Boutiques Ambivalent About Branded Content

Indie ad shops meet with mixed results

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%%STORYIMAGE_RIGHT%% In this age of consolidation, thriving as an independent ad agency has become more challenging than ever. While some of Madison Avenue's premier creative shops such as Bartle Bogle Hegarty, Crispin, Porter & Bogusky, and Goodby, Silverstein & Partners have managed to keep their creative souls intact while availing themselves of the resources and backing of their respective holding companies, there still exist legions of boutiques that are going it alone.

And with most traditional ad agencies still focused on the :30 commercial, will small boutiques leverage branded entertainment as a defining point of differentiation and a hedge against the embattled future of media advertising?

Many creative boutiques have become involved in the space to varying degrees but cracking the branded-entertainment code hasn't been easy or lucrative.

Creating saleable branded content is not the only challenge. Branded entertainment does not provide agencies with the level of remuneration found in the traditional ad business.

NEW FORMULA

Michael O'Callaghan, partner in New York's Union, thinks he has a formula. The shop has created a 22-minute sitcom involving Plato, a blue alien featured in Sony electronics ads who comes to Earth to attend college. Shot with a puppet, the live-action project is being shopped to the networks. "We get paid to create shows as a marketing vehicle," he says. If a project hits the big time, "we get a percentage in case of distribution." Odds, of course, are against catching lightning in a bottle, so Union continues to get the bulk of its income from traditional advertising. Clients include cable networks, Comedy Central and the National Geographic Channel.

O'Callaghan adds the cost of producing the sitcom is similar to the price of a :60 spot, and even if the sitcom doesn't ultimately fly with the networks, it could have online or other media applications, a plan that helped the shop sell "Plato" to Sony.

On the other hand, The Concept Farm, also based in New York, is placing much of its bets on the viability and future growth of branded entertainment. Hank Wasiak, a former McCann-Erickson executive whose title at the shop is "wisdom farmer," says the agency is working on ESPN's 25th anniversary. Interviews saluting fans will become woven into the shows, and perhaps become a show in itself, he says. The shop also is exploring an area Wasiak dubs "content of consequence," which would involve lining up corporations for programming as a form of cause marketing.

Still, the wisdom farmer isn't finding money growing on trees. "The downside is the long gestation periods to some of this stuff—you have to have patience and perseverance," he says. "We make a reasonable margin on it," he says, but salaries are lower than in the traditional business and "it's not as lucrative yet."

Other shops are trying to evolve ways of enticing marketers. Red Ball Tiger, a San Francisco agency that built its reputation on ads for former client, discount retailer The Men's Wearhouse, is pushing a new meaning for ROI. Instead of return on investment, President Gregory Wilson is calling it return on involvement, a proposition that would allow marketers to pay when ads are viewed by an attentive audience, such as those electing to watch a TiVo showcase.

NAYSAYERS

While naysayers may accuse Wilson and his brethren of having swallowed the branded content Kool-Aid, he defiantly clings to the belief that results will come for both marketers and for shops toiling in the field, particularly now that Rupert Murdoch has put his muscle behind DirecTV, a move likely to speed up viewer control of the programs and commercials. Wilson insists marketers will become more receptive now than before to branded entertainment.

"It's not a matter of if, it's a matter of when," asserts Wilson, adding that he expects within days to announce the signing of a major client. It couldn't come at a more opportune time as Wilson tries to infuse some life and energy into a struggling operation that recently suffered the departure of his partner Bob Ravasio, who has soured on the space.

"There has been more failure than success" in the field, Ravasio says. "Consumers are suspicious, especially young people. They really laugh at it." Ravasio is now a principal at Branuity, a strategic consulting firm in San Francisco.

%%PULLQUOTE_LEFT%% Patrick Madden, partner in Banjo Strategic Entertainment, San Francisco, also believes "things are looking really good" for branded entertainment, with his agency picking up a number of pieces of business from unnamed package-goods marketers who are paying development fees. "There's a lot of opportunity to be realized," he says. "Every client has some strategic initiative going on," he says.

Business is so good, in fact, Madden says the shop no longer has to take on ad work to keep the lights on. Madden and partner Ron Walter were the creative forces along with Tattoo DDB in Chicago on last year's Unilever-funded NBC reality sports special "Degree Road to the Ironman."

Still, others aren't convinced. Doug Cameron, strategy director and co-founder of Amalgamated in New York calls branded entertainment "an area we would like to explore." But he says, "I'm a believer in the 30-second commercial and people are spending more and more for those spots." In fact, he says the good old days of the ad biz are looking better all the time. "We always joke about bringing back the three-martini lunch," he quips.

But as the media marketplace evolves at a dizzying rate, more people seem focused on the future and not pining for the past. As we went to press, New York-based Margeotes Fertitta + Partners, like Crispin, affiliated with MDC Corp., announced it was launching a new entertainment marketing and production company.

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