audience enjoyment and brand sensibilities? Can brands compete with Hollywood and Silicon Valley for top creative talent? Can brands embrace the risk and failure rates of producing entertainment and the long development timelines?
These issues could all be solved. But perhaps the greatest challenge is the same one facing traditional entertainment producers: in a world of abundance, do people still pay for filmed and recorded entertainment in the first place?
Brands are going up against some of the key headwinds facing entertainment producers. The solution isn’t just about setting a creative bar as high as film or TV production, but also creating new ways to make money, beyond the legacy ones. Below we brainstorm five different ideas for how brands might make branded entertainment a direct revenue generator in the next few years:
Create Branded Content That Other Brands Buy Into
As consumer brands and media conglomerates race to dominate the multi-channel, digital world, marketing budgets are stretched across more channels and the volume of content is exponentially increasing. But strategies like McDonalds’, which take the mass, valueless content approach, feel reminiscent of the TV world, wherein you buy up all available inventory and mindshare, as much to subsume competitors as to put out your message. There is an opportunity at the other end of the spectrum, where some brands are creating rarer, tentpole content, designed to stand above content farms and, importantly, designed to be inclusive, offering opportunities for other brands to buy into.
For example, Google’s Lunar XPrize competition incentivizes other brands to sponsor science teams as they race land an unmanned rocket on the moon. Brands such as KDDI, Ideanco, DHL, Audi and SpaceX are some of the sponsors supporting teams. Red Bull is another example. The Space Jump GoPro partnership is well known, but Red Bull also put out a monthly magazine called The Red Bulletin, which sells advertising to brands like Garmin and Suzki. With brands like Uber and AirBNB also publishing magazines or taking title roles in TV series like Intel has in Turner’s “America’s Greatest Makers”, it’s not unimaginable that brands might begin to sell advertising, co-branding and opportunities for other brands. Many different businesses, large and small, live within Intel’s orbit and “America’s Greatest Makers” is an opportunity to promote those other companies. Inclusive advertising requires a change in thinking, but if a brand is going to embark on tentpole content, whether other brands
are prepared to buy into a particular project, might quickly become a benchmark for success. In the case of the “Angry Birds” movie, the sheer level of promotional support from other brand partners seems to have been a big factor in its success.
Facebook and Google have had such success with businesses, because, along with their targeting, they are able to provably connect advertising with purchasing activity. For tentpole, brand-funded content to succeed in the long run, it must prove it drives sales by connecting content to those sales. Fashion brands are leading the way here, with shoppable sites, magazines and even films. But its not just limited to e-commerce. Branded content could link directly to free trials, subscriber-ships, downloads or requests for more information. Shoppable content could also include complementary brands, along with the products of the main financier.
For example, you might click through on the new BMW film, “The Escape” (pictured) to buy a piece Louis Vuitton luggage featured in the trunk. Amazon is already almost there, with increasingly sophisticated content at the point of purchase. And Facebook has been trying to go shoppable for awhile now. Even smaller everyday purchases like Oreos could be made by connecting through tentpole content to a home delivery or grocery deliver services like Fresh Direct, Amazon Fresh, Yelp, Grubhub, Instacart, or whatever service Facebook comes up with. There is a lesson to be learned from direct response television here, especially as live broadcasting takes off and is a way to connect content to real time sales. We read a lot about increased ad rates for in-stream commercial breaks in live broadcasting, but much more effective will be activating viewers via specific calls to action, tasks and challenges, so they can purchase or sample the product in a real-time communal way and relevant to whatever it is they are watching. One example here is Seamless (GrubHub outside NYC) as they partner with TV networks to curate meals around TV events. Video game advertising on Twitch is another early leader in live, digital marketing.
The most (financially) successful digital content creators of the YouTube generation converted digital followers into successful live attendees. Rooster Teeth turned a web series made out of re-purposed Halo content into a massive convention. VidCon started out as two brothers with a channel. Twitch fans will pay hundreds of dollars in a few weeks to attend the League Of Legends World Championships. And it’s even happening in old media. According to The Hollywood Reporter, many actors now make more money from conventions than they do from episodic TV fees, and we are seeing the rise of movie themed gatherings like Wasteland Weekend. Modern lives saturated with digital media appear to have made real life experiences more valuable. In the startup world, fast growing companies like Paint Nite and Tough Mudder are based around live events. Pokemon Go and augmented reality, even Snapchat’s geofilters, are sending people out into the real world.
Brands need to be thinking about using content as a means to get people to pay to be somewhere. The “stage” is one answer to this. In the wake of the success of “Hamilton,” perhaps brands should be looking more seriously at theatrical. In recent years, partnerships have included Chrysler with “Motown: The Musical,” Pedigre” with “Annie” and Penguin Books with “Matilda.” As a creative sensibility, Broadway lends itself better to family programming suitable for brands when compared to scripted TV comedy, feature films or reality TV which, at their heart, depend on conflict (usually a frightening prospect for a brand). The stage also allows brands to cut out the labyrinth workings of old media and Hollywood distribution systems and offers a direct link to consumers.
Some retail brands like Westfield are even putting on performances at their properties and syncing in with calendar events like Black Friday. Similarly, music festivals like Budweiser’s Made In America are also a interesting option. Perhaps the best example of monetizing a music event is Apple’s Music Festival in London, where you can apply for free tickets to see Elton John or Brittney Spears as long as you sign up for Apple’s music service. Brands might even help launch independent films working with distributors, as Vans did with “Dogtown and Z-Boys.” There have been a few examples of this succeeding from Mountain Dew and Patagonia. It may seem like a stretch to imagine a brand following in footsteps of Harvey Weinstein, but independent film is a broken system and there are opportunities for companies that can provide solutions.
Building (And Selling) Networks
Brands-as-networks or publishers is an idea that has come under skepticism recently (including Doug Holt’s frequently-cited analysis in the Harvard Business Review and Campaign’s examination of McDonald’s well-publicized failure with their YouTube channel). The success of social media stars contrasted with the limited number of successful branded YouTube channels like GoPro, Lego and Red Bull have led to a rethinking of the overall approach. Do people really want to follow and get content from the brands they use every day? The answer is probably some brands more than others. Certainly brands that we use to fill up our leisure and working hours are more likely to provide interesting or useful content, than brands we use for more perfunctory purposes.
But with the “internet of things” connecting everything to the web and digital channels becoming customer relationship portals as well as marketing channels, many brands might not have a choice but to see themselves as networks. And any network needs content of varying quality. McDonald’s recently reported that they have written 147,000 replies to customers on Twitter representing a response rate of one in ten. The meaning and the function of ‘a network’ is changing and also broadening. Mondelez has had success in this area with the development of successful apps like Twist, Link and Dunk for Oreos which self-monetize via in-app purchases and advertising.
Perhaps brands should be thinking about either buying successful YouTube, Snapchat, Instagram channels or mobile apps and merging them into networks, or underwriting creators, celebrities and experts who want to create digital channels and then take a hands-off approach. Disney’s purchase of Maker Studios appears to be less a long-term media play and more about promoting consumer products like “Star Wars” merchandise. Mountain Dew recently announced that they were launching their own multi-channel network (MCN). There is an opportunity to create the next generation of MCN for live channels like Twitch, YouNow and Periscope. Perhaps large brands should consider buying a Spotify or a Refinery29. Or perhaps a car brand will buy SiriusXM. Could we get to a point, as Ray Kruzweil predicts, where the information generated by a product is more valuable than the product itself? And, if so, who will own that information and what can they do with it? We are seeing this with some brands like Samsung, Apple and GE, which are creating startup hubs and slate financing in the tech community. Becoming a network is a completely different way of functioning than running advertising campaigns and, so far, brands have only scratched the surface in their role as networks.
Educational Products And Services
There is a lot of money to be made in teaching people how to do things. Aligning content with paid educational services is already big. Zurixx — at №43 on Inc Magazines 5000 fastest growing companies, with $130 million in revenue — helps reality TV stars from shows on ABC, A&E and HGTV run seminars teaching people how to flip houses and start new businesses. Similarly, some YouTube stars like Michelle Phan monetize their fan bases by providing useful services. Phan augments beauty tutorials with curated product bags through her company Ipsy (also on Inc’s list with $169 million in revenue). Branded content could be made so useful it is worth paying for, especially with the incorporation of paid educational services, designed to improve skill level. This will be most effective where brands intersect with interests and hobbies but it will also work well in the B2B world. The sports category is also a good example, as it doesn’t feel like a giant leap for a brand like Under Armour to go from fitness tracking services to providing paid support to meaningfully improve our swimming or cycling abilities. The same thing applies with work-orientated brands like Hubspot and Salesforce, who provide a multitude of free content already, but could conceivably improve it to a point where it becomes worth paying for, or even help facilitate connections and data sharing between customers. What is the cutoff point between the free information we are inundated with on a
daily basis and information that is so useful we will actually pay for it? The ability for a brand to be useful and educational is directly linked with its ability to leverage its data in a meaningful way. As information and data become competitive advantages for successful companies, how much will they be able and willing to share and leverage that information for paying customers? In Europe, less so perhaps.
Of course, not all these ideas are going to work for every brand and perhaps none are concrete solutions. But perhaps this brainstorm will prove useful for brands thinking about making money from content.