Entertainment Epiphanies1 Jul, 2014 By: Patrick Cauley Response
For years, advertisers have contemplated strategies to survive DVRs, but with news of cable mergers and entertainment startups emerging faster than we can even grasp their trendy names or lingo, it’s prime time to think well beyond cable, DVR — or even the traditional TV set for that matter.
When it comes to the entertainment space, shifting eyeballs and evolving viewing habits aren’t up for debate anymore — it’s happening. In fact, video streams increased to almost 600 million in 2013, which is up 158 percent year-over-year. And, the majority of streams are viewed on mobile devices, with tablets producing the most views at 42 percent, according to comScore and the Adobe Digital Index. Those in the entertainment industry have certainly taken note.
“I think the industry as a whole is changing where people want to watch what they want to watch when they want to watch it — and that doesn’t include advertising. People don’t want to watch traditional commercials,” says Ryan Schiavo, an entertainment industry executive who was most recently head of production for Herzog & Co., an Emmy® Award-winning entertainment company and a leading marketing and creative content producer based in Los Angeles.
Therefore, in order for any brand or marketing campaign to be successful, these shifts in consumers’ entertainment consumption habits need to not only be taken into account, but they need to be integrated into your strategy.
Concurrently, marketing spend has been shifting, as well. Digital ad revenues hit $12.1 billion in fourth-quarter 2013, and full-year revenues were $42.8 billion, beating broadcast TV for the first time, the Interactive Advertising Bureau (IAB) recently reported. Mobile ad revenue in the same timeframe hit nearly $7.1 billion, doubling from last year’s $3.4 billion. Moreover, digital video also grew significantly to reach nearly $3 billion. Even though we’re exploring somewhat uncharted territory, it’s clear that certain marketers and brands are finding their way and staking claims.
“The reception from brands is growing because clearly they’re seeing falling numbers in traditional media as far as readership and viewership, and they’re seeing growing numbers in online and mobile viewing,” says Perry Smith, CEO of Australian-based brand new media (BNM), a digitally focused branded entertainment pioneer. “They can’t argue with the numbers. I think what brands are struggling with is the traditional message that they wrapped around traditional broadcast is not effective in the digital environment. That means they need to escalate the ability to create content that fits the needs of their consumers.”
And, while not all brands and marketers are adapting as quickly, others are paving the way with new, innovative solutions to reach consumers.
One company that is changing the game is Delivery Agent, a market leader in turning TV viewers into customers for more than 350 of the world’s leading global brands. In fact, H&M utilized Delivery Agent’s T-commerce platform to shop-enable its 30-second Super Bowl XLVIII ad featuring David Beckham.
“We leverage multiple platforms to engage customers and drive commerce. By combining strategies including direct response, social media, E-mail marketing, mobile and search management, we help our entertainment clients capture an audience that is willing and able to buy,” says Kris Johnson, vice president of business development for Delivery Agent. “We also use drivers, such as in-show mentions and limited edition items, live props from the set and other one-of–a-kind specialties to increase urgency and brand awareness. Lastly, allowing consumers to use their television to start a transaction or an additional information request directly from their remote gives our clients the opportunity to offer a truly frictionless and contextual experience.”
However, the Super Bowl is one of the lone exceptions where a massive audience is still actively engaged with traditional TV ads, rather than viewing them as an interruption of their entertainment. “The reality is, large audiences cost large amounts of money, but they’re not all necessarily engaged in your product offer. So, you need to put your product offer where the audiences are engaged in the content and doing something,” says Smith.
The beauty of it is that consumers are not opposed to branded or sponsored content as long as it’s engaging and relevant to them.
Smith adds, “We’re seeing brands watching broadcast and online video content moving more of their consumption to mobile and online device viewing. And in that space, we’re seeing consumers spending more time with that content and having a closer understanding of the product and offer that’s going along with that content.”
Thus, many brands and products are now moving away from being background noise and attempting to be in the foreground of consumers’ attention with strategic, smart branded content.
“Brands are trying to create content that people want to watch as opposed to just making content that people have to watch in between shows or whatever they’re watching. To get people to watch something because they want to watch something — with your name attached to it — and then they associate the good feelings about what that content was with the brand? It’s a much more powerful and effective way of creating brand loyalty,” says Schiavo.
If Content is King, Content Distribution is King Kong
But, how exactly do you pluck the Mad Men out of Madison Avenue and make them go Hollywood while still inciting loyalty or response from the consumer?
“The first piece for us is the notion that brands need closer engagement with the content rather than just disrupting the content,” says Smith. “What consumers are looking for is compelling content that is entertaining, inspiring and informing. So, they’re always on the hunt for that. What brands are looking for is to engage with those consumers who are absorbing that content and then relating that content to an offer or service that those brands can deliver. So, for us, what we’re all about is turning brands into broadcasters and allowing the content to be far more engaging so that the brand activation piece is much stronger.”
He contends that the biggest reality check for traditional media players is that they’re dealing with consumers, not viewers. “What that means is that the consumer is now in control of their programming habits. So, a program director from a traditional network has lost a little control. That control mechanism has definitely fallen back to the consumer, and the consumer has an enormous amount of choice now about where they get their content,” he says.
And while Apple TV, Hulu Plus, Amazon Prime and countless others platforms are making waves, no one seems to making quite a stir like Netflix, a company many people attribute to be the catalyst to Blockbuster’s brick-and-mortar downfall. It has created a direct-to-consumer model for entertainment.
“They don’t necessarily rely on the same metrics that most of the major networks do. And they’re not centered on advertising dollars; they revolve around subscriptions. So, they don’t necessarily care how many people watch their shows, and that’s really why they don’t release viewership numbers,” says Schiavo. “They care more about the buzz surrounding a show. So, take ‘Orange Is the New Black.’ It doesn’t really matter how many people are watching it — it matters how much buzz it’s getting on the Internet and how much people are talking about it and telling their friends that they should watch it. That’s what matters to them because it drives up subscription sales. So, in a traditional model, when you’re selling things on TV, the industry is geared towards making people sit there and watch every single week because they want to sell advertising revenue and that just doesn’t exist in Netflix.”
If the Netflix-style model continues to find consumer success as traditional broadcast viewership wanes, advertisers must explore new ways to get their content in front of their targeted demographic.
“Like most industries, entertainment marketing has seen a shift in how to best engage consumers and drive revenue. Having a great property is no longer enough — marketers need to have a comprehensive approach to truly engage an audience. We have seen a shift from a direct-to-consumer environment with almost nothing more than an E-commerce engine to a landscape that now includes various social avenues, connected television, contextual advertising and more savvy buyers,” says Johnson.
Johnson explains that the Delivery Agent model is based on contextual advertising — knowing what the consumer is interested in and presenting them with items that appeal to them. “By partnering with industry leaders like Samsung, our technology platform can recognize content on the television and present related items,” he says.
For its part, BNM believes in the “TV Everywhere” mantra. TV Everywhere services were developed in an attempt to compete with the market trend of cord cutting, where consumers drop traditional pay television subscriptions in favor of accessing content exclusively through over-the-air television and/or online on-demand services, like Netflix.
“We’re broadcasting our branded programming on traditional media, and we’re driving our short-form video into all the digital environments via our own proprietary player, channelPLAY,” Smith says. “ChannelPLAY really is a proprietary distribution platform that allows the content to be housed and stored in one environment and then served to our broadcast partners, our traditional partners, our own digital channel, or to our digital partners. So that content piece can be served to any video network on any connected device.”
Knowing you want to produce and distribute engaging content is a no brainer. However, the real trick is knowing what kind of segments and time durations are most effective for various devices and product categories.
In fact, more than 60 percent of consumers will spend at least two minutes watching a video that educates them about a product they plan to purchase, while 37 percent will watch for more than three minutes, according to the U.S. Digital Video Benchmark.
“What we know from the content that we’ve produced for our brand partners is that we’ve got a massive growing appetite from consumers to take a lot more shorter-form content on mobile. So, when we first started, we thought longer-form — maybe above five minutes — could be effective on digital, but we’ve seen that to be not as effective,” Smith says. “In some cases, it’s almost by category. If it’s a health-related product, they want a shorter piece of content. They want anything from 60 seconds to three minutes of content, and then engagement starts to wane after that. If it’s food, it can be longer because the recipe engagement is there. We can drive a piece of digital content for five minutes, and we’re still going to have engagement across that content.”
So, is there a sweet spot for digital content length? “Four minutes is around the kind of max zone, unless it’s lifestyle- and story-related. It’s really about the back-end story, and it’s a real piece about someone who is having a problem in some area and then you’re serving up an offer or ad after that. Engagement gets longer when the story line is scripted or more engaged,” says Smith.
“Brands want to tell engaging stories that people want to watch rather than just attaching their name to things, which they’ll still continue to do,” Schiavo says. “To create brand loyalty, you have to create a sense of commitment to a brand out of some type of attachment. When you watch something that you’re really engaged with and you really like — that really strikes a chord with you emotionally, and you associate those emotions with that brand and the personality of that brand — those are all things that could definitely be very lucrative from a marketing perspective.”
Dynamic Digital Data
With content strategies and distribution in place, the final key to the puzzle is the back-end management of data around campaigns, programs, viewers and customers. Forget about the anonymity of box office ticket sales or Billboard charts: the analytics that come from digital media offer much more detailed, relevant information, making the end game better for both marketers and consumers.
“Because repeat business is key to brand and commerce success, capturing and analyzing consumer data is essential to any successful campaign,” says Johnson. “For this reason, Delivery Agent closely monitors the entire purchasing process, including: How did the consumer come to the store? What items did they look at? Did they start the purchasing process? If so, what did they want and how far did they get? Assuming there was a purchase, what were the item(s) bought and how long did the consumer consider their buy? By knowing what a consumer has purchased or even been interested in during a previous experience, we can retarget them and present related items in the future. Going a step further, knowing that a consumer has shown past interest in a campaign, whether it’s entertainment, direct response, lead-gen or branding, with a remote-based interaction, we can target contextual products to them we are confident they will be interested in,”
Smith adds, “What the extended digital environment allows us to do is that when a brand invests in creating the content to suit a consumer, what we see from the content is a one-to-one relationship with the consumer and the content. We’re seeing a direct correlation between the consumer watching the content and the call-to-action. We’re doing that by getting them engaged in the content, seeing that they’re engaged for a period of time, and then adding the activation piece that goes with the content.”
Smith explains that BNM’s own custom engineered datamart, Audience Data or “AUDATA,” aggregates all data into one database. It includes a display layer, which provides custom dashboards close to real time, as well as a high level of detail on their audience, behavior and social preferences. “Essentially, AUDATA collects and reuses information gathered on traffic and behavior as the audience consumes content,” says Smith.
Digital aside, broadcast TV is still very much a huge part of the entertainment landscape. Today, traditional TV still accounts for the lion’s share of video viewing, and will likely continue to do so for a good while, but online and mobile are where the growth is, with 30-percent growth in hours watched per month from fourth-quarter 2012 to fourth-quarter 2013, according to Nielsen.
“For a traditional brand, just serving ads up to traditional media will always be there, but you would be ignoring a massive growing market and you would just be hanging on to a declining market if you only left yourself in the 30-second advertising space and didn’t go into content,” says Smith. ■