How to beat the PVR

In the PVR age, integrating messages into content will become the key way to reach consumers. The future offers advertisers great opportunities, Mitch Kanner argues.

Guess what? David Ogilvy is still right. Not only is the consumer not a moron but, given the rapidly changing media technology landscape, consumers are fully empowered, completely in-control masters of their universe. Take them for granted at your peril, but take the means of reaching them for granted at the threat of total demise.

The consumer has always wanted more choice and more control. Now, they finally have it. Media channels and options proliferate and consumers are getting increasingly promiscuous with their time and attention. Hundreds of television channels, video on demand, content on demand, personal video recorders, the internet, wireless content... the list goes on. One choice they are making is to not watch television advertising, at least, not in the way they once did.

Reaching the consumer becomes a huge challenge, but not really a new one. For the past 50 years, we have wondered whether the audience was watching our TV ads. With the advent of the PVR, we're seeing a measured reality as opposed to one artificially created to support inflated cost-per-million figures. The PVR may be a new technology, but it is really just letting us track behaviour that is the equivalent of changing channel or visiting the loo during ad breaks.

We know when and where we are engaging who, because communication is becoming interactive - even TV.

Not only will we target the people we want, but they can, and do, talk back to us. They tell us what they want, what they like, and what they don't.

Let me illustrate how the commercial TV model has disintegrated over the past 20 years in the US. You used to be able to count on a few spots scattered through primetime to reach the whole of America, but not any longer. The same holds true here in the UK.

The average rating of the top five US TV shows in 1980 was 28. If a show only rated 20, it was pulled off the air. By 1990, the average was down to a 19. In 2000, it was 14. Last week, it was seven. Of course, advertisers pay less for those declining ratings, don't they?

There are more platforms for programming than ever before - broadcast, satellite, cable, movies, DVDs, the internet, and now the new Grail, wireless.

We need to think of the process in terms of the whole, unified picture, which is why ad agencies are a critical factor in marrying brand and content.

Granted, PVRs are only in about 400,000 UK homes today - the 30-second spot isn't going to disappear tomorrow. But in those households, up to 90 per cent of ads are fast-forwarded, according to the BBC (a Sky/ ZenithOptimedia study claims a figure of 73 per cent).

In less than three years, PVR and VOD/COD penetration should pass 25 million homes in the US. How do I know this will happen? Cable-satellite competition is forcing the price of these devices down, and the functionality up. Echostar is giving them away, every new cable box installed by Comcast and Time Warner has a PVR built in. It's not just cheap any more, it's free - and with Freeview getting in on the act, that scenario is not far off in the UK either. One survey indicates that PVRs already cost the UK ad industry £30 million annually.

We've heard all the buzzwords - branded, brand-integrated and brand-sponsored content. But contextual content will eventually be the only true, organic and natural way to hit the audience directly - that's brand content that enhances or even creates a quality story. Good TV, good music, good film - regardless, it needs to be compelling to be something more than a case study.

The low-hanging fruit in the US is product placement, but the reality is that brand integration needs to be contextual or it's just wallpaper.

In real life, brands are everywhere you turn. There's no such thing as Main Street USA or High Street UK, so why, in a movie or TV show, do we see generic streets and generic brands?

Why didn't the cast of Friends gather in a Starbucks instead of a Central Perk? It actually costs prod-uction more to remove brands than it does to include them. But we have to execute this practice smartly, organically and naturally.

David Crane is the creator, writer, and producer of Friends. After NBC had decided to produce the pilot for his new sitcom, Starbucks could have come to him to build a Starbucks store as a set for the show. Nothing else would have changed - the script, characters and stories would have remained the same. Both sides - creative and brands - would have won. And that's the way it should be.

Interestingly, the coffee shop brand in Friends, Central Perk, was later licensed and three shops opened. They failed miserably. There was no relationship between Friends and the shops. There was no brand fortification on the show, and no support promotions were run with the show.

Not that any of this is new, of course. About five years ago, I was having dinner in London with John Hegarty. We were discussing product placement and I happened to be going to Marrakech the following day to give a speech about Madison and Vine.

John claimed that product placement was not a new concept - it went back as far as the Venetians and the Renaissance painters.

Just imagine your brother-in-law is a glass-blower, and you are a successful Venetian artist, the David Crane of the Renaissance era. The obvious question comes up over amaretto after a family dinner : "Would you put my glasswork in your painting?" Look at the number of vases that appear in paintings of that era - product placement is an old idea.

But in this age, basic product placement won't work. Filling a pantry with products, parking a car in scene or sipping a drink at dinner is unnoticeable now - the audience just doesn't see it.

It is vital for brands to work on a film or TV show throughout script development. The Federal Express founder and chief executive, Fred Smith, achieved this when he sat down with the producers and writers of the Tom Hanks film Castaway. Both camps knew that the picture wouldn't have worked nearly as well if it featured generic "global air express". FedEx brought reality to fiction with a £7 million investment in soft costs.

It could have misfired. Smith allowed a FedEx plane to crash, killing fictional employees, but in the end the brand delivered its core services and developed a hero personality. FedEx took care of its employee, the last package was delivered, and the audience felt romance in the air.

But even this paragon example of contextual brand integration reveals a marketing shortcoming: wouldn't FedEx have seen more return on investment had it done more promotions around the movie? There always needs to be multiplatform communications surrounding an idea - using TV, wireless, print, the internet, etc.

The point is that none of this is easy or obvious nor, for that matter, cheap. In an age when every marketing dollar is scrutinised, how do brands do this? One solution is to create brand networks to fund integration, as well as development and creation of con-tent. Not everyone has the budget of a Toyota or a Procter & Gamble but, by bringing non-competing, complementary brands together, we can pool resources and create and support content that consumers want. This would enable brands with smaller budgets to take advantage of this opportunity.

Everyone should take a slice of their media budget and attribute it to this new space. You, as a brand community, need to take the lead in helping to provide content to emerging platforms such as video on demand and wireless.

Technology is changing our world. In fact, technology is driving everything related to content and messaging. Everyone seems to have a mobile phone.

It is the one thing you won't leave home without - if you leave without your wallet or purse, you're less likely to turn around to retrieve it.

There are around 1.6 billion mobile phone subscribers worldwide. There are half-a-billion subscribers with mobile phones in China alone, and only about 50 million TVs. Five million new mobile phones are sold every month there. As an aside, in South Korea you can actually watch TV on your mobile. Where do you want to live with your messaging and content?

In the UK, service providers are aggressively building their 3G and 4G networks. The leap was always screen resolution, not bandwidth. Subscribers need newer hardware that supports full-motion video and web access with TV-like screens to view content.

Those already exist. We are in the midst of that upgrade right now.

A huge business has been created around polyphonic ringtones and gaming.

There is a $4 billion industry, which is projected to grow to $8 billion by 2008 with the addition of visual content and master music recording.

Mobility is great, but content is what people will pay for.

Content could be of great quality in the wireless space, like a lot of advertising was until ten years ago. Ads were great stories and terrific little movies. Think about Apple's "1984", Levi's "pharmacist", Pepsi ads - all written by the John Hegartys, Steve Haydens, and Phil Dusenberrys, not by people who write TV shows or movies.

This new wireless content space will eventually be advertiser-supported, and the skill-sets that created those great media moments can be refocused.

Imagine that what we push to the consumer is pulled, and welcome, because it is not intrusive but invited and entertaining.

Wireless media will be different. Content is only downloadable from one to three minutes. The creative will create the medium. Who better to be the creative force in the wireless space than creatives who have built careers on writing to people about something in particular, using a short format? The agency can become an even greater asset in this new world by helping clients understand how to value and plan their investment across this playing field of new media choices.

When I look back at the past ten years of changes, I am amazed-remember, it wasn't all that long ago that you paid for music and water was free.

This is not some distant future we are talking about. This is now. You need to take the initiative in defining how your brands will communicate with your consumers. Do not be left behind. And remember, we are not just here to do our part to save the world from dandruff.

Mitch Kanner was one of the instigators of the Madison and Vine debate and has worked as a content consultant in Hollywood and for Sony, Revolution Studios, Universal Music Group, Motorola, BMG, WPP, Ogilvy & Mather, Red Cell and Omnicom, among others

THREE WAYS TO GET INTO THE UK CONTENT MARKET

The UK lags behind the US in branded content because of our restrictive legislation. You can't just dump brands into programmes and get away with it like you can in the US, where the in-your-face Coca-Cola glasses in American Idol are a prime example of very overt product placement.

There are great examples of unpaid-for placement - Nissan only had to lend HBO a car to get this classic piece of dialogue out of Tony Soprano: "It's got sensors in the seat belts, part of Nissan's triple-safety philosophy... a six-CD changer and surround sound."

Once Ofcom relaxes the restrictions, as Stephen Carter has hinted is on the cards, the UK will be ripe for a more strategic approach to branded content.

There are three choices when it comes to branded content, according to Andrew Lord, the director of Fuse, a joint venture between OMD and the Radiate Group. "You can go round content by sponsoring it, be part of it, which is really about product placement or shirt sponsorship, or you can be the content itself," he says.

There are pluses and minuses to all of these approaches. Sponsorship, he says, is "piggybacking on something else's popularity", product placement is subject to legislative restrictions and creating your own content is expensive - but can be very powerful.

"The biggest mistake people make is not consulting production companies when coming up with an idea for a programme," he says. "If you don't, then you end up approaching broadcasters and then discovering they are working on something similar themselves and they want to run with theirs."

Production companies are becoming more open to the idea of working with brands at the concept stage, he says - or at least, their commercial departments are. "Editorial departments tend to be paranoid that brands will influence editorial content, but the frustration is that Ofcom is there to ensure that doesn't happen," he says. "Commissioning editors are still sceptical, but are becoming more receptive now the financial imperatives are more pressing and there are more people in place to bridge the gap."

Andy Woodford is a founder of the branded-content specialist Freedom Media, the company behind the Pepsi Chart Show and Pepsi's more recent ventures into the market, including Pepsi Max Downloaded, a series of 60-minute programmes due to run on Channel 4 and E4 this summer.

"The hardest thing is coming up with the right idea," he says. "For it to work, it has to be original, engaging and more than just a 30-minute infomercial: to be part of an overall marketing campaign."

Freedom conceived the Pepsi Chart Show as a natural extension of Pepsi's strong links with the music world, he says. "Pepsi already had relationships with some of the world's biggest music stars and was sponsoring the commercial radio Hit 40 countdown. We wanted to take it past a badging exercise and into a TV property. The show then became integral to other parts of Pepsi's marketing - so they would run ads using Robbie Williams and then he'd appear singing the song on the show. "

Lee Daley, the chief executive of Saatchi & Saatchi, worked on branded content projects in the US in the mid- to late 90s. He says that advertising and media agencies are well-placed to come up with the right strategic ideas because that is what they do for clients all the time. But they need to move fast to get in on the act.

The recent 24 tie-up between Fox and Vodafone is one example that shows if agencies don't jump into this space, media owners and content producers may go it alone.

"The 24 mobisodes are very interesting in themselves. But the wider significance is that the entertainment industry wants to work with us to deliver content specifically for mobile users," the Vodafone chief marketing officer, Paul Bamford, said at the time.

The real reference point for branded content - BMW Films - managed a seamless merger of old and new technology. The idea for a series of short films made by top Hollywood directors and actors, only using BMWs as they lent themselves to the story, came from Fallon with help from an anonymous production company, Daley says.

"The opportunity does not just exist for creative or media agencies; it is a race between anyone who can deliver a message to consumers," he says. "Lots of people were involved in BMW Films and this is just one area where agency roles are starting to blend together."

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