Recently, AXE, a Unilever brand announced its “biggest and most ambitious” marketing campaign to date. To create buzz around its Axe Apollo sub-brand, it is planning to send 22 people into space through an elaborate 60-country marketing campaign.
If the experience of Red Bull, with its audacious space jump watched by 8m simultaneously on youtube is anything to go by, Axe too stands to gain tremendously from the excitement that will be created by the campaign, albeit with the Damocles sword of negative brand chatter should any mishap occur.
Axe is not new to such experiential marketing campaigns, defined as the use of events or direct-to-consumer activities to propagate and celebrate brand values. Its LynxJet campaign is a particularly celebrated example. Still the scale of its latest campaign does impress.
Axe and Red Bull are only two examples of Brands that are today moving from the traditional ways of reaching consumers (Paid Media, stressing Above the Line advertising) to these newer methods (Owned Media which traditionally meant events / Below the Line, but now includes own brand media outlets such as content-rich websites, magazines, TV episodes etc.).
Red Bull Media
Red Bull has emerged as the textbook example of an Owned Media player. From promoting extreme sporting events and sponsoring action sports stars, it has now set up Red Bull Media House, its subsidiary which operates as a full-fledged media company. The WSJ reports “the company, which first switched on its cameras in 1994 to shoot an Austrian air show pilot, expects to produce 1,000 hours of footage next year, up from 850 in 2012.”
From the WSJ article we learn that Red Bulls media arm churns out content for 13 episodic YouTube channels featuring exploits of athletes such as motocross rider Travis Pastrana and surfer Kai Lenny, and a sports programme for NBC called the Red Bull Signature Series. In addition it produces movies (‘The Art of Flight’ a full-length film about snowboarding, was the No. 1 movie download on iTunes during its release week, and publishes a monthly magazine ‘The Red Bull Bulletin’—with an international circulation of 2.7 million. In some senses, Red Bull is now a media company that does a $7bn energy-drinks business!
The trend of Brands rejigging their marketing spends from Paid Media (advertising) / Earned Media (PR) to include Owned Media (Content) is a white hot trend in marketing today. It is also referred to by the moniker Branded Content or Content Marketing. A search for ‘Branded Content’ or ‘Brands as Publisher’ on google reveals numerous examples of Brands (though Red Bull and Coca Cola feature prominently) that are increasingly incorporating content at the heart of their communication strategy.
For a well-articulated look at how content marketing is emerging top of mind for CMOs worldwide look at Coke’s roadmap.
Steve Rubel of Edelman Digital captures it astutely when he states to David Carr that “Brands, especially those centered around lifestyle interests or luxury, are increasingly becoming media companies”. This is demonstrated in moves by Luxury brands to launch media brands of their own such as LVMH’s Nowness, Chanel’s 31 Rue Cambon etc.
Why are Brands becoming Publishers?
Historically, story-telling or communications tools were expensive. Most such tools, be it Television, Newspapers, Radio had high set up costs, and needed to be produced / consumed on a wide-enough scale to bring down cost to the end consumer. Very few Brands could afford to go directly to consumers, and hence Publishers emerged as intermediaries connecting Brands to Consumers.
Today, thanks to the internet, costs of publishing content and reaching out to consumers have fallen. It has also become easy for consumers to reach out to Brands. In this changed context, Brands are no longer able to justify increasing their investments in Publishers (Paid Media), and are increasingly beginning to increase their investments in more direct ways of reaching consumers – be it events, their own websites or magazines (Owned Media).
An interesting point is the emergence of Branded Content enablers such as John Brown Citrus Publishing, Totem, NewsCred etc who have emerged to support Brands in their publishing efforts on the content front. NewsCred is a particularly interesting example; it helps brands such as Coke, Johnson & Johnson, Zurich Insurance access content from leading Publishers such as Guardian, Washington Post etc. Josh Sternberg of Digiday states that NewsCred will rake in over $1m by end of next year licensing content from news outlets to brands.
What about Publishers then?
If Brands are invading Publishers’ spaces and are transforming themselves into media outlets, Publishers face the risk of further deceleration in their revenues, as Branded Media plays take away even the lower ad revenues they had to contend themselves with. In such an environment they have two options, and these aren’t mutually exclusive by any means.
Option 1 : Collaborate with Brands and support their Branded Content plays, either through syndication or close-knit content partnerships / custom publishing initiatives – Time Inc’s Content Solutions arm is a great example. After all very few brands are producing entirely original content. A minority (Red Bull, Acne etc) produce almost entirely high quality original content. The rest have varying mixes of original and sourced / syndicated content. This presents itself an ideal opportunity for Publishers, who are well-versed in creating high-quality content.
Another opportunity would be to explore ad sales opportunities. Conde Nast recently announced a partnership with Delta Air Lines where it would take over the ad sales for Delta Air Lines’ website, apps, kiosks at airports and even its boarding passes. As Brands expand their publishing ventures, they would welcome partnerships that can help them monetize these properties.
Option 2 : Widen revenue sources, and explore becoming brands or selling brands themselves. Playboy set the trend for this in the ‘70s as it expanded into casinos, deodorants, fashion accessories etc. With its licensing franchise reaching revenues of $1b (’12 according to licensemag.com) Playboy saw its licensing fee revenue decisively overtake revenue from print in Q4, ’10.
A recent and prominent example of this phenomenon would be Monocle. It is a magazine (and also an internet radio station cum seasonal newspaper) which retails self-branded bags, shirts, stationery created in partnership with quirky / upcoming luxury brands such as Comme des Garçons, Tomorrowland, Valextra etc., through high-street retail establishments – Monocle Shops in Tokyo, Hong Kong, Toronto, London and NYC – as well as through the internet.
It mush however be noted that this trend towards media outlets selling branded products has been led primarily by the need to diversify revenue sources, than as a strategic response to Brands invading Publishers’ territory. In recent times with advertising revenue falling precipitously, Publishers have been searching for alternate revenue streams, and extending their well-recognized brands into alternate product categories is emerging as the biggest non-traditional revenue opportunity.
Summarizing the discussion thus far
|Brands becoming Publishers||Publishers becoming Brands|
|Examples||Red Bull, Amex, Patagonia, Coca-Cola, Pepsi etc||Monocle, Lucky, Look, Cosmopolitan, Playboy|
|Who will win?||Content specialists especially third-party firms, and perhaps even Publishers content solutions arms who support brands’ efforts in content creation||Big name publishers with clear brand propositions – Cosmopolitan, Mens Health etc who can extend their brands into different categories|
|Who will lose?||Publishers who rely on advertising from Luxury and Lifestyle brands, as these brands would increasingly use owned media over paid.||Publishers who continue to rely on the traditional ad revenue driven model|
If you are a Publisher reading this, what should you do next?
Your next steps depend considerably on the nature of your media franchise. Let us look at a brand that has a large footprint, and has the ability to continue investing in itself.
|Short to Medium Run||1 – Set up a branded content teamthat can partner with Brands who wish to expand their content marketing efforts. The partnership can extend from pure content licensing arrangements to a mix of content sales / ad sales and even further, completely taking on a media property (all content + sales efforts for a share of the revenue or fee)
2 – Tie-up with a licensing rep who will put in place a cohesive brand licensing strategy in sync with your brand values and positioning, and kickstart the exercise
|Long Run||3 – Explore affiliate revenue / e-commerce opportunities for the brands that you write / review on your website (Wirecutter and Gawkerpoint the way forward on affiliate revenue)
4 – Explore a strategic partnership such as a JV for a media property with a brand (e.g., Sony could partner with a Nestle or ITC to launch a Food Channel). We had the NDTV Good Times TV Channel, in partnership with Kingfisher but that was more of a branding deal than a genuine branded content play.
5 – Evaluate building an inhouse agency for working with Brands on their content marketing initiatives – increasingly as the vanilla print ad disappears, the challenge will lie in making advertising marry content better! Atlantic’s work with GE on ideaslaboratory.com is impressive stuff.
For a brand with a limited or niche footprints, the threat from digital offerings would be far higher, and the first priority is survival / stanching the bleeding. Once that is done then there are two directions to go in – either widen the footprint, or if that is not possible deepen the connect through offline connects, lead generation (especially for B2B / Prosumer media), affiliate revenue opportunities etc.