On October 13, 2005 Apple Computer Inc. and ABC made history by selling episodes of ABC's television series "Lost" for $1.99 through Apple's iTunes Music Store. It's important to note that sponsors and ads were removed from the downloadable version of "Lost".
The deal between Apple and ABC was a cross-promotion. First, it signified the first time a show was made for legal downloading over the web right after it aired. Second, the availability of "Lost" through iTunes promoted the recently launched iPod Video.
Apple's partnership with Walt Disney Co, the parent of ABC, also includes episodes of the popular "Desperate Housewives," "Night Stalker" and That's So Raven."
What's interesting is not only the mobile aspect of this deal but also the questions and implications this deal means to interactive advertising and to the entertainment industry.
Several questions come to mind:
- How to marketers participate in this new channel?
- What does this signal in terms of media consumption habits?
- Will consumers be willing to pay for this type of content?
"The Apple deal with Disney-ABC basically offers an additional way to make some of our content portable," Albert Cheng, executive vice president of the Digital Media Group, Disney-ABC Television group, told iMedia.
"These downloadable shows are supplemental and drive more awareness around the shows. It offers another opportunity for viewers of the shows to stay current. It's not a substitute but an enabler," adds Cheng.
When asked about ad opportunities for marketers on these downloadable shows, Cheng says, "The Apple partnership is one type of model -- paid media -- but we are open to other advertising models. We recognize the great ad partnership we have, but the question is how do we create a platform that serves advertisers well."
About the implications these new mobile content bring up such as guild, distribution and sponsorship, Cheng comments, "We're still working out the implications of the guilds. Second, I think the message we are sending is that this video content is being pirated where nobody gets to see it. By offering some of our TV content on the Apple iPod Video we can be proactive in a market that -- due to illegal download and piracy -- currently doesn't let us participate."
In a recent Los Angeles Times article, David Colker, in his Technopolsis column, reviewed the new iPod Video content from ABC. He writes that "although it will never replace a full-size television, it is likely to appeal to anyone who wants to watch TV shows or other videos while commuting on mass transit, traveling, sitting in waiting rooms or working out on a treadmill."
Although Colker, in his article, urges consumers to wait a bit to purchase an iPod Video due to the meager content, his overall review of the content and player is positive.
On October 31, Apple announced that its iTunes online service has sold a million videos in under 20 days -- proving that consumers are willing to pay this mobile VOD content.
"Selling one million videos in less than 20 days strongly suggests there is a market for legal downloads. Our next challenge is to broaden our content offerings," Apple CEO Steve Jobs said in a statement.
During the same week Apple launched its iPod Video, another company, EchoStar Communications Corp and its DISH Network satellite TV service, rolled out its PocketDISH. The device is basically a portable digital video recorder (DVR) that also plays MP3s, stores and displays photos.
"Our content is more immediate than the content Apple iPod Video provides. For example, if you're a DIRECTV or Dish Network subscriber, you don't pay for the additional content. You're already paying for it so all you have to do is download it to your PocketDISH. This is another way for you to enjoy your content," says Mark Cicero, spokesman, PocketDISH.
Like TiVo and other DVRs, PocketDISH users have the option of fast-forwarding through the content -- including ads.
When asked about the opportunities marketers have with PocketDISH's mobile video content, Cicero comments, "As far companies possible preloading content on the PocketDISH, such as sponsored content, we can't discuss that as it's too early in the game."
But it's not just ABC and DIRECTV getting into digital mix. Recently Warner Bros. film studio reorganized its home video division with an emphasis on internet, wireless and other digital technologies. The new unit will be called the Warner Bros. Home Entertainment Group and will be run by Kevin Tsujihara.
Although they haven't disclosed any mobile VOD plans, it's clear that they are looking towards digital and mobile aspects when Tsujihara told Reuters, "We were organized based on very traditional windows that had been in place for 20 years. Consumers are saying they want more convenience and more portability and we needed to be responsive to that."
During the first week of November, Sprint Nextel announced that excerpts of NBC's "The Tonight Show With Jay Leno" will be available for download by Sprint mobile customers. Sprint TV Live was launched in September as part of a $9.99 per month subscription. The service also includes live feeds from the Weather Channel, MSNBC, Discovery and Fox News Channel.
"Apple's success certainly reinforces the view that there is a demand out there. How big? It's too soon to say. But it's for real, and it's going to be with us for a long time," Bob Wright, chairman of NBC Universal, told the LA Times.
In October Disney, which is the parent company of ABC, also teamed up with America Online to promote their film "The Chronicles of Narnia: The Lion, the Witch and the Wardrobe" through AOL's Moviefone property. Although not intended for a mobile channel, the deal reflects an interest in cross-media campaigns.
"All credit is due to Apple for pushing the envelope with portable VOD," says Erik Flannigan, VP, programming, AOL.
Flannigan says that there will be ad opportunities for this mobile video channel but the notion of video podcasting and mobile VOD has just been born. "Network TV on demand is brilliant because it's portable, but there are so many issues such as rights, music and how to divvy out the $1.99 that Apple is charging for episodes of 'Lost.' But somebody had to go first, and those questions, including advertising, are going to get sorted out."
iMedia Contributor Joyce Schwarz says she speculates that adult content might be the killer application for this new channel, and several adult related sites have started to build content for Apple iPod Video.
The shift of TV to mobile video is still in its infancy, but there is potential for marketers within this channel. As seen with Apple's one million downloads, consumers want this content. Marketers know that the audience is tech savvy, so targeting them could depend on the content. For example, a record company could buy ad space on music videos, automotive companies on NASCAR races, et cetera.
But as this mobile video continues to develop, other questions arise.
- How do marketers track the mobile TV audience?
- Will consumers be willing to pay for content that is front loaded with sponsors?
- Will other networks and studios jump on the mobile TV bandwagon?
- How might the networks charge for commercial time within this mobile channel?
Although Flannigan did not disclose any of AOL's plans for mobile VOD, he states, "We know that we want to get it right when we do. As for advertising, we want to be extremely smart how we weave it into the content."
It's important to watch this technology as it evolves to see how marketing can fit into the mix. Consumers and marketers will be watching this 1-½ inch screen to see what happens.
The agency says...
Hollywood rewards copycats. So does Madison Avenue. As children, we are taught not to copy other people's work, but as adults, we are encouraged to DO EXACTLY WHAT THE OTHER PEOPLE DID TO MAKE MONEY. Call it free enterprise if you will, but how else can we justify Pepsi after Coca Cola, "K-9" after "Turner and Hooch" and those stupid day-glo rubber bracelets with encouraging words printed on them that everybody cashed in on after Lance Armstrong made them fashionable?
So when you are an agency tasked with pitching on a project that may or may not be awarded to you, what happens to those wonderful ideas that you and your team brainstormed? Ideas, after all, are precious commodities. Each and every idea is special. There are no bad ideas, just bad people. And sometimes, when people don't have any ideas of their own, they just DO EXACTLY WHAT THE OTHER PEOPLE DID TO MAKE MONEY.
It is a story repeated over and over in every business in the world.
They stole my idea.
What can you do, and how can you stop it from happening?
The sad truth is, you can't. A good idea is just that: a good idea. An agency is selling not only the idea -- which sometimes is itself an amorphous moving target -- but also the interpretation of said idea and, ultimately, its execution.
While I don't have a solution, I do have an anecdote to share:
Back in the early days of online movie marketing, my company pitched on a project that we did not get, much to our surprise. We were convinced that we should have been awarded the project, as we have always enjoyed an extraordinarily high success rate of turning pitches into projects, and our egos just couldn't accept defeat. But, we finally let it go and turned our attention elsewhere.
A few months later, people from that same studio called us with an unusual request. They wanted us to do a special feature for the film website that they had awarded to someone else. Intrigued, we accepted the job. They explained to us that they had conceived of a fully fleshed-out idea, and they just wanted us to execute it.
When we arrived for the meeting, we were pitched -- verbatim -- a very prominent feature from our original proposal: the proposal that they didn't want.
So now, they wanted us to execute their "exciting and original new feature concept," which was really our old, mothballed, unwanted feature concept that had been exiled to the sad and lonely island of misfit ideas.
Bottom line: People will do seemingly anything it takes to DO EXACTLY WHAT THE OTHER PEOPLE DID TO MAKE MONEY.
There is no combative cure. Our business is built on relationships, mutual respect and quality of work. The key, of course, is to have a surplus inventory of ideas and the ability to create new ideas out of thin air on the spot, anytime, anywhere.
Because, as a creative agency, that is our job.
The client side says...
You cannot protect IP during the pitch process. Period. Get over it. Your agency gets the RFP, decides to pitch and believes it has come up with that one thing the client has never thought of. I spent 10 years as a creative and still even I am amazed at the paranoid delusions on the agency side of the client "stealing" their idea. Do you really think you are so creative that it trumps years of experience with the brand on the client side? That your three weeks with the brand, two all-nighters and one strategy session will have provided you with that nirvanic moment of Zen that allows you to see the client's brand so clearly? Wow, you really are drinking the delusional Kool-Aid of advertising: your own.
I understand. I was convinced that several clients had stolen RFP pitch work after I had seen almost identical executions months later, but that was before I spent the last half decade client-side.
The client stealing your idea is about as likely as you sleeping with someone not in the ad business. I just sat through a pitch with five agencies. Many ideas were similar, and two were almost identical. In fact, if we execute that idea, I guarantee you one agency will be convinced that we stole it from them. Why does so much work look the same in the pitch? The "brief." You are all ideating off the same document. Where you end up is often quite similar.
Don't worry; it is not the ideas that are brilliant, it is the execution of those ideas that bring brilliance into reality. Without that, without you, without your understanding of all of the subtle nuances of the campaign you just presented, even if the client does take aspects of the idea, it will probably be the worse for it. It's in the execution that the value lies. It is in your people.
Agencies don't always fully appreciate what business they are in. If their "ideas" are so valuable then why do they bill clients by the hour instead of by the idea? "Time" is your compensation model, so stop acting like it's your ideas that we are paying for. In the pitch, you're doing volunteer work.
Look, it's your choice; you do not have to participate in the pitch. You really don't. And if your ideas are what you value, then charge for them, and reward your people based on that model. Otherwise, shut up already with your they stole my idea.
Cover off on the basics
Agencies are struggling with a tough question of how to best protect their intellectual property during RFPs. That's because over the past few years companies have really tightened up their RFPs, including clauses that legally entitle them to the responses. Here's a typical clause from a Fortune 500 RFP: "All responses and materials submitted in response to this RFP shall become the sole property of the company issuing the RFP."
To participate in large RFPs, agencies have to agree that ownership transfers from them to the companies issuing the RFPs. Companies insist on this clause, and even the largest global agencies reluctantly agree to it. We understand these companies are not trying to steal our intellectual property, but instead are directed by their lawyers to include the clause, as it protects them from possible future legal claims to campaigns, ideas and concepts.
As a veteran of many, many, many RFPs, my recommendation is to cover off on the basics.
- First, document to the person managing the RFP that 1) your agency is uncomfortable with the ownership clause, 2) that your understanding of the clause is to solely protect the company from future litigation and 3) your expectation is that the company will not under any circumstances use any of your IP without written agreement and appropriate compensation.
- Second, copyright all the materials you are delivering/presenting.
- Third, deliver summarized written/or presentation responses and verbalize much of your IP so it is more in your control.
And here's a final word of advice. Keep in mind that the suits at the Fortune 500 are reasonable, fair business people. A few years ago, we won a RFP issued by a highly prestigious Fortune 100 company from the global AOR incumbent. The incumbent AOR, embarrassed, appealed the decision at the Board level and offered to provide the services gratis. The Board agreed. Ouch!!!
While this happens, the game's not over. Make your case to the individual running the RFP. In this instance, given that the client wanted to use our IP, it agreed to pay the full cost of completing the assignment and also chose us as AOR for another brand. Bravo!! That's fair play in action.
It's your IP: Don't give it up without a fight.
Survival of the fittest
Here are two better known secrets in advertising:
- There's no such thing as loyalty
- Ideas are near impossible to protect or charge for
Today more than ever, agencies -- especially small- to mid-sized digital shops [full disclosure: I work at one] -- are challenged with confronting these secrets and establishing better practices for maintaining loyalty and protecting ideas during the pitch process and beyond.
But why is this so tough to accomplish?
For one, we've never before witnessed the democratization of idea flow at this scale and speed. The web has connected professionals worldwide with a limitless bounty of fresh thinking and innovation. Hundreds, if not thousands, of very bright individuals are monitoring the marketing landscape every day and evangelizing the best of the best (and themselves). Seneca, a Roman philosopher, may have nailed the problem/beauty of the web: "The best ideas are common property."
Another factor is the capacity of ways to market in the digital space, which has shattered the parameters of the traditional canvas (and put up for grabs enough marketing dollars to support brand new businesses). Imagination, media-agnostic strategy, creativity, multi-disciplinary collaboration and technology acumen win here, not formulaic push tactics that fill 30-second spots or a printed page. This translates into significantly reduced barriers of entry for agencies or services able to fill that digital marketing void, making for a more competitive landscape.
The third intensifier is the prevailing uneasiness on behalf of marketers (and the old guard from traditional agencies) to truly embrace a new paradigm in marketing being shaped by an on-demand and participatory digital world. This is especially true in a climate where young digital agencies are clamoring to establish legitimacy and approval, and working to disassociate from past blunders (the bubble burst) and modern day snake oil hucksters. The burden of proof is squarely on these agencies, making it challenging to ask for much more than a chance to demonstrate credibility.
In this environment, Darwinian logic rules. Not so much handshakes and martini lunches, but by sticking to a DNA that will survive and adapt, agencies can maintain the prospect of loyalty and intellectual ownership.
Here are a few of our best practices for doing so:
- Execute. A great idea is only as good as its execution. Too often, our imagination outpaces the possible and disappoints in implementation. Don't pitch ideas that can't be executed, and know your limits. Reputations can be won or lost in execution. Further, if you can prove that no one can execute your ideas like you can, there is less risk those ideas will be stolen.
- Be transparent. Digital is still the Wild West, and when anything goes, transparency can often be put aside for survival and land grabbing. Agencies that remain transparent and honest will establish longer term legitimacy and ensure business relationships that are mutually beneficial. This doesn't mean giving ideas away for free; it is about establishing a base of dependability by being open and honest about what is being done for a client, and how much that is going to cost it.
- Consistency. Setting standards of excellence can be a lost art when scrambling to finish a dozen proposals in a week. Suddenly, throwing a bunch of darts at once and hoping a couple land isn't all that irrational. But agencies that are able to prioritize, be selective and throw the darts with precision will establish consistency in product that will build a reputation; something that is far more sustainable in the long term than quick wins.
This is by no means exhaustive, and in the end a company's DNA is a function of its people. But in an environment where the best ideas will and should win -- no matter their origin -- agencies need to know what they're made of and know if it's working. This actually makes me very optimistic. By agencies focusing on a winning DNA, competition will only make us all better at what we do, and the strongest indeed will survive.
Jodi Harris is managing editor at iMedia Connection. Read full bio.
The marketer's obligations
The heart of the matter is that consumers sometimes can't distinguish between editorial journalism and paid advertising. Consumers are smart, yes, but the use of native requires that advertisers practice ethical advertising, employing some self-imposed rules and considerations that may not come into play with other ad types.
A large part of a publisher's unwritten contract with its readers is that they will provide editorial content of real and consistent value in exchange for the reader's loyal eyeballs. Because native ads transcend from the dedicated ad space to on-page real estate usually reserved for editorial content, this contractual obligation applies to the native ads as well. Ads that are out of context or devoid of genuine value turn readers off and put the publisher/user relationship in jeopardy. Even when the native ad content is appropriate, it's incredibly important for publishers to present a clear disclosure of paid content. Readers are accustomed to source transparency in journalism. All content carries some bias but readers must know the source to understand the bias. This rule is particularly true for native ads.
Further to this point, a recent study by the IAB found that brand familiarity and trust are critical in driving consumer interest in sponsored content. Betraying that trust through deceptive presentation could be the difference between a good execution and one that damages not only the publisher, but also the brand's reputation. Martin Sorrell, the CEO of WPP Group, the largest agency holding company in the world, and an expert on brand reputation agrees that transparency and clarity in native executions are paramount to brand value preservation.
Still, those criteria are hardly black and white, and brands can't answer all of their questions about native by looking at transparency and trust. Organizations like the IAB have stepped in to define certain native terms and outline the considerations marketers must make while determining whether to employ a native ad unit.
Here are the IAB's six marketplace considerations, taken from the organization's Native Advertising Playbook (note that these guidelines mostly focus on context, clarity, and function, but do not address value to the reader).
- Form -- how does the ad fit with the overall page design? Is it in the viewer's activity stream or not in-stream?
- Function -- does the ad function like the other elements on the page in which it is placed? Does it deliver the same type of content experience, or is it different?
- Integration -- how well do the ad unit's behaviors match those of the surrounding content? Are they the same, or are new ones introduced?
- Buying and targeting -- is the ad placement guaranteed on a specific page, section, or site, or will it be delivered across a network of sites? What type of targeting is available?
- Measurement -- what metrics are typically used to judge success? Are marketers more likely to use top-of-the-funnel brand engagement metrics or bottom funnel ones?
- Disclosure -- how is this ad product identified as such?
So how does a bad native ad differ from a good one? It's often easy to identify the bad because of how hard it is to clearly identify as advertising. It fails to follow a reasonable code of ethics pertaining to disclosure and reader value and at its worst, it intentionally misleads the consumer. Good native contributes to the reader experience and is clearly delineated from the editorial content. Here are some examples of both bad and good native ads.
The Atlantic Scientology piece
Two years ago The Atlantic's native ad for the Church of Scientology went online, then in response to significant reader backlash, it was quickly removed. The ad remains the most commonly cited example of how poorly executed native ads can create a PR firestorm.
Though the content was marked as "Sponsor Content" via a bright yellow banner above the headline, the article was blatantly favorable towards the church.
The piece looked like an Atlantic article and was placed where a lead editorial article would usually run, but the lack of journalistic integrity in the content was obvious and out of line with the rest of the site. As the Washington Post points out, that distinct editorial voice around a controversial institution, combined with issues like a tighter comment policy, really angered readers. At the end of the day, this execution actually did more damage to the publisher than to the brand itself.
In an attempt to keep consumers on their sites for longer periods of time, many publishers have added "recommended content" modules to the bottom of their article pages. These modules often take readers to other articles on the site similar in subject matter to the piece they just finished. But there's a growing trend of sprinkling advertising among these recommendation modules, resulting in reader confusion.
The price of these units is either very low or they are bought on a cost-per-click basis, which attracts a disproportionate volume of bottom-of-the-barrel advertisers. In an effort to attract clicks to what are usually unattractive offers, the creative executions frequently employ nonsensical or inappropriate imagery -- scantily clad women are one popular creative strategy. For some reason, President Obama is a popular image in these ads as well, likely because his image makes it seem that the ad is an important news article.
These publishers further complicate matters by using language like "from around the web" or "promoted stories," which confuses the consumer on whether these are pieces of content from a reputable site or just a ruse created by disreputable advertisers. If a consumer can't tell the difference between editorial content and advertising, then it's safe to say that they'll have a negative reaction to the brand messaging. The publishers shouldn't allow it, and in most cases reputable brands won't buy it. But at this stage the rules of native advertising are self-policed, so it is up to the ad community to raise and maintain an ethical standard.
Lincoln and the L.A. Times
If you need a hint of the delicate balancing act in native advertising, all you need to do is read the headline of this re/code article: "Another Native Ad You Might Actually Want to See."
The referenced ad comes from Lincoln, and was featured prominently on the Los Angeles Times' homepage. Consumers who clicked a banner ad were taken to a page that housed a Lincoln video featuring the singer Aloe Blacc. The ad, distributed by the native company, DistroScale, looked just like an L.A. Times article, but declared itself an advertisement in very clear text across the top. It also gave the reader an experience worth watching.
This is a terrific example of a brand using native to distribute content that lives elsewhere. As re/code points out, consumers can watch the same video spot on Lincoln's YouTube page, but this native execution on the Times' homepage opened it up to a new audience.
Prudential and Entrepreneur
This is a great example of content blending in with the editorial tone and style of a publication. A teaser for Prudential's native ad comes within the main column of content on Entrepreneur's homepage and is clearly marked as "Sponsor Provided Content," along with a brand logo and the explanation that it is presented by Prudential.
After clicking through to the page where the content lives, consumers can watch a video and complete a short interactive survey to find out how much they'll need to save to retire in the location of their choice. The teaser and page, executed by the native ad platform Nativo, combine interactive elements with contextual content and features that appeal to the publications' audience.
Entrepreneur has run similar ads for other brands, including Northwestern Mutual. Clearly, financial institutions want to cultivate real connection with the site's entrepreneurial audience, and are choosing to develop interactive content to raise brand awareness, deepen engagement, and generate investment leads.
Native advertising carries very clear benefits for publishers and advertisers. For the publishers, native represents a growing revenue opportunity, something that can help them employ talented writers and continue to produce the kind of journalism that attracts readers.
For advertisers, native is a canvas that allows for elaborate creative executions and new ways to define the brand in the digital space. Successful executions may win a brand accolades from the media and advertising communities, but most importantly, they attract consumers' attention.
It's this final piece -- the consumer's trust and attention -- that can make native advertising a high-wire act. Getting that attention is the first part of the equation, but maintaining that trust and providing some value back to the receptive audience is the only way for brands to succeed through native.
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"Concept of problem in business" image via Shutterstock.