Marketing and Entertainment Mingle As Never Before

Harry Kim’s new “Marketing and Vine” coverage for AdAge begins with this overview:

The buttoned-up world of brand marketing and the freewheeling entertainment industry are not the most natural bedfellows. While hitching a brand wagon to a celebrity has always had appeal, most marketers have trodden warily in their relationships with Hollywood’s seemingly unpredictable players.

New interaction
But shifts in technology and the media landscape have spawned a closer courtship between the two-necessity, it seems, is proving to be the mother of a new level of interaction.

The surprisingly robust 2002-03 broadcast network upfront last spring put to rest much of the nonsense about the impending death of the 30-second TV commercial. But there is no ignoring media fragmentation or the fact that emerging digital technologies are wresting power from the hands of the content provider and placing it with the consumer, forever changing the traditional paid-media advertising model.

“The biggest factor is the consumer. Boomers, X’ers and Y’ers are all demanding a different kind of relationship with advertisers,” said Bruce Redditt, executive vice president at Omnicom Group, refering to the three advertiser-coveted age groups known as baby boomers, Generation X and the younger Gen Y. “Technology gives them the clout to do it with more control over their own programming, content and time. The new consumer is a severe challenge for traditional media buying practices.”

CEO John Wren has charged Mr. Redditt with tackling this conundrum for the leading ad agency holding company.

Paradigm shift?
As a result, while Mr. Wren and his peers publicly place more revenue demands squarely on the shoulders of their below-the-line marketing services units, marketers march toward an increasingly integrated approach as well, reassessing their branding mix. One result of this collective reassessment is greater engagement with the entertainment industry, with the end game pointing toward a paradigm shift in which brand marketers view content providers less as vendors and more as partners.

Entertainment plays — running the gamut from music licensing to movie product placements and TV sponsorships — are certainly not new tricks in the marketers’ bag. But their relevance and, in some instances, the controversy surrounding these tie-ins — “content/commerce convergence” and “branded entertainment” are two of the more popular descriptors — are demanding increasing attention in this changing landscape.

New TV universe
With the proliferation of media choice, driven by the explosion of new digital technology, the average consumer is bombarded with more messages than ever. Certainly, while the Internet has been debunked as a superior commerce venue over bricks-and-mortar outlets, its relevance as a viable advertising medium has maintained, rising above the chorus of skepticism. On top of that, digital cable television is gaining traction, as more and more cable operators are aggressively hawking their digital tiers, with nascent offerings in interactive TV and video-on-demand. As a result an increasing number of Americans are now enjoying the experience of a multi-hundred-channel universe, an environment in which they can escape from the stranglehold of network programmers.

This change has created new tensions, with the most public dust-up between the TV networks and advertisers on one side and the purveyors of PVRs, personal video recording devices, namely TiVo and ReplayTV, on the other. Both devices feature the ability to time-shift viewing while affording the convenience and efficiency of recording and storing programming on a hard drive. The ability to fast forward through or virtually skip commercials has the old guard up in arms and has even led to litigation against Sonicblue, with its Replay TV device.

Viewers’ free lunch
No one has been a more vocal critic of PVRs than Jamie Kellner, Turner Broadcasting chairman-CEO. Mr. Kellner hasn’t pulled any punches in expressing his concern that TV networks may someday be faced with a crippled business model, one that is currently fundamentally reliant on advertising revenue. He has said that using PVRs to alter a programmer’s presentation by zapping ads is nothing short of “theft” and that viewers shouldn’t expect a “free lunch.”

Despite all of the hue and cry, PVRs don’t pose an immediate threat, since only about 1 million American households have the capability. And even if the technology gains wider acceptance — which seems likely with the future rollout of PVR-imbedded set-top boxes by cable companies and satellite operators — many observers aren’t necessarily convinced that this would lead to the devastation of the network TV business model. They cite how VCRs with their time-shifting capabilities did not cripple advertisers and the networks when they were rolled out decades ago, and how people already avoid commercials by surfing with their remote controls.

What all agree on is that the net effect of these trends forces the advertiser to be more creative in terms of how it works with content providers to keep their brands top-of-mind.

And the TV networks, movie studios and even record labels are listening. Cost containment is paramount for all of these companies in varying degrees as they seek brand purveyors as partners in defraying production, distribution and marketing costs that are spiraling out of control in a stubbornly stagnant economy…..