Media Spotlight: Has advertiser-funded programming's time come?

Branded content provides a new revenue stream for ad agencies, Jeremy Lee says.

It was striking that this was the first year in which the annual MiP television festival held sessions dedicated purely to advertising.

MiP, held last week in Cannes, is traditionally a marketplace for international television production companies to showcase their new programming formats to broadcasters. Usually on pristine white boats awash with Champagne.

But this time around there were discussions on the impact of product placement, barter advertising and branded content in the international market. It seemed timely. While reports predicting the death of spot advertising have proved unfounded, there is little doubt the TV industry is changing and this has implications for advertisers.

The reasons for this are well documented - the growth of digital TV platforms and personal video recorder ownership have put pressure on advertisers, broadcasters and production companies.

Advertiser-funded programming (or branded content) is designed as a way round this. It is, of course, nothing new - advertisers have been creating events, such as the Red Bull Flugtag or Capital Radio's Party in the Park, that have been televised for years. But special events are not suitable for all advertisers; branded content can be another way for them to connect with audiences.

Advertisers have little editorial input on sponsored programmes and the intellectual property usually remains with the broadcaster or production company.

The media value of sponsorship is calculated on a cost per thousand basis based on the duration and media value of the sponsorship idents, whereas the calculation for the value of branded content is worked on the cost of production.

"In the UK, there is no direct relationship between the funding by sponsorship from advertisers and the spending on the programme by a broadcaster," John Nolan, the head of commercial programming at the independent production company North One Television and one of the speakers at MiP, says. "One of the fundamental differences is that in branded content there is a correlation between the funding and the content."

Two years ago, Nolan was given the brief to find alternative revenue streams at his company, a division of All3Media, formerly the TV assets of the Chrysalis Group.

Since then, he has created a programme for the National Blood Service on five and the Heinz-funded Dinner Doctors series, also on five (which was investigated but exonerated by the Independent Television Commission).

Anecdotal evidence suggests that more advertisers are thinking of dipping their toes into the market. COI Communications recently announced that it wished to run more branded content and hired Drum PHD and enteraction tv to produce a series on behalf of Investors in People.

AFP can play a key role as part of an integrated ad campaign. Eight months ago, a consortium of agencies, production companies and broadcasters formed the Branded Content Marketing Association to promote AFP. Members include WCRS, Carat, Michaelides & Bednash, Grey, Mentorn and Universal Studios Network. The BCMA estimates the UK market will grow four-fold from £5 million in 2003 to £20 million in 2004.

But with some agencies finally coming around to the idea and production companies champing at the bit for a new revenue stream, all the pieces are falling into place.

Simon Wells, the head of commercial development at enteraction tv, said in his speech that it is a commercial imperative that broadcasters get involved in the process. "But no-one likes to talk about it because of fears they will be investigated," he warned, referring to the Dinner Doctors show.

Becky Morgan, the EMEA director for solutions at Discovery Networks, argued that there are benefits for everyone. As well as attracting additional revenue, she said AFP can give broadcasters access to better footage.

Morgan dismissed fears AFP could lead to a decline in the quality of TV programming. "The long-term value of our brand is more important than taking brands that are not suitable," she said.

Regulation might be a barrier to growth. Another part of the BCMA remit is to lobby to see greater deregulation of the branded content market.

All broadcasters in the European Union are forced to adhere to the European Commission's TV Without Frontiers legislation. This is only the minimum requirement - nations can also impose additional restrictions.

The BCMA members would like to see more done for advertisers. "The rules are out of date. If they are not changed the money will go to other media," Wells warned.

This would be a shame given that the industry is finally getting its act together on the matter.

EXAMPLES OF ADVERTISER-FUNDED PROGRAMMING IN THE UK

ADVERTISER PROGRAMME CHANNEL

B&Q The Real DIY Show ITV

Carling Carling Homecoming Channel 4

COI Communications Life Blood five

Heinz Dinner Doctors five

Jamjar.com The Real Car Show ITV

Michelin Be a Grand Prix Driver five

Microsoft Living in the e-world Channel 4

Pepsi Pepsi Chart Show five

PlayStation PlayStation Passengers Channel 4

Renault Scenic Scenic Days Out UKTV

Source: Branded Content Marketing Association.

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