Remember when BMWFilms.com was the only non-traditional game in town? The iconic online blockbuster that once served as the lone poster child of advertising's future has finally become one light in the ever expanding universe of emerging media, having been joined on stage by that superstar obsequious fowl, a stolen Audi, the adicolor rainbow, and most recently, the defacement of the decade—the Marc Ecko-tagged Air Force One. Virals, branded content, video podcasts and alternate reality games are no longer the amusing little siblings of the 30-second spot. In the last few years, even more so in the last few months, they've established a nagging stronghold in the minds of marketers and advertising agencies.
Last Spring at NBC's Studio 8H, better known as the home of Saturday Night Live, a well-heeled crowd of marketing executives gathered at the AICP- and ANA-sponsored Branded Content Live! forum, where, among other things, the ANA unveiled the results of its recent survey of 117 marketers. One of the main findings was that 66 percent of marketers had participated in branded entertainment initiatives, a 3 percent rise from last year. Perhaps more significantly, the majority of the pollees who had participated in such efforts did so because they believed branded entertainment to be an effective sales tool, not a fad. Marketers have enthusiastically plunged into these waters and their agency and production partners have had to respond in kind, reinventing their own attitudes toward advertising and performing well beyond their economic means and traditional creative range to deliver a broad sprawl of content that extends across the tube, the computer, cellphones, billboards in Times Square and the cinema. The new opportunities have allowed production companies in particular to test their own limits and reassess their own roles at the creative forefront, as they step up to become indispensable partners to agencies and clients by mining fresh ways to create content and blow out marketing messages in a multi-platform playing field.
TiVo used to lurk amid the advertising set like the Grim Reaper, threatening to banish its 60-second livelihood to digital purgatory. But now, that dark cloud has given way to a promising new renaissance, especially for production companies. "Originally, for some years the community was worried about the encroachment of this work, and potentially the migration of work from traditional TV ads," says AICP president Matt Miller. "With all the talk of doomsday, it's probably the most opportune time for commercials companies."
"I think production companies are crazy not to see this as an opportunity," adds Dave Rolfe, director of branded production at DDB/Chicago. "Many of them are reacting much faster than agencies overall, because they can. In many respects, they're more nimble, they have smaller overhead, they don't have the same type of structure, and they're discovering where the opportunities are. There are some areas that they're pioneering for us." Last year, at a Creativity-sponsored roundtable featuring heads of broadcast production, Rolfe singled out director Bryan Buckley and production company Hungry Man for blowing out the concept of the Mini Cooper "Counterfeit" campaign, which earned a Titanium Lion at Cannes in 2005 and this year went on to win Best of Show at the One Show Interactive. Beyond traditional spots, Hungry Man was involved in print as well as an extended-length instructional DVD that was sold on the commercials. "Their role is becoming more inclusive in terms of delivering an entire idea and the culture surrounding an idea," Rolfe said. In the last few months, we've seen a proliferation of ambitious alternative platform projects in which production companies acted as major partners, to yield impressive marketing results, like the Marc Ecko Air Force One tagging from Droga5 and Smuggler, directed by Randy Krallman. The high-profile hoax got major news outlets and the Pentagon talking—the government came out thrice to deny that the vandalism occurred. And according to Ecko's official stats, the viral generated about $8 million worth of broadcast and print publicity—with an investment of zero media dollars.
In the spring, adidas Originals also turned out its adicolor podcasts, the brainchild of former Directors Bureau EP Sara Seiferheld and N.Y.-based emerging-media agency Idealogue, who enlisted seven of the industry's most innovative talents and gave them free reign to create their own short films, the only restriction being that each would be themed around a single color. Creatively, the work proved to be daring and fresh, which is what's to be expected for stuff that lives on the web. But uncharacteristically, the shorts are also high in production values, featuring lush cinematography to high-end visual effects. "The whole branded content thing has just been about quick, raw and shocking virals that people pass along," notes Guy Shelmerdine of Happy, who contributed the dazzlingly weird adicolor "Green" short, about a bacchanalian gathering of dandy old fogies in a futuristic Palm Springs. "That's all fine, but it's getting to a point where you've got to have the craft so that things remain engaging. We really wanted the production values of this to not be like everything else you see." With competitors cropping up everywhere from Google to MySpace and Youtube, reaching eyeballs no doubt will be a vicious game, but will better production value translate to a bigger draw? That's one question companies will need to address given the changing landscape, where content seems to be coming out of every digital pore, and the footing of the big blockbuster spot grows increasingly shaky. For some, the extra time and effort seems to have paid off. The Ecko stunt, for example, required serious dollars, effort, talent—not to mention a rented 747—in order to fly. "If we didn't have the budget to do that properly, then the hoax aspect would never have worked," notes Smuggler EP Patrick Milling Smith.
Brains Equal Gold
"What's cool about all of these projects is that they're less about execution and more about brain power," says Hungry Man's Buckley. "That to me is what's exciting, at least from our company's point of view, since most of our directors are writers or former creatives. It's not just about the ability to shoot, but about the ability to think beyond just a shot. People who are real thinkers are going to benefit from this next thing."
But besides brains, it also doesn't hurt for companies to have an infrastructure geared toward addressing the new demands. @radical.media has been a textbook pioneer, with a cabinet-full of case studies in branded content and entertainment successes, including a meaty piece of the BK Chicken ("Chickenfight"), BBH and Axe's The Gamekillers, and the most recent winner in ANA/AICP's Battle of the Brands, the ongoing MTV series, Nike's Battlegrounds, co-produced with Wieden + Kennedy. "What we realized is that in order to be able to work with the advertising agencies and their clients, we really needed to understand the television business," explains president Frank Scherma. "It's not the same business. We did some investment spending, we trained and added staff so we would then be able to tell our clients, 'If you do want to do a television show, here's how it works.' Most clients and advertisers are used to writing something they love and paying to get it on the air. Now they have to learn how to deal with a network, an advertiser. It's a very specific skill set that we decided to go after. If we can supply a much more simplified form of being able to do more for the ad agencies and their clients, then we become a solution to them." In San Francisco, multimedia production company Mekanism has established what EP/co-founder/director Tommy Means likens to a boutique version of the @radical model. Five years ago, the company founders made what now seems like a prescient move, grafting together a post house, the former Western Media, with a traditional production company, Complete Pandemonium. From the outset, Mekanism has aimed its efforts toward multiplatform work. The company partnered directly with Sega to conceive and execute the Gold Lion-Winning Sega "Monkey Ball" online campaign and continues to tap into every sort of production, from traditional broadcast to online, recently entering into a huge branded content venture with a bluechip marketer, and also producing a Doug Pray-directed documentary sponsored by OP Surfwear. "Our capabilities are really broad for a company our size," says Means. The 12-person shop has a handle on everything from production to post, even website management and analysis. Moreover, the company positions itself not just as an executional partner, but as a creative one as well. "Agencies will hire us and sort of work with us as one of their creative teams," he adds. "We'll with the them very early in the process and it ends up being a really collaborative partnership, from concept to finish."
Backyard Productions co-founders Roy Skillicorn and Blair Stribley over the last five years have built out their company model to offer agency partners a range of capabilities for new content projects. To the Backyard family they've added separate-but-related partner shops Seed (with partner/Backyard director John Immesoete), which focuses on branded content, and Transistor Studios, which houses a roster of graphics and online talents. Any combination of the three bodies work in concert to handle branded content ventures, including "Black" for adicolor, directed by Saiman Chow, and a recent series of online and DVD-distributed action shorts, Seadoo Films, with Cramer-Krasselt (Seadoofilms.com).
Resistance is Futile
It's hard for a production company to resist a big fat viral carrot dangling in front of it, not just because such jobs often present the uncensored creative opportunities that directors and production companies crave but also because they ultimately may become a very lucrative notch in their branded content bedposts. But for now, taking that bite often translates to a huge investment of time, gray matter and dollars without a huge payoff. "It's almost like moving into the world of independent films vs. a studio picture," says Hungry Man's Buckley. "The funding isn't the same, you have to work with a more down-and-dirty situation." Adds EP Steve Orent, "The work is great, but if financially it continues the way it's going without a plan, production companies are going to go belly up."
And that may very well be the biggest snag in this era of change. As production companies and directors take on bigger roles, the budgets often have proved to be even more challenging than the Nicole Richie-sized margins of traditional broadcast, especially considering these are often longer, multipart productions that can demand more than quadruple the brainpower and development time. So what's the solution? No one's convinced there is one, or that there will be just one. In many cases, companies have had to get better at cutting costs and balancing lucrative productions against the branded content reel-builders. "One solution, which at least gives us a chance to fend off attrition at the moment, is to be able to have the young creators who can multitask—guys who are not only directors but are also DPs and editors, who can cut right out of their own computer," Orent says. "Agencies like Crispin are totally open to using somebody who's not a star at the moment, and I think as long as clients and agencies are willing to do that, then we can survive—because if we have any of our big guys working on virals for two weeks, then we're in deep shit. There are times when the guys want to do it because the work is good, so if that can coincide with a decent production, then we can get through it. I feel like we're in a good position because we do have the types who will do this work even for no money." However, "I just think in the end, it's bad business. It's really unfortunate for major marketers to be getting this work for nothing. It's so lopsided at the moment. So I think until the production companies say, 'You know what, we're not going to do it,' it's going to keep going on. Having said that, there's always someone who will do it. It really is a Catch-22 at the moment."
At Mekanism, the company has developed what could be roughly described as a three-tier compensation model. The first tier involves a creative fee, for the company's collaboration in the ideation process of a campaign. The second covers production, and adheres to AICP forms, while the third applies to analysis on viral/online projects, in which the company will provide to its clients stats on visitor page views and time spent on the various websites the company creates. Also, with multiple offerings from concept to finish under one roof, the company can position itself as a budget friendly partner. "Because production budgets are getting smaller, we think it's ridiculous to go to really expensive postproduction houses, so we've set up a studio here where we can do anything on a G5, from 3-D to After Effects and editing," says EP Means. "We have the capability to do all this stuff in-house, so much more of the production budget is going on the screen." On Cramer-Krasselt's labor-intensive SeaDoo project, through Seed, Backyard directors and outside writers pitched ideas, and unlike the spots world, earned fees for their contributions. Those whose scripts were produced earned additional revenues. Steve Wax and his partners at Chelsea, along with directing collective Haxan, decided to take things out of traditional production company sphere completely when they started Campfire, an independent creative entity that specializes in alternate reality game-driven campaigns. The company's founders had built an enviable reputation with award-winning projects like Sega's "Beta 7" campaign with Wieden + Kennedy/N.Y., and had more recently partnered with McKinney on Audi's "Art of the Heist," but they learned from experience that in order to have a workable business model they'd have to flee the production pigeonhole. "Until we separated Campfire from Chelsea as a separate LLC in January, the agencies kept thinking of us as a production company, or part of a production company, so we should do all the creative work for free," says Wax. "I feel you have to separate the companies because there's such a long tradition of production companies and directors doing creative work for free to get jobs."
Like Mekanism, Campfire now charges its partners a development fee prior to production. Originally, the company's eager upfront efforts on some jobs led to poor returns on its investment. "The attitude was, help us write a script, develop a strategy—frequently months of work for free—and sell it to our client," explains Wax. "Once they award it, you'll make your money off the production. There are two problems with that. One, a lot of them never go to production, and two, you get squeezed on the production, too, so you don't ever make back the money for the months of creative. You make what has become a slight margin on the branded production, so it doesn't work." For actual execution, the company charges a separate fee. "We have our own forms," says Wax. "We don't use AICP or typical agency forms. We charge for all the production executional elements the way an agency would, because agencies subcontract the work to production companies." The company will also garner a fee from subcontracted work for accompanying web design and programming and also incurs another significant creative fee during execution, because "most of our campaigns usually require full-time work of all the partners. We're constantly changing, updating and managing all the elements. There's so much work done during that stage that we charge for our creative time."
@radical.media has also taken the initiative to create its own revenue-generating ventures. Late last year it launched, with Time Warner vet Jan Renner, DriverTV, a VOD car channel. Car manufacturers dole out the dollars, @radical.media produces a mini showroom film of a vehicle, which then appear as on-demand content, offered free to cable providers, who can also purchase advertising time around the programming. The channel, currently carried by Comcast, Cox, Time Warner and Insight, as of May featured 115 cars, and @radical CEO Jon Kamen says the company hopes to have 200 by the end of the year. "We wanted to come up with a simple idea that just might be what consumers are looking for," Kamen adds. "How many times have we all been on a car shoot in which the client was just begging us to do a trunk shot and everybody was looking at him like he was crazy? Here, we don't have to apologize because the purpose of it is to give you, literally, a virtual showroom experience. It's a really simple idea."
By and large, companies playing the emerging media game say that they're not looking to take creative reins from the advertising agencies, but to become more relevant and proactive partners in shaping the multiplatform marketing. "Our model is that we look to collaborate with ad agencies," says Backyard's Stribley. "We can provide a lot of resources they might not have naturally at their fingertips," adds partner Roy Skillicorn. "We're trying a vertical approach, taking everything and delivering it to them." While shops like the aforementioned have invested a lot of effort and faith to prime themselves for this brave new world, the larger community has yet to address the growing reality head on. Many say they are facing the shifting demands one step at a time, deciding their revenue models ad hoc. This might involve charging on a per-project basis, forming partnership deals, or backend compensation models. "The web has, in effect, become a lab experiment for a time when everything will be delivered digitally: TV, information services, everything," says Czar US EP Steve Shor. "Production companies would be wise to investigate pay per click or clicks, backend forms of payment, perhaps with a lower, flat fee paid up front."
"Everyone has to discover how to repurpose their skills for all this content that needs to be created," says the AICP's Miller. "The people who are waiting for someone to say, 'OK, everybody has to be doing this,' are going to find themselves slowly losing work because they're not going to be engaged in the dialogue that marketers need them to be engaged in." Miami-based Mia Films co-founder/director Massimo Martinotti, who has been appointed chairman of a newly formed AICP committee to examine emerging media and branded content projects (see his blog at Consumercontrolledmedia.com), foresees an ever-expanding role of the production partner. "I don't know if we'll see an evolution of production companies or a revolution," he says. "In the evolution of the species, sometimes the most successful ones are not the ones who have evolved but the ones who have completely changed the situation. Maybe companies will need to expand their reach and our rosters will have to include more kinds of directors, scriptwriters, art directors, animators, the whole package." Whatever scenario reveals itself, it's about time for a change, notes Smuggler's Milling Smith. "I think the advertising business hasn't been the most economical one for quite a long time," he says. "A shakeup is good. It means strong directors and strong production companies will be looking at jobs on the merit of creativity, rather than huge amounts of toys to play with on set, and that will be interesting for what we all claim to stand by—which is strong work."