The Comeback of Branded Entertainment

Sep 27, 2012

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Branded entertainment is back with a vengeance. Companies across multiple consumer verticals have been creating engaging long-form digital video content and harnessing the power of social media on PCs and mobile devices to engage consumers and reach mass audiences. Some examples of the current trend from this past Summer alone include campaigns from Ford ("Random Acts of Fusion") Intel and Toshiba ("The Beauty Inside"), Subway ("The 4 to 9ers" and IKEA ("Easy to Assemble"). Moreover it's becoming clear that these aren't one-time efforts. IKEA, for example, has reported that it currently dedicates 2% to 3% of its global marketing budget on branded entertainment and a former Procter & Gamble executive reported to The Wall Street Journal that the brand-marketing giant is now spending 5% of its marketing budget in this area.

However branded entertainment is not new. Its first incarnations were the radio soap operas from Procter & Gamble in the 1930s. Later, marketers carried this model into TV where it dominated until the rise of TV advertisements in the 1950s. In subsequent decades, despite the supremacy of the 30-second spot, branded entertainment never vanished entirely. The advent of the Internet seems to have been the primary impetus for branded entertainment's latest incarnation. Most notably, Unilever created branded video content in 2005 and 2006 to support its I Can't Believe It's Not Butter! and Dove Calming Night brands. Still the stream of branded entertainment online remained a trickle until the middle of last year when companies like Intel and Toshiba ("The Inside Experience") and Toyota ("The One and Only") began releasing creative branded long-form video content. What explains the current deluge?

Banner Ads Don't Work for Brands

Early this year comScore provoked a major controversy when it released a study that found that 31% of online banner ad impressions are never seen by anyone. Less than a month later, venture capitalist Jerry Neumann wrote a piece in AdExchanger in which he suggested that online media may not be appropriate for brand-marketing. Adding fuel to the fire were additional studies whose findings were even more troubling than those reported by comScore. AdSafe, for example found that less than half (49.9%) of online banner ad impressions passed the viewability standard that the IAB has proposed.

Moreover, with the rapid rise of social media and digital video as well as the widespread adoption of smartphones and tablets, brand marketers are beginning to seriously question the capability of banner ads to engage consumers. All indicators suggest that brand marketers view social media as a way to reduce marketing spend by investing more in earned and owned opportunities. Many of the top brand marketers are also very skeptical about whether a tiny banner ad impression served on a mobile device will actually be effective in building their brands. Increasingly brand-marketing professionals in the digital space are realizing that the banner ad, which is essentially a carry-over from print media, may no longer be as effective in an environment dominated by social media and video content that must be accessible on PCs and mobile devices.

People Have an Endless Appetite for Video

With the introduction of digital video accessible via the PC several years ago, and via mobile devices only a few years ago, there was a widespread misconception among brand marketers that the growth of digital video viewing would cannibalize TV viewing. In 2012 it became clear that this is not the case. We now know that, as surprising as it may sound, expanded access to video via digital devices, rather than decreasing TV viewing, is actually increasing the amount of total video content people consume. It appears that people have an endless appetite for video content.

Digital Production and Social Media Distribution Have Made it Economical

One of the major factors in the original shift from branded entertainment to the 30-second spot was cost. It was simply much less expensive to produce a 30-second spot, which typically costs around $500 thousand, than to produce a TV show, which can easily run into the tens of millions of dollars. However, the cost of entry has dropped significantly in recent years and it is now possible to produce professional branded digital entertainment for as little as $250 thousand.

Moreover, distribution was more challenging during the early days of the Internet. In 2006, when Unilever launched its first branded entertainment content on microsites, the company had to rely on a combination link sharing via email and paid banner ads to reach its audience. Now, with the mainstream adoption of social media, brand marketers have a vast arsenal of earned and owned distribution channels that they can employ cost-effectively to ensure mass reach.

Social media and digital video accessible everywhere via smartphones and tablets has transformed the digital ecosystem in profound ways that present possibly insurmountable challenges for traditional online brand marketing tactics like display banners. Even in-stream video ads, while certainly a powerful solution may not be the panacea. Consider that a significant quantity of video content is currently consumed through peer-to-peer file sharing applications that do not currently present in-stream advertising opportunities. In this rapidly evolving environment, smart marketers, armed with the insight that consumers simply cannot get enough video content, have been increasingly investing in various forms of branded video and harnessing social media to distribute it organically and grow their brands. Ultimately what initially appeared as a challenge for brand marketers could prove to be the biggest opportunity in brand marketing since the advent of TV.