Last week was a scary old time to be launching a business - as the founding directors of Kameleon will, no doubt, freely acknowledge. While the financial and banking infrastructure of the West was beginning to crumble round everyone's ears, Richard Armstrong, Anthony Edwards and Mark Webster were saying goodbye to cosy, safe and rather well-paid positions at MindShare to set up an agency to deliver branded content for advertisers.
Unlucky, you might think. Or, alternatively, you could argue the current climate represents just as much of an opportunity as a threat. With advertisers looking to trim their conventional TV ad budgets, branded content could begin to look like an even better-value opportunity than it is already.
And, of course, the Kameleon threesome argue that their new agency is uniquely placed to turn that theory into reality. As Edwards points out, they have a "wealth of experience of developing, managing and distributing content-rich ideas for brand owners, both locally and internationally".
Edwards was the co-head of content at MindShare, while Armstrong and Webster had similarly senior positions in strategy and sponsorship respectively. They maintain that Kameleon breaks new ground in being able to bring that mix of skills to a new agency absolutely dedicated to branded content. After all, they imply, existing specialists tend to be bolt-on operations at media agencies.
But that's not the only unique selling proposition in play here. Because some of its start-up equity has been provided by ALL3MEDIA, one of the biggest players in the UK independent television production market, with operating units that include ARG, Bentley Productions, Cactus TV, Company Pictures, IDTV, Lion Television, Lime Pictures, Maverick Television, MME Moviement, North One Television, Objective Productions, South Pacific Pictures, Studio Lambert and Zoo Productions.
Other production companies may claim to have branded content divisions, but, in reality, that often means they employ one executive in a small, dingy office at the end of a corridor. In contrast, although Kameleon has an inside track with one of the sector's bigger players, it still retains its independence.
The market will watch closely. But there will be those who argue that the timing of Kameleon's launch is unfortunate for reasons other than the end of the capitalist system as we know it. Sceptics will point out that, as it happens, branded content is currently under review in the UK, thanks in no small part to some tough talking by Andy Burnham, the secretary of state for culture, media and sport. In June, he made it clear that he disapproves of any (further) attempts to introduce US-style product placement into British broadcasting, though he has since indicated a more open-minded attitude in the recent weeks of a consultation period.
1. Over the past decade, UK advertising and media agencies have been building their branded content in rather piecemeal fashion. Perhaps the best-known is Drum PHD, which evolved out of PHD's sponsorship operation in the 90s. But most of the large holding companies have international branded entertainment divisions, for instance, MindShare Entertainment, that have evolved out of a longer experience of this business in the US films and TV markets.
2. UK production companies have also lagged behind their US counterparts when it comes to developing formal structures to sell advertising partnerships. One of the highest-profile appointments in recent years saw Chris Shaw, then the executive vice-president of Universal McCann EMEA, join 19 Entertainment in March 2006 to develop programming for the Honda F1 Racing Team.
3. In August, the former Endemol UK chief executive, Peter Bazalgette, launched Brandirector, an agency that seeks to broker deals between independent producers, media agencies and their clients. ZenithOptimedia and Omnicom Media Group have signed up on a trial basis, as have producers such as RDF Media and Campbell Ryan Productions.
4. Estimates about the potential value of this market in the UK vary wildly. It's telling, however, that the most interesting projects we've seen recently (for instance, Nike's Joga Bonito initiative of 2006) tend to be initiated by advertisers rather than production companies, and are developed on an international basis.
WHAT IT MEANS FOR ...
RIVAL BRANDED CONTENT OPERATORS
- Media agencies will argue that, over the long term, they are destined to dominate this sector - and they will not be slow to draw analogies (and comfort) from the evolutionary curve of the broadcast sponsorship market. In the early 90s, sponsorship was proving terribly hard to get off the ground - and it only gained momentum with the arrival of specialist agencies. It wasn't long, however, before clients came to accept sponsorship as a routine communications-channel option, and sponsorship expertise soon became a part of the offering of all mainstream media agencies.
- So agencies will tend to welcome the arrival of the likes of Kameleon, arguing that, if new specialists stimulate the market, this will inevitably benefit mainstream media agencies over the longer term.
- Likewise, it might not be easy for Kameleon to make the running in potential deals involving programme projects being developed by production companies outside of the ALL3MEDIA stable.
- In a downturn, the cost of conventional TV spot advertising can be expected to fall. Even so, advertisers will be looking to trim their traditional spend patterns - and newer opportunities such as branded content may seem even more attractive. So they will welcome even greater choice when it comes to the spread of agencies and business models active in this sector.