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Madison & Vine: A Look Back, a Look Ahead

Scott Donaton on What Has Worked, How the Discipline Has Evolved and Why There's Still a Need for Branded Entertainment

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Scott Donaton, the publisher of Advertising Age, was invited to speak on branded entertainment earlier this month at Maximidia, an annual media conference and trade show that draws 9,000 people in Sao Paulo, Brazil. Maximidia is organized by Grupo M&M, publisher of Brazil's leading trade publication Meio & Mensagem. Several years ago when he was editor of Advertising Age, Mr. Donaton wrote the book "Madison & Vine." The following is an edited transcript of his speech.

I'm often asked what exactly is meant by the words "branded entertainment," and the reason for the question is obvious. Since it began being used just about five years ago, this phrase has been ill-defined and abused beyond recognition. Sometimes the definition has been too narrow: Branded entertainment equals product placement, and there's nothing new about that. Other times, it has been too broad, used to define any form of entertainment marketing, including promotional tie-ins such as toys based on movie characters distributed through fast-food restaurants.
Ad Age Publisher Scott Donaton: 'In many ways, branded entertainment today has metamorphosed from a discipline born of fear ... to a more confident and more creative position.
Ad Age Publisher Scott Donaton: 'In many ways, branded entertainment today has metamorphosed from a discipline born of fear ... to a more confident and more creative position. Credit: Andrew Walker

That lack of clear boundaries has both helped and hurt this nascent marketing discipline. On the one hand, the lack of defined borders has given branded entertainment the flexibility necessary to adapt to rapidly evolving marketing and media landscapes. And it has changed dramatically in just the last five years. On the other hand, it has given ammunition to those skeptical of its legitimacy, its accountability and its role in the marketing mix. And that keeps it from realizing its full potential.

I recently set out once again -- as I did five years ago while writing my book about branded entertainment, "Madison & Vine" -- to interview key players, examine some recent successes and failures and try to formulate my own updated view of what branded entertainment is today, and what role it plays for marketers, for media and for consumers. Those last, the consumers, are of course the most important people in the mix yet the ones most commonly forgotten or marginalized in such discussions. I will try not to do that today, but it is really a task for marketers and entertainment companies, who must ensure the consumer is their top priority, or else everyone involved in the equation will lose.

A discipline born of fear
In many ways, branded entertainment today has metamorphosed from a discipline born of fear -- the fear that audiences empowered by digital technologies would avoid advertising, and that therefore it should be hidden inside a tastier product, sort of like that spoonful of sugar that helps the medicine down -- to a more confident and more creative position, this one based on the concept that consumers will accept good content from any source so long as it is transparent, entertaining or informative, and relevant.

Let's call this "Madison & Vine: The Next Generation" or "Branded Entertainment 2.0," but it's clear to me that despite the obstacles that still must be overcome for branded entertainment to earn the standing it deserves as a viable, respected and sustainable discipline, it is here to stay. And more than just an intersection, it is proving itself as a path forward.

Notice I'm not saying the path forward. I've found over the years that those most likely to be dismissive of the very idea of treating branded entertainment with respect are those who believed it was put forth as the successor to the 30-second TV commercial and therefore as the centerpiece of a new marketing model. To the contrary, I have always viewed this as only one tool marketers will need in a diversified arsenal. It is one of the answers to the question of what happens to marketing in an age of consumer control, but far from the only one.

Certainly, there's clear evidence of its momentum. As just one indicator of that, five years ago the term "branded entertainment" appeared in about 150 news stories in print outlets. Last year, that numbers was 1,200. And that's just in print. As another indication that it is being taken seriously by those who control the wallets which our industries surround, the most recent survey of the Association of National Advertisers (conducted last year) found that two-thirds of its members have been involved in a branded-entertainment initiative. (And yes, I know skeptics will ask how many of those actually have dedicated funds to it or done more than one project. Good questions that speak to the challenges that remain, and to which we'll return.)

Defining Madison & Vine
At its simplest, there were two primary factors that drove the entertainment and marketing businesses reluctantly into each other's arms. For marketers, as I mentioned earlier, there was fear. New devices such as digital video recorders were giving audiences the ability to bypass traditional forms of media advertising. These devices let consumers decide when, how and whether they were going to interact with all forms of content. So some in the ad community decided that if they were going to avoid commercials, one valid reaction to that would be to embed products, logos and commercial messages into those entertainment vehicles viewers were choosing to spend time with.

Across the continent from Madison Avenue, those in Hollywood found their own business models and bottom lines under enormous pressure, partly from the same factors. There were other pressures felt all over Hollywood. For film studios, the costs of producing and marketing films became a huge burden just as some traditional sources of funding dried up. And the movie-business, too, was threatened by the same technologies disrupting the TV and music industries.

The result was that these two sides, the ad business and the entertainment business, which decades ago established outposts on separate coasts of the U.S. and mostly operated independently of each other since then were suddenly compelled towards each other. They realized that they had the potential to help each other out. If nothing else, the advertisers had the money and the entertainment companies had the creativity and the attention of audiences.
More than a movie, "Transformers" seems like a two-hour commercial for a toy and a product brochure for General Motors.

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Case in point: Paramount Pictures struck a deal with General Motors for this summer's blockbuster "Transformers." As you can see from the clip, this is a movie that's actually a two-hour commercial for a toy and a product brochure for General Motors. It was also a huge hit.

At its most basic, this would mark a return to the product placements and program sponsorships that in fact were the hallmarks of the earliest days of American radio and television. As far back as 1927, the "Maxwell House Hour" and "General Motors Family Party" were among the most popular shows on the NBC radio network. But while some people saw that backwards glance as an absence of creativity, there was actually strong evidence that many of those early alliances worked for both sides; "The Jack Benny Show," which was produced for Jell-O brand desserts in 1934, made a star out of a comedian whose career was rather sleepy prior to the show, and it also helped to drive record sales for Jell-O.

At its most creative, this new version of branded entertainment is capable of being much more than simply a return to product placement. But delivering on the potential isn't going to be easy.

Getting both sides together
There are, in fact, significant difficulties inherent in bringing these two sides together. They often have divergent agendas, and don't trust each other. This lack of trust was exploited early on by a new breed of middleman that popped up -- consultants, lawyers, managers and agents who pitched themselves as trusted guides to an unknown, and potentially dangerous, landscape. Many advertisers were skittish about doing business in Hollywood, afraid their pockets would be picked by slick-talking, glad-handing entertainment industry players.

It was not an entirely unfounded view. I remember mentioning to one studio executive that the ad guys thought he viewed them as wallets. He said, "Yup, that sounds about right."

But the two sides began to come together under pressure from industry innovators and big spenders who demanded that anyone who wanted to do business with them had to find ways to collaborate rather than compete. In a speech both famous and infamous for its blunt nature, Steve Heyer, then the president of Coca-Cola, told attendees at Ad Age's very first Madison & Vine conference, "I am describing a magnitude and urgency of change that isn't evolutionary, it's transformational. This convergence of content, media and marketing is born of economic necessity and marketplace opportunity. We need each other. If a new model isn't developed, the old one will simply collapse."

As the two sides began to converge, their distrust began to dissolve, and in its place came creativity. After all, these are both creatively based industries, and they began to explore branded entertainment partnerships far more sophisticated than product placement. They formed partnerships in which they deployed their brand equity, their consumer bonds, their storytelling expertise, and, yes, their muscle and money to mutual benefit.
BMW's film series was a groundbreaking partnership between a creative shop and marketer.

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The BMW online film series was one of the most groundbreaking of such partnerships. That deal fundamentally flipped the traditional marketing model upside down, with the automaker spending the bulk of its budget on production and a fraction of it on the media buy. It also created a form of advertising that consumers would actually have to seek out and download, and then spend 10 minutes or more with. Imagine the boldness of that!

There have always been those who doubted the return on the investment of that deal, but it was a brilliantly bold move and it did happen to coincide with a record sales year for BMW.

A series of intersections
It's hard to believe now, but even just five years ago the main focus of branded entertainment was on traditional media -- TV shows, films, music CDs. The internet, of course, had already begun to change the way we live. But social networks, user-generated content, mobile media and broadband video weren't yet in the forefront. It was almost as if branded entertainment and digital media were developing on parallel but separate tracks.

And then came another intersection, one that the late Motorola CMO Geoffrey Frost described as Madison, Vine & Valley. Suddenly the technology industry was an equal partner, a key collaborator and an enabler in advancing branded entertainment.

What became clear was that a new generation of empowered consumers didn't much care whether the entertainment they consumed was produced by Paramount Pictures or by Procter & Gamble or by a 16-year-old kid sticking a cat down his pants on Youtube.

They cared only that the entertainment product was worthy of their time, as determined by them. Not by a TV network executive or by an advertiser. They cared that the source of the entertainment or information was transparent, and that it served a role in their lives, whether they were seeking information on a major purchase decision or relaxation on the couch after a tough day in the office.

In effect, this gave advertisers permission to move more boldly in the direction of creating original content rather than just inserting their products in other people's TV shows and films. Brands discovered they could bring content directly to consumers and that audiences would seek out and share work they enjoyed. Especially if it made them laugh, as Virgin America proved.
Virgin America introduced humorous shorts for the web.

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The main fear with branded entertainment, and it's a healthy fear, has always been, and still is, that the deal can't damage the entertainment value of the film or TV show or video game or Web site. Much of the content produced or backed by sponsors is predictably awful. And many product placements have been ham-fisted, too blunt and too obvious. But of course there's danger in the other direction as well. If your product placement is too subtle, it may be missed by the audience completely.

The good news, at least for advertisers, is that viewers have for the most part accepted the introduction of brands into programming. There's been little or no evidence of a backlash of any kind. To the contrary, younger viewers not only accept but expect the marriage of marketing message and content, and they will not only tolerate it but seek it out -- if it delivers value.

As advertisers move more directly into content production, the danger increases that the end product will be dreadful and will turn viewers away with a hard sell at the expense of entertainment value. And surely there has been, and will be, some of that. But surprisingly much of the content created or backed by sponsors is even more subtle than anything we've seen before. In some cases, the brand is nowhere to be seen in fact. Instead, the focus is on developing content that reflects and enhances and supports the positioning of a brand without making any kind of sales pitch at all.
Dove's 'Evolution' has been another breakthrough as the marketer took advantage of viral video to tell its story.

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Videos, not commercials
As many of you know, Dove's "Evolution" video took the top prize at Cannes this year. Only thing is, this was not a TV commercial. It was a viral video distributed online that exploded into a pop-culture phenomenon. It's all part of an overall campaign by Dove to change the definition of beauty and increase women's self-esteem.

The deeper Dove goes with the campaign, the further from advertising it gets. In the latest twist, Dove is actually funding a major motion-picture, a remake of the 1939 classic "The Women" that will star Meg Ryan and Annette Bening and be directed by Diane English. The film just started shooting in August and will be released next year. Chances are you won't see Dove products in the movie. But you should expect to see exclusive interviews with stars of the film on Dove's Web site, along with bonus footage and other goodies you won't get anywhere else. All of it advances the theme of empowered women and in theory at least provides a rub-off benefit to Dove -- and sells more soap. Talk about subtle.

In one of the most ambitious attempts yet in original content, Anheuser-Busch, the leading brewery and bottler of Budweiser beer, earlier this year launched its own video network on line, called BudTV.

Anheuser-Busch invested a reported $30 million to introduce what is essentially its own TV network online. It hired top comedy writers from "Saturday Night Live," well-known on-air personalities and Hollywood production companies to create original shows such as "Replaced by a Chimp," in which monkeys attempt to do jobs normally handled by humans, repairing computers or even creating ads. There are talk shows and sports shows and science-fiction shows, most of them only several minutes long.

What they all have in common is one thing: They're not beer commercials. Characters don't walk around guzzling Budweisers or seeking an icy cold beer as a reward for a job well done. Instead, the idea was simply to give the brand a sense of cool that comes from connecting young consumers with entertaining content. As The New York Times wrote in a lengthy magazine article back in February, "BudTV represents Anheuser-Busch's search for a toehold in a world where the traditional advertising model has been sideswiped by technological change and the proliferation of entertainment choices."

Now before I go any further, I should mention that Bud TV doesn't seem to be working. In fact, it's largely considered a failure in terms of bringing in an audience, and Anheuser-Busch doesn't really even like to talk about it although it's still on the air. The common wisdom is that there are two reasons for its struggles. The first is that you have to register to use the site, a step the law required of Anheuser-Busch to ensure that only consumers of a legal drinking age could get to the site. This obviously turned away a lot of the potential audience because so many people don't want any kind of wall between them and the content. The second mistake Budweiser seems to have made was in aggregating all of its content in one place rather than distributing it where the viewers already are, through outlets such as Youtube or other video-sharing sites.

But while BudTV has struggled as a network, few have interpreted that as an indication that advertisers should avoid original content. And in fact it's a safe bet that Budweiser will remain in the content creation business even if it eventually abandons the network.

Permission to fail
Which brings up another important point, one I call "permission to fail." With all of the changes in the marketing and media business right now, it's important that companies encourage risk-taking and experimentation, and to do that they have to accept the inevitable failures that will come along with it, be willing to learn from those mistakes and continue to fund the untested. Failure needs to be not just tolerated, but embraced as a necessary investment in long-term success and the creation of new marketing models.
Grey Goose and the Sundance Channel have created 'Iconoclasts,' a series in which the renown interview the renown.

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Another way that a leading alcoholic-beverage company is getting into the content creation game is Grey Goose vodka's partnership with the Sundance Channel, a TV network backed by Robert Redford dedicated to promoting independent films. They co-created a TV series in which accomplished people from many fields -- including artists, chefs, business innovators and actors -- interviewed other accomplished people. Simple and compelling. It had nothing to do with vodka, but everything to do with positioning a brand.

In an age when consumers don't want to pay for content -- in fact some of them steal it -- branded entertainment perhaps can play another useful role: Reminding audiences that advertisers don't just interrupt their media consumption but actually subsidize it. Their investments fund the content, and while I don't expect audiences to actually thank advertisers, they may at times appreciate a sponsor for helping to bring a certain film or TV show into being.

I've talked a lot about subtlety, and in the early days of branded entertainment, being subtle was the golden rule. But that's not always true these days, and that may not always be a bad thing.

Burger King is a perennial also-ran to McDonald's in the fast-food wars. But the burger chain has gotten a lot of buzz and seen a lot of sales success in the last few years with a series of product introductions and marketing stunts that have been anything but subtle.

While McDonald's targets mom, Burger King is putting all of its focus on the teenagers and young males who are the biggest consumers of their product. That has expressed itself in everything from the King character, a creepy anti-Ronald McDonald, to the menu -- which emphasizes meat, cheese and bacon -- to an irreverent marketing campaign that has included the infamous Subservient Chicken Web site.

Burger King has also ventured into branded entertainment, and it has definitely ignored the golden rule of subtlety. It also ventured beyond the film, TV and music businesses by launching a line of video games. Video games, of course, have also become part of the Madison &Vine landscape. Many racing games now sell billboards on their virtual racetracks to real-world advertisers so that ad messages flash by as the cars race around the screen.

Burger King went a step further. Again, rather than just insert their logo into a game created by someone else, Burger King decided to create a series of video games through a co-production deal with Microsoft's Xbox division. The games were designed around its brand icons and sold through its stores, not given away as premiums with kids meals.
Burger King eschewed straight brand integration into a video game to instead develop a game for its iconic King character.

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Now what about results? In the first five weeks in restaurants, Burger King sold 2.5 million copies of the video games, vaulting them into the top 10 best-sellers. The chain also reported double-digit increases in foot traffic during the promotion.

There are literally dozens and dozens of examples of branded entertainment initiatives by major marketers involving original content creation. And they take on just as many forms. Harley Davidson is doing product placements in a comic book. Procter & Gamble is funding comedy concepts. Kraft is producing a show called Chef to the Rescue, offering solutions to time-pressed moms. And Volvo is running an original series on Microsoft's MSN online service about a dysfunctional driving school that also serves to highlight its safety postioning.
Volvo is running an original series on Microsoft's MSN called 'Mr. Robinson's Driving School.'

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Learning to be platform agnostic
In the digital age, the distribution platform isn't what ultimately matters. Distribution is ubiquitous, and smart marketers are platform-agnostic. What they want is eyeballs. Audience engagement. Good content. And results that move the sales needle. These are the new measures of Madison & Vine.

They also need the right partners, and more advertisers these days are avoiding those shady middlemen who popped up a few years ago in favor of partners whom they trust and who have a track record of delivering results. Sometimes that's their creative agency, sometimes a talent agency. More often, it's their media agency, which knows more about content production and has ties to studios and networks. It is worth noting that creative agencies were almost totally sidelined a few years ago, when the focus was on long-form programming. But the rise of online video plays to the agencies' strengths since they know how to tell complicated stories in a short format.

Still, moving from concept to execution remains a tough challenge in branded entertainment. Hollywood and the advertising business don't completely trust each other yet. And as we discussed earlier, the lack of established benchmarks and guidelines in this sector can be a weakness as well as a strength. How do your structure a deal? How do you put a value on it? How do you determine return on investment? How do you share costs and profits? Do advertisers even belong in the content-production business? All of these questions translate into continued tension.

The Wall Street Journal recently wrote a long behind-the-scenes analysis of a pretty cool branded-entertainment venture involving MTV and Axe brand deodorant, which is positioned essentially as a product that helps young men to attract young women.

Axe and its ad agency, Bartle Bogle Hegarty, teamed up with MTV to create a new reality-TV series called "The Gamekillers" in which a young man tries to keep his cool while a series of annoying characters interrupt his date with a woman. These characters include "The Drama Queen," a friend of the woman he's trying to win over who flies into hysterical fits, and "British Accent Guy," a smooth-talker who tries to move in on the girl.

On paper, this is a perfect marriage of content and commerce. The idea behind the show is entertaining and the connection to the brand is relevant. The actual involvement of the brand in the program is minimal so it doesn't get in the way of the entertainment, but clear enough that fans of the show will get the association and Axe will get the ruboff benefit of being seen by young men as a cool brand that fits into their lifestyle.
Axe teamed up with MTV to create the reality-TV series "The Gamekillers."

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As I said, this deal made sense in every way. Yet according to the Wall Street Journal's inside peek, it took more than two years to come to fruition. And during that time, Axe and its partners squabbled over every detail, from the format of the show to the role of the product to the timing of a related ad campaign. And the company had to turn to multiple partners, including an ad agency, a media buying agency, a production firm, a public relations agency and a talent agency to pull together all the moving parts.

Was it worth it? Well, the show seems to be a modest hit and Axe sales were up 60% last year. So the answer is probably yes. In the Wall Street Journal article, a top Unilever executive is quoted saying, "Almost every major brand we have has some type of content play" in development. But the two-year process also indicates how much time, energy and resources the deals can drain out of an organization.

'Get me one of those'
It's enough to make a marketing director long for the days when they could buy a schedule of 30-second prime-time ads, toss in a few print and out-of-home elements and call it a campaign. But those days, of course, are long gone.

We've moved past the age of interruption, and even past the age of embedded content and into a model of engagement.

The biggest long-term challenge to branded entertainment will be to prove that it is a sustainable part of the marketing mix and not just a fad. The danger is that some marketers are getting involved in branded entertainment because it seems to be the place to be. I call it "Get Me One of Those" Syndrome, and it happens when a chief marketing officer decides he has to do something because he read an article about it in Ad Age, or heard about it during an industry conference or because his friends on the train home are talking about it.

These executives go to their agencies and say, "Get me one of those." There's no strategy behind the decision, and no thought on where it fits in the total marketing plan. In that case, these deals become one-offs that typically aren't well thought out and thus don't work. And that helps to undermine the credibility of the discipline.

So while I'm reluctant to recommend that we build too much of a box around this business, it would help to have some clear examples of sustainable business models, a sense of best practices and benchmarks for success.

And again, we can't forget the consumer. In the end, this is all about their choices and whether they choose to give your brand the time of day.

The best way to summarize all of the things I've just laid on the table is to boil it down to what I see as the five key challenges facing this business, which I would define as:
  1. The need for clearer definitions of what branded entertainment is -- and what it isn't. Such a framework will allow clients, who can be skittish about the untested, to take branded entertainment more seriously as a strategic offering.

  2. The next crucial area is measurement. It's true that the metrics surrounding most forms of advertising can be a squishy science, but the current methods that exist for tracking and evaluating product integration are particularly so, and are another factor in marketers' giving the discipline less credit than it deserves. The ROI on branded entertainment can't be measured based on variables such as how long a product appears in a particular scene, yet that's the kind of approach we've seen so far. It's important for key players to get together to find solutions to show marketers what they're getting in return for their investments.

  3. The next challenge I'll call creative evolution. With any medium, the ads that work are those that start with an insight, show an understanding of their target audience, and have an authentic, relevant connection to the brand. For branded entertainment to survive and thrive, it can't deviate from that. As clients get deeper into the business of developing original content, they have a responsibility to put entertainment value first, and to be transparent and honest with consumers while offering something of value. I believe audiences today don't care where their entertainment comes from; they care about the quality of the content they consume.

  4. Collaboration also remains a significant challenge, although one where there has been great progress. The increase in the number and variety of potential collaborators represents great possibilities to bring thinking and talents to the table that may have been missing or underused. But who's in charge? Not addressing the lead-dog issue can cause problems. It can create an atmosphere that's more competitive than collaborative, and lead to turf disputes that will do nothing but bog down the process. It's up to each brand to decide who their lead partner should be, or to accept the responsibility for marshalling the efforts of a disparate group of partners.

  5. Ultimately all of these challenges come down to one major one: the need for respect. How can a practice that has evolved so quickly and been used by so many major marketers still be seen as something of a novelty? This is where our discussion gets circular, because the answer to that question depends very much on addressing the first four challenges. If we get industry standards, proof that investments can move the sales needle, higher-quality creative executions and true collaboration -- combined with respect for audiences -- it will be easier for advertisers to see how branded entertainment fits into and compliments their other marketing efforts. It will lead to dedicated budgets and resources and sustained campaigns and sales success. And that will bring respect.
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