Why Branded Entertainment is Changing Our Content

by Stephanie Sidak
Back in the 1950s, in what feels like a galaxy far, far away, the broadcast television airwaves were ruled by a little television program called I Love Lucy. This pioneer of the multi-camera situation comedy format starred A-list comedienne Lucille Ball and her husband, Desi Arnaz, as an upper-middle class married couple in Manhattan. Each week Lucy, Desi, and their neighbors/best friends Fred and Ethel engaged in delightful hijinks as they cavorted around New York City. And each week, home viewers of the show were treated to not only the hilarity of Lucy’s comedic timing, but also to a healthy dose of Phillip Morris cigarette product placement commercials. But these commercials did more than just run during the act breaks of I Love Lucy – they actually financed the entire show after Philip Morris became the official sponsor of the half-hour sitcom (“I Love Lucy”). As the financial controlling interest in this show, the tobacco giant took its role very seriously; according to www.sitcomsonline.com, the word “lucky” wasn’t allowed to be written into any script, due to fear that it would cause viewers to think of competitor Lucky Strike cigarettes.

While watching television, it is easy to forget that what we’re seeing is so much more than simple storytelling, and that the content we consume is first and foremost a moneymaking enterprise. The notion of having one controlling sponsor who influences a scripted television show as much as Philip Morris did in the mid-twentieth century may seem archaic. However product placement and product integration are working just as hard now as they ever were to ensure that the audience’s money gets from their pocket to an advertiser. In fact, the television industry’s need for advertising revenue is now so strong that an entirely new genre is moving to the forefront of American media: branded content. Branded content – as explained by Paul Thenstedt, VP of Digital Media Sales at NBC Universal in Chicago – is content that is created to tell the story of a brand. In the case of the NBC Universal Digital Studio, an advertiser commissions the production house to create, produce, and distribute a story with their brand at the center. With the rising popularity of such content and the prevalence of product integration in our entertainment, it is easy to argue that original content will soon be born not of creativity, but rather, salability.

A New Model

From starting around the time I Love Lucy was running in the early 1950s, the television industry has essentially had the same business model. This model relies on the symbiotic relationship between network and advertiser; shows stay on the air because of the funding they get from ad revenue, and advertisers pay to run their commercials in shows that draw a large audience. This model worked great when the television was the centerpiece of the American family room and only three major broadcast networks provided the majority of the content. The viability of this model began to falter, however, when the Federal Communications Commission (FCC) loosened its restrictions on cable television providers, and the premium cable channel Home Box Office (HBO) came into existence (“History of Cable”).

By the spring of 1998, there were 171 cable video networks (cable history page). Now, of course, that is just a small percentage of all the cable channels available through digital and satellite technology. These networks are funded by subscription dollars, but most also receive supplemental funding through advertising revenue. Compared to the three networks that controlled the airwaves of yesteryear, advertisers now have a much broader range of outlets on which to spend their money. The fragmentation caused by the expansion and diversification of cable networks, along with the competition for advertising dollars is causing a shift in the traditional network business model (Mullen).

The surge in media technology over the past decade has compounded this shift. As the Internet began to monopolize the way people spent their leisure time, the television industry was forced to go online. In 2006, ABC was the first broadcast network to make select prime time shows available for streaming in their entirety on its website (“ABC Puts TV”). Now, almost every major network has a full episode player feature on its site, and if a show can’t be found there, viewers can find content on sites like Hulu.com which also house full episodes. These episode players are available for free. But embedded within the streaming episode are several advertisements that the user can’t skip over – providing a new platform for advertisers to reach consumers and for networks to make revenue.

When web series began to gain popularity, an entirely new market became available for content providers to monetize. NBC Universal jumped on the bandwagon three years ago with the creation of its Digital Studio; a fully-functional production house that creates nothing but branded entertainment. According to Thenstedt, the episodes created lend themselves best to the web series format – about an hour’s worth of content broken up into a series of five-minute episodes – but run across all media platforms including television, online, and mobile devices.  These mini-shows have a high production quality and many feature B and C list actors, like the Digital Studio show “CTRL,” which stars Arrested Development’s Tony Hale.

“CTRL” tells the story of a nerdy cubicle-dweller who accidentally spills his Lipton Iced Tea onto his computer keyboard, causing the keyboard to become “alive” and give him the ability to magically manipulate time. Lipton was the sponsoring brand of this series, the idea being that their iced tea is magical – extraordinary compared to other teas. Another approach to telling a brand’s story is demonstrated in “In Gayle We Trust,” another NBC Digital Studio production that tells the story of American Family Insurance. In this story, the titular character Gayle is the personification of the AFI brand. Gayle is a local, small-town American Family Insurance agent who also happens to be friends with everybody, a stand-out citizen, and who is great at giving advice.

NBC Universal is not the only network tossing their hat into the branded web series ring; this past year BET co-produced two successful web series with Proctor & Gamble, “Buppies” for CoverGirl and “My Black is Beautiful” for P&G’s eponymous line of beauty products. The latter has been a huge success for Proctor & Gamble, drawing over 3.6 million viewers since its launch (Hampp). That may not seem like a lot considering the great expanse of the web, but it is easy to see that this little series performed well when you compare it to a full-fledged cable show like Terriers, which was recently cancelled by FX because it only drew an average 500,000 viewers per episode (Rice). Even non-entertainment brands are starting to utilize web series advertising, like Kraft and Unilever with their web shows “The Real Women of Philadelphia” and “Into the Heart of Italy,” respectively.

Changing Viewing Habits

It is fair to say that the Internet has not only revolutionized many aspects of everyday life – from the distribution of information to global communication – but also changed our society. As someone who has grown up with the Internet, I cannot deny the affect it has had on the way I interact with my surroundings and my world. The speed of broadband has set the precedent for everything to be instant, and the convenience of mobile has set me up to expect all of my information and media to be accessible from anywhere. I don’t believe that I’m the only one who feels this way; the cultural ramifications of the World Wide Web are far-reaching. As our technology progressed and became dominant in our lives, our media consumption habits changed.

According to a study done by Comcast in 2010, 6 out of 10 people have reported owning a DVR (Digital Video Recorder), and 62% said they have, at some point, utilized a time-shifting machine to watch a television program at a time other than when it originally aired (Seidman). One user-friendly feature of DVR devices is the ability to skip over ads. This obviously creates a problem for advertisers, as their ad dollars are wasted if their target audience simply skips their ads. Though statisticians at Duke University recently found that the majority of people still watch television shows live (an amazing 95% of 1,200 users studied, to be exact), I have a suspicion that this will not be the case for much longer (Hollister). In addition to DVRS, many web sites are cropping up online with pirate television episodes, most of which do not have commercials.

Additionally, with cellular phones now functioning in a much higher capacity, media consumers are beginning to look to content providers for enhanced mobile media. A study done by ABI Research projects that by 2012 there will be 462 million mobile television subscribers – a huge market that is still largely untapped by content creators (“Mobile TV Subscribers”). A look at att.com shows that many networks have a mobile format, including ESPN, CNN, FOX News, Nickelodeon, and the major broadcast networks, but few have yet to take full advantage of this platform by creating custom mobile content. Much of the current mobile content is technology-specific and is not catered to the ever-expanding mobile audience (Schuurman).

Content providers have recently begun to develop counter-attack strategies to keep their medium from becoming obsolete during this time of our shifting media landscape. With the recent launch of Google TV, the way viewers interact with their televisions and computers could potentially be changed forever. The system is essentially a hybrid of a television and the Internet, and allows users to browse the web while simultaneously watching television, with the users cell phone functioning as the remote control. Features include a customizable home page, much like Google’s Chrome browser, and DVR capabilities if live viewing is not possible. Content providers are contracted with Google to create a widget for their network on Google TV, which provides users with television content as well as the content on the network’s online property. As the Google TV web site reads, “the web is now a channel.” Consumers can purchase a specialized Google TV starting at $599 or buy a box that brings the service to their existing television set for $399 (“Features”).

The Need for Integration

These changing viewer habits all point to one thing: the necessity of advertising that is built into the entertainment. Like traditional show sponsorships, product placement goes back to the earlier days of television. In addition to being the primary sponsor of I Love Lucy, Philip Morris also utilized product placement within the shows narrative. Lucy, Desi, and company always smoked Philip Morris cigarettes, and in one episode, Lucy even disguises herself in the iconic Philip Morris bellhop uniform. These days, this type of brand and product integration is everywhere – from Tony Soprano’s beer of choice being Rolling Rock to the cell phones of the Gossip Girl characters being made by Verizon.

A great case study that demonstrates the financial effectiveness of a well-executed product integration strategy is the partnership of fast-food chain KFC with the CBS sitcom Gary, Unmarried. In one particular scene from an episode that ran in early 2010, the two main characters enjoy a bucket of KFC chicken for dinner – and have a brief conversation about the taste and deliciousness of said chicken. The brand mention lasted less than a minute, but iTVX later reported the integration to have had a $514,259 payoff for KFC. This is an undeniable success of ROI considering that a 30-second commercial on the show costs roughly $80,000 (Stanley).

Product integration becomes crucial when an advertiser’s target audience knows they’re being targeted to or has the technological means to skip over traditional commercial spots entirely. Teens and young adults, for example, are difficult to reach due to their Internet literacy that allows them to find free content without the perceived bother of advertisements. Unfortunately, this demographic is the one that most advertisers are trying to reach, as their pockets run deep with their parent’s money.

In their article “Advertising in the age of TiVo: Targeting Teens and Young Adults with Film and Television Product Placements,” Donnalyn Pompper and Yih-Farn Choo claim that product placement can actually be analyzed as a form of classical-conditioning, “wherein one’s attitude toward a well-liked stimulus is transferred to an affectively neutral stimulus when the stimuli are joined.” Essentially, this means that if you, as an advertiser, can get your audience to associate your product with a piece of entertainment they like, there is a much higher likelihood that they will purchase your product. Assuming this is true, product placements and integrations are then ideally functioning on three levels: 1) content producers can expand revenue potential beyond traditional commercial spots, 2) advertisers can overcome ad-skipping technology and the “leave the room when a commercial comes on” mentality, and 3) subliminal marketing favorably links a brand with an emotional, personal experience created by the entertainment it is embedded in, thus increasing brand recognition and purchase rates.

Because of the potential of brand integration to be fiscally successful, the practice has become a vital part of advertiser’s media strategy. So vital, in fact, that ratings measurement companies like Nielsen, iTVX, and Front Row Analytics all now have measurement systems in place to test the effectiveness of integrations. iTVX in particular analyzes over 70 different aspects of one product integration to come up with a comprehensive rating that will determine its success or failure. This enhancement of the ratings measurement systems reflects the increasing sophistication of the integrations themselves. Gary Cogland, Business VP at iTVX, is quick to point out that “these deals are more highly managed than they’ve ever been before. Brands don’t send out props and hope for the best (Stanley).”

Gossip Girl, for instance, utilizes product integration to advertise to that hard-to-reach teen demographic by embedding products into storylines to achieve an effective integration. The show revolves around a group of Upper East Side high school students in Manhattan whose lives are closely entwined through an online and mobile gossip site called Gossip Girl. Plot lines are frequently driven by things that the characters find out about each other on Gossip Girl, or by using the site to manipulate and socially attack each other. Most of the time, the characters access the Gossip Girl site through their mobile devices, which are always provided by Verizon Wireless – who won a four-way battle between mobile providers to be the starring company (Steinberg). The interesting thing is that the Gossip Girl/Verizon relationship works both ways; Verizon’s web site has an entire page devoted to the show with exclusives like the music featured on the show, episode recaps, and wallpapers featuring the shows main characters.

Verizon’s placements with the popular NBC comedy 30 Rock inspired the title of this paper. After a conversation with her boss about Verizon’s great service, Tina Fey breaks the fourth wall and turns to the camera asking, “Can we have our money now? (Fey, McCarthy, “Somebody to Love”).  Of course, this level of self-reflexivity is what keeps 30 Rock viewers coming back for more, but also makes an important point about product placement and integration: the shows that we all know and love are being partially funded through it. So this strategy is just as important to content creators as it is to advertisers.

Production Theory

Production theory is based on the assumption that all media is created for profit and operates within the American capitalist free-market economic structure. It is the most applicable theory to branded content and the ever-changing television business model. In fact, since this content that is being marketed on air literally is for being crafted for the sole purpose of making money. With this knowledge television is the perfect ideology to be analyzed using Production Theory. The core of this analysis is the changing relationship between advertisers and content producers, which is also in line with the basic concern of Production Theory: the balance and imbalance of power within the relationships between industry entities (Fineman).

Within the situation outlined in the preceding pages it is primarily a mid-range circumstance. However, it has aspects micro-level and macro-level aspects. For instance, according to Thenstedt, the NBC Digital Studio does not yield much profit, but instead is viewed by ad salesman as an extra service provided to advertisers in order to secure more of their money in other, more profitable ad outlets. The negotiations that happen surrounding the pitch and sale of these Digital Studio web series would fall under the micro-level umbrella. Additionally, the Client and Producer power roles are demonstrated by observing the give-and-take of the advertiser with the network; the network wants money from the advertisers, and the advertisers want as much air space as they can get for their dollars (Vande Berg).

Looking at branded content from a macro-level, the first potential problem that jumps out at me is the regulation of audience with protection from subliminal advertising. Though it is typically thought of in regards to the regulation of content in television shows, the FCC also has some authority over the advertisements that get put on air as well. There are currently regulations in place regarding children’s advertising, tobacco and alcohol advertising, among other things.

In conclusion, our media landscape is rapidly changing. Networks and content producers are beginning to take the steps necessary to combat becoming obsolete in an era of Internet dominance and advancing technology, but unfortunately, this means that we can expect to see more advertising in our content. How blatant the advertising is will vary, but it is important that we, as viewers, are aware of it regardless. We’ve come a long way from the times of Lucy and Desi. However, the relationship between advertisers and content producers and the audience is still intact – but it is only changing out of necessity. The artistic repercussions of this shift toward ad-fueled content have yet to be seen – but, sadly, it appears that commerce is slowly edging out art from our media consciousness.

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