How Madison & Vine Moved to Silicon Valley

With Web Video on the Rise, Brands Are Increasingly Creating Their Own Digital-Entertainment Properties

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LOS ANGELES ( -- If you're looking for the intersection of Madison Avenue and Vine today, you're more likely to find yourself somewhere in Silicon Valley.

When Madison & Vine made its debut in Ad Age in 2004, branded entertainment was still somewhat of a novelty to many sectors of Hollywood and the ad community. Cut to 2010, and the connection between brands and entertainment is cemented, and a robust ecosystem has flourished.

BIG SCREEN HITS THE WEB: Breyer's 'Smooth & Dreamy.'
BIG SCREEN HITS THE WEB: Breyer's 'Smooth & Dreamy.'
Today, brands are increasingly seeking to develop proprietary content and in some cases are becoming media producers on their own. This innovation is taking place on the web, and the key players producing original branded content come largely from outside of Hollywood's circle of A-Listers.

Efforts from stalwarts such as ABC Studios, Turner and United Talent Artists have folded, and a crop of mostly digital branded-entertainment shops has grown in their place. The web has emerged as the biggest breeding ground for branded entertainment, as sponsored web series crop up by the dozen.

What killed off some of the first entrants into the space was the belief that the web could be like TV, at least economically, and that eyeballs would naturally follow. But producing TV-like projects with six- and seven-figure TV-like budgets without sponsors or a network to offset the costs upfront quickly became unsustainable. Now, brands and producers are partnering earlier and more extensively than ever, with marketing budgets often replacing the thumbs-up from a network executive as the new greenlight.

New class
Perhaps nothing illustrates this better than the influx of production companies and branded-entertainment divisions at media agencies and the TV networks that have cropped up to develop and distribute these new webisodes -- from the MSNs, Yahoos and MySpaces of the web-portal world to indie production companies such as Jordan Levin's Generate, "Lizzie Maguire" creator Stan Rogow's Electric Farm, Michael Eisner's Vuguru or Ashton Kutcher's Katalyst to recent online forays from established TV producers such as Reveille, Endemol, Fremantle and Magical Elves.

Even PR firm Edelman recognized the web as an emerging destination for branded storytelling -- in 2006, it acquired production company Matter Entertainment to develop projects for its marketing clients that could accomplish more than any press release.

Nathan Coyle, an agent in Creative Artists Agency's digital media group* who helped kick-start the next wave of sponsored web video by introducing brands into YouTube's "LonelyGirl15" series, credits the 2008 Writers Guild of America strike as a point of motivation for these new players.

"When you can't do your job, it accelerates your creativity and the metaphorical and actual bandwidth to create these new projects," he said. "We learned with shows like 'Quarter Life' [on MySpace] that the publishers aggregating the eyeballs aren't equipped to manage talent, so if you're going to find the money to make these shows, you have to go straight to the advertisers."

Keeping up with Madison & Vine online
Madison & Vine, Ad Age's original cross-section of the New York ad community and Hollywood, will be taking a broad look during the next year at the key players, projects and platforms in the digital branded-entertainment arena. Whether it's keeping tabs on established players, checking in with the media agencies and marketing firms that continue to staff up their branded-content divisions or profiling the newest studios and media companies entering the space, check in with M&V on for reporting from the frontlines of the friendly war between content and commerce.
It's difficult to quantify the exact figure spent on such deals. PQ Media estimates branded webisodes and in-game advertising, or advergaming, grew 15.1% to $306 million in 2009, with the web accounting for a small, additional chunk of the $3.95 billion spent on product placements last year. If Madison & Vine was about collaboration between marketers and media companies, then this new digital stage is about control. "Five years ago, the content creators were reluctant to collaborate; they didn't see the brands had any place in the conversation with networks," said Scott Donaton, who launched Madison & Vine and wrote a book of the same name in 2004 while editor of Ad Age. "[On TV], there's a lot of objectives the brand has no control over. In the digital space, you can work the other way to develop and design the content and control the audience. Now you have a chance, as a brand, to meet your objectives and find your audience."

Overwhelmingly digital
In his new role as CEO of Ensemble, a division of Interpublic Group of Cos., Mr. Donaton oversees branded-entertainment projects for media agencies Universal McCann and Initiative, and estimates 60% of the new-business pitches he receives from clients are for digital projects, while 35% are for TV and the remaining 5% for music and film.

For some, investing in digital content is a post-recession efficiency play. It's possible to delve into digital content for the same or often less cost of 30-second TV commercials. One branded-entertainment veteran said productions can cost as little as $20,000 or as much as several million dollars, depending on the number of locations, the quality of the video production and the cost of the talent. Although A-list stars aren't paid TV-level fees for their web work just yet, they're often earning paychecks "well into the six figures," said the executive.

Pepsi is leading the charge of marketers investing heavily in web video as an alternative to TV. That's Pepsi behind the sponsored "Blue Room" in the just-launched "If I Can Dream," a live-streaming talent competition from 19 Entertainment, producers of "American Idol" and "So You Think You Can Dance," and Mtn Dew behind the MySpace/Paramount digital series "Circle of Eight." Up next: an animated series for Sierra Mist and collaborations with IAC's CollegeHumor and Electus, the production company created by former Reveille producer and NBC entertainment chief Ben Silverman.

As Frank Cooper, Pepsi's chief consumer engagement officer, put it, "Yes, more money is moving into digital and should move into digital, but we have to maintain a healthy budget on TV. However, you should push that TV button at the right time in the process for communicating to consumers -- it should not be your default switch."

Breakthrough hits
Unilever, along with media agency MindShare Entertainment, has produced what have arguably become web video's biggest branded success stories. It started in 2007 with "In the Motherhood," an MSN series created for Suave and Sprint starring Chelsea Handler and Leah Remini that eventually became an ABC sitcom, or "The Rookie," a "24"-themed series for Degree that also aired during the Fox series, both produced with Santa Monica, Calif.-based Science & Fiction.

More recently, its projects have become 30-second spot/webisode hybrids, pairing celebs such as "30 Rock"'s Jane Krakowski with Breyer's Ice Cream ("Smooth & Dreamy"), Megan Mullally with I Can't Believe It's Not Butter ("Turn The Tub Around") and Marisa Tomei with Bertolli Pasta ("Into the Heart of Italy"), all in the name of using TV as a push to original content on the web.

Suave and Sprint's 'In the Motherhood'
Suave and Sprint's 'In the Motherhood'
"The wonderful component of digital is that there's an unbelievable amount of tracking and monitoring of consumer engagement," said Rob Master, director of media for Unilever North America, which has been active in the digital space since 2007, when it launched "In the Motherhood." "We're looking at everything from time spent to where users are viewing the content on our site, our partner sites and the rich-media units themselves, to length of time of these webisodes or entertainment shorts. There's really no clear-cut answer, yet other than it depends on the brand, objective and target. But we're starting to understand how much time a guy wants to spend with short-form content vs. a woman, and that insight is helping us."

There have been casualties along the way. Many web shows are sitting on the shelves of digital studios waiting for an advertiser to rescue them. Meanwhile, sponsor budgets and renewals for existing projects came in later and smaller than most companies could afford -- if they came at all. Startups such as Mania TV and Ripe Digital drained their venture funding while waiting for advertisers.

"If you think about the videos that do well online, it takes time to develop that audience," said Albert Cheng, ABC's exec VP-digital media, of Stage 9, which distributed two series, "Squeegees" and "Voicemail," before folding. "It could also very well be the nature of the content we were putting on. People weren't ready for that type of production quality."

Keeping at it
That doesn't mean they're not ready for TV talent on the web. The web's few major success stories -- Joss Whedon's "Dr. Horrible's Sing-Along Blog," Marshall Herskowitz and Edward Zwick's "Quarter Life" and MSN's "In the Motherhood," directed by "30 Rock" and "Roseanne" veteran Gail Mancuso -- were all the direct results of having proven storytellers., for its part, took its learnings from Stage 9 to focus on creating web spinoffs of popular on-air shows such as "Ugly Betty" ("Mode After Hours"), "Lost" ("Dharma") and "Grey's Anatomy" ("Seattle Grace On Call").

And not all the big networks and studios have given up. NBC, meanwhile, has been leading the charge of TV networks fully invested in creating original digital content, recently attracting sponsors such as Hidden Valley Ranch ("Garden Party"), American Family Insurance ("In Gayle We Trust") and Nestea ("CTRL") and name talent such as Jennie Garth and "Arrested Development's" Tony Hale.

Fox recently hired comic-book veteran Roger Mincheff to run its branded-entertainment division and develop projects for News Corp.'s digital entity. CBS is expected to put a larger stake in the game in the near term, and Viacom's has been doubling as an in-house studio to develop branded content for Comedy Central, Spike and for brands such as Ford, Sony, Intel and Trojan condoms. Even young-male-targeted planted a bigger stake in the game last year when it acquired HBO's digital studio after the pay-cable network struggled to find sponsors for its digital series.

"Four years ago, clients were dipping their toe in branded entertainment. Now we're at the lessons-learned stage," said David Lang, president of MindShare, the WPP agency that produced many of Unilever's webisodes, and created 14 projects in 2009 alone. "It's very important to not just have the touchy-feely soft data points but verified proof that we're meeting our clients' goals and objectives."

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CORRECTION: An earlier version of this story incorrectly stated Mr. Coyle's title.

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