Saturday, October 29, 2011

To Glee or Not to Glee? Why Bigger is Better for Media Partnerships in 2012

For the brands that can afford it, a partnership with an ultra premium entertainment franchise stands to be a smart move in 2012. Despite the hefty premiums, a multi-platform integration with the likes of a "Glee" (TV Show), The Oscars (Event) or even a "Call of Duty" (Video Game) will be an efficient use of media dollars.  Here's why:

          1) Fish Where the Fish Are - Media consumption occurs across a dizzying array of platforms and devices. As the media ecosystem became more varied over the last 5 years, the pressure to have a “360” presence forced brands to invest in Mobile WAP pages, YouTube Channels, Facebook pages and Apps. Many of these branded destinations languished because - let’s face it, most brands just aren't very interesting. But, by hanging on to the coattails of a “Glee”, suddenly your brand has a mobile, tablet, online and social presence that consumers are flocking to. 

2)   Be Part of the Conversation – Every time a new episode of The Voice comes out, millions of viewers plug into their social networks and cheer, gasp and OMG using Twitter. They’re sharing the show experience with their friends but they’re also following the contestants, the hosts and the show itself.  Because of this "social TV" phenomenon, TV shows are increasingly incorporating the Twitter dialogue within the broadcast. Soon, a portion of the show experience will actually unfold in social media. You'll have to "follow" the show to be in the know.  In this scenario, a well timed tweet from @NBCTheVoice directed toward a sponsor's Twitter account could set the brand up to deliver highly coveted content, making it an essential part of that experience.

3)   The Netflix Effect – Netflix’s 24 million subscribers are constantly streaming back catalog episodes from premium shows like Mad Men, Breaking Bad and Friday Night Lights.  So much so that Netflix constitutes an astonishing 32% of all online bandwidth! Even more astonishing, Netflix doesn’t sell ad space within the streams.  That gaping hole in sponsorship opportunities is forcing big brands to rethink how to align themselves with ultra premium content.  One solution is brand integration.  If a brand’s messaging is safely embedded within the programming, it doesn’t matter how consumers view it.   

Sunday, October 16, 2011

Is Facebook Making the Same Mistake Twice?

Facebook's Beacon was ahead of its time
In late 2007, Facebook was embroiled in one of its worst privacy scandals. It had just unveiled “Beacon”, a bit of code that allowed Facebook to share activity its users took on other websites within the Newsfeed. Beacon represented an evolution in how brands could use social media to advertise. It proved Facebook had the technical know-how to create, and audacity to implement software that could marry 3rd party data with users’ Facebook profiles. Beacon, with its 40 launch partners, was supposed to be a watershed moment for Facebook.

The only problem was Facebook forgot to ask its users for permission to participate. This lack of transparency was punctuated by the story of a would-be marriage proposal that was spoiled when the boyfriend purchased a diamond ring on Because he was logged in to Facebook at the time of the purchase, it appeared in his girlfriend’s Newsfeed before he had the chance to pop the question.

Beacon was a PR disaster, but aside from that, it showed Facebook’s hand. From that point on, it was clear that Facebook’s monetization strategy was predicated on knowing more about you. Facebook wasn’t satisfied with all of those photos, status updates and friends because they didn’t translate into monetization opportunities, at least not lucrative ones.

For Facebook, the challenge was introducing products that goaded users into handing over more data. That’s where Beacon was a colossal failure: it exploited user data without compensating the end user. Even worse, it did so without asking subscribers’ permission to participate. Companies like Netflix, Pandora and Amazon have proven that users will gladly volunteer personal data in exchange for enhanced products. Beacon violated that golden rule of the digital age and was thus doomed.

Facebook seemed to learn from its mistake, introducing “Likes” and “Places”. These products gave Facebook valuable data about its users, but only if they opted in. With Likes and Places, both Facebook and end users benefited.

Fast forward to Facebook’s F8 conference last month when Zuckerberg unveiled “Ticker”. Ticker is the constantly scrolling module at the top right of the Facebook UI (user interface). You know, the place where it shows what your buddy is listening to on Spotify. Pretty soon it will also broadcast what article your friend read on Yahoo, video he watched on Netflix, book he read on Amazon, advertisement he clicked on, etc.  Zuckerberg calls this the “frictionless experience”. Sound familiar? It’s Beacon 2.0.

A Facebook user questions the value of Spotify updates 
We know why Facebook is motivated to know when, how and what media its users consume. But, as we learned with Beacon, it’s hard to see the value that users get in sharing this data. Music seems the most promising out of all of these, yet the relentless Spotfiy updates in my Ticker strike me as clutter. I’ve already trained my eye to avoid the Ticker, and I imagine so have a lot of you. For Facebook, that’s a major red flag.

Maybe Facebook doesn't have the user experience in mind. It’s possible that Ticker’s primary purpose is PR, not UI. At F8, Facebook unveiled a litany of strategic media partnerships, each of which will yield a treasure chest of user data. Because of the legacy of Beacon, it’s paramount that Facebook be seen as transparent in how it handles this data.

Ultimately, Ticker is transparency in the most literal sense: It’s an open window into the vast data collection of Facebook’s back end. As the updates from media partners come streaming in, Ticker displays them in plain view, satisfying Facebook’s need to be transparent. That’s an ingenious PR tactic to stave off privacy watchdogs. The only problem is that transparency is not a product in itself.

The onus is on Facebook to translate its growing stockpile of user data into a useful product, not a revenue stream. And the clock is ticking.

See More:  Epic Fails in Online Advertising

Sunday, October 9, 2011

The Netflix Effect – How Netflix’s Lack of Advertising is Quietly Shaping the Online Ad Industry

"How much for an ad on Netflix?" Ever since the video streaming service proved that Americans have an insatiable appetite for premium TV shows and movies, it’s a question that Netflix has heard from many inquiring media buyers. The answer, to the chagrin of Madison Avenue, is a resolute no – Netflix doesn’t run ads.

Despite the explosive growth of all-you-can-eat premium content services like Netflix, Hulu and iTunes, the supply of ads alongside ultra-premium content has struggled to keep up. That means a lot of glossy :30 spots all dressed up with nowhere to go; something advertising executives are beginning to notice.

On one hand, the boom in video streaming is fantastic news. Netflix and the like have proven that the demand for premium content is not satisfied by TV alone and thus have given advertisers a new media channel to run their heralded :30 commercials. The scale of this incremental video consumption is enormous – Netflix alone has 24 million subscribers, about a million more subs than Comcast.

Yet despite the enormous surge in demand for premium TV shows and movies, the supply of ads has been scarce. Hulu is the lone service to sell ad space alongside ultra-premium content but offers only a fraction of inventory when compared with the same programming on TV. No surprise, that limited inventory is in high demand, Hulu has 627 paying advertisers.

The Netflix Effect, or the scarcity of ad space alongside premium online video content, has a profound impact on the economics of digital media. Primarily, it’s helped prop up Hulu and the online video marketplace in general. Digital video ad spending grew 42.1% to $891 million in the first half of 2011, a significant percentage going to Hulu. The limited inventory is also forcing brands to rethink how to align themselves with premium content. As a result, media companies large and small, now have a production arm dedicated to branded content production.

Now Netflix represents 32% of all online traffic, too big an audience to ignore. Too much money to be made. It makes you ask, how did this happen in the first place?

Ironically, the fact that most consumers never cut the cord, meaning, they kept paying for cable even as they began to stream the same programming online, meant advertisers viewed capitalizing on online streaming as a luxury, not a necessity. This allowed Netflix’s growth to stay off the radar and ad free.

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