John McCarus Discusses a Rapidly Changing Media Landscape

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Who: John McCarus, VP-creative and business development for Alliance, a WPP-owned branded entertainment firm based in New York.

Why you need to know him: Mr. McCarus develops branded entertainment initiatives for a number of brands owned by Procter & Gamble Co., as well as for office supply chain Staples, toymaker Hasbro and fast-food chain Taco Bell, among others.
John McCarus is VP-creative and business development for Alliance, a New York-based branded-entertainment firm.

Credentials: Mr. McCarus previously spent 10 years in magazine publishing, serving as associate publisher at consumer titles like The New Yorker and Rolling Stone. Before that, he was involved in launching Conde Nast’s corporate sales and marketing team in the mid '90s, where he helped pioneer many of the branded entertainment programs that are now commonplace in the print media world.

Who are your clients? “We represent several brands at Procter & Gamble and do project work for a host of others including Taco Bell, Hasbro, Motorola, the Blue Star Jets, Dannon and Staples.”

What types of branded entertainment projects has Alliance recently put together? “We are currently working on a Nascar film partnership to extend the Nascar footprint for Old Spice; a PC-based video game integration for Staples, complete with detailed storefronts designed in-game; and a network TV integration deal for a national restaurant chain. We also see significant action in the music space, coming on the heels of the 2005 Music Upfront Conference. We are currently developing five programs for different brands in the fragrance, beauty, feminine care, toy and telecom categories that range from talent endorsements to interactive music community development to exclusive content and live event programming.”

With a client like P&G, you’ve got a lot of strong brands to work with and -- even better -- a company willing to spend money on nontraditional forms of advertising. Does size really matter when it comes to which companies are willing to develop branded entertainment ? “Size does matter but content providers are getting savvier about how they define it. Increasingly, they understand the value of exposure at retail and via massive distribution networks. Artists and programmers realize that P&G can deliver this and the company is responding. P&G has over the last two to three years adopted a very aggressive approach to understanding and leveraging nontraditional marketing solutions at the brand level. Increasingly, we see young, sophisticated brand management teams that understand the need to marshal a broad array of assets in order to maximize their partnerships in the entertainment space. You’re going to see some really synergistic programming start to take shape over the next year in stores, on packaging and online that will be backed up by innovative entertainment-based partnerships. It’s exciting to see it evolve.”

You’ve been in the business for awhile. Has putting these types of deals together gotten easier over time? What’s changed? “I think it’s actually harder for a couple of reasons. The playing field is constantly shifting. If you look at network TV, we’ve seen a seismic shift beginning with the last upfront as networks scramble to retain control of the integration process in an attempt to monetize the revenue stream. That makes it a lot harder to attach a brand to a project upstream. We think you’re going to see fewer advertisers in the TV integration space as the price of entry skyrockets from a media standpoint. What you will see are multiple integration efforts among the top-tier network advertisers. The second reason is that brand managers are always raising the bar in terms of innovation in this space. They want new, next and different, and they are increasingly more comfortable with the risk associated with something new. At the end of the day, everyone realizes the stakes are huge and so we all keep pressing forward.”

First it was pretty much product placement. Now brands are getting more actively involved in producing projects. How much farther can advertisers go with branded entertainment? “I think we’re going to witness a shift now that the novelty of shows like 'The Apprentice' is wearing off. Nearly every brand in the space is on the lookout for the next 'Apprentice' model. If it were that easy, we would just dedicate our whole staff to doing deals with Mark Burnett. Now the smart brands are making a renewed commitment to investing in the organic relationship that gets built over time. We think brands will continue to test and learn and get smarter. But real growth is driven by real results and no one has all the answers. It’s incumbent on all of us to experiment and track. That’s one of the reasons we focus as much on the off-air cross-promotions as we do on the on-air content.”

Is there one medium -- TV, film, music, the Internet, video games -- that advertisers are leaning toward more over another? “We think you are going to see enormous growth and innovation in music and in gaming. All of the key factors are there: The content producers really value brand partner assets and are not bound by conventional thinking. Music is currently our most active entertainment genre with gaming heating up quickly.  We have seen a big drop-off in activity in the feature film space. The good news is that the feature film business is in trouble. And with trouble comes change and opportunity.”

How do you measure success? “We work hard to craft retail and interactive tie-ins that allow us to measure consumer involvement. Unless you are launching a product on shelf that debuted on prime time the night before, brands really value these measurement tools the most.”

There is still some confusion as to what exactly branded entertainment is. How do you define it? “It’s a question worth asking. While it often starts with a sexy content marriage, this business is like an iceberg. Most people just see the 10% of a deal that makes it sexy, but it’s the 90% that you don’t see that makes the formula work. A lot of people are not interested in hanging out in Bentonville to negotiate end cap displays or managing a tour bus in Tempe, Ariz., with 10,000 samples in the trailer, but this is what really makes this space sing.”

What are some of the best examples of branded entertainment you’ve seen? “I love the Geico spot featuring Tony Little. I think we’ll see more of these. Why can’t we put Crest White Strips in a print ad featuring Ray Ban sunglasses? Everyone wins. In music, we love what Boost Mobile has done with Kanye West and Ludacris. There are some really smart programs in the interactive space particularly with MySpace.com.”

And the worst? “I think the TV series The Restaurant still gets my vote.” 

What are some issues that must still be dealt with when it comes to branded entertainment? “How to value the premium of integration over the cost of straight media remains a debate. Nielsen just realized some really smart research in the video-gaming space that establishes a pervasiveness index. We think they are on the right track.”

What’s on your TiVo? “Any awards shows I miss, like the Vibe awards, video-gaming awards, country music awards. Brands tend to really take risks with one-shot programming opportunities like awards shows.”

What do you do on your downtime? “I was the oldest guy by a factor of three at the CPL Videogaming finals in New York City two weeks ago. When I am not chasing new media, I am likely to be wiping vomit off my shirt; we have an 8-month-old baby girl.”
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