Branded content industry rapidly evolving: study

The Branded Entertainment Landscape, the first of a three-part study that delves into the space, breaks down current trends and opportunities for Canadian content creators.
Pilot Felix Baumgartner of Austria prepares to jump from the altitude of 29455 meters during the second manned test flight for the Red Bull Stratos mission in Roswell, New Mexico, USA on July 25, 2012

Branded entertainment is no longer simple product placement or a “sponsored by…” tagline. As audiences shift to consuming more social and video content, brands are responding by becoming more integrated in their messaging across platforms. Funds and financing are shifting with them to create deeper, added-value branded entertainment, meaning there are more points of entry for indie producers to become involved in creating content in the space.

Those are two key messages from The Branded Entertainment Landscape, the first part of a three-part study entitled Branded Entertainment: A New Production Financing Paradigm, prepared by Duopoly’s Catherine Tait.

The Branded Entertainment Landscape, released by the CMPA at last week’s Merging Media conference in Vancouver, breaks down the current trends in branded entertainment. It also suggests opportunities for Canadian content creators to take advantage of new financing models in the space, which in the U.S. is reported to be a $44 billion-a-year industry, according to the Custom Content Council.

“It is important for us to analyze where we are in order to best position independent producers to thrive in this rapidly evolving industry. Because branded entertainment rides a fence between advertising and entertainment, the creative conversation is different and uses its own unique vocabulary. Financing models are also still evolving, with key issues like IP ownership still being worked out on a project-by-project basis,” said Duopoly’s Tait in a statement.

Financing models, particularly in Canada, are in flux, the report states. While the traditional model has been comprised of brands fully funding campaigns, the proliferation of multiplatform campaigns and social media content has changed the status quo. Increasingly, agencies or producers who develop and pitch concepts to brands are in a position to take an ownership stake in the property.

The Canadian model presents a separate set of challenges, in that Canadian producers must have ownership in a project to qualify for tax credits, as per CAVCO regulations, and further, programming that is deemed “advertising” doesn’t qualify as Canadian content. It’s a catch-22, in that the Canadian financing incentives are also a cost-savings opportunity for all parties involved.

While broadcasters have traditionally held the reins in the space’s “balance of power”, the report states, digital platforms and channels, creative agencies and now indie producers, are gaining momentum as more powerful players.

The definition of branded content has broadened over the last 15 years, into what Forrester Research says is “content that is developed or created by a brand to provide added consumer value such as entertainment or education.”

The content is designed to build brand affinity, not sell a product or service, with brands becoming story-tellers who are facilitating a two-way conversation and deeper consumer engagement, the report states.

As evidence of this shift, in 2012, the Cannes Lions advertising awards added a branded content and entertainment category; agencies , prodcos and broadcasters alike have begun launching in-house branded entertainment divisions or initiatives; and veteran producers and marketing experts have branched out to launch their own indie branded entertainment companies and consultancies.

According to the study, video is the fastest and most consistently growing medium for content marketing, with brands being important players in the funding, promotion and distribution of this video content.

The report calls affinity content “perhaps the most powerful new entrant into the world of branded entertainment.” The brand doesn’t appear in the content, but instead acts as the publisher of the content, which conveys a message that aligns with the brand’s values. The report cites Red Bull’s Stratos jump (pictured) as a gold example of a project that enhanced the brand’s status without explicitly mentioning the brand in the content.

Other varieties of branded content pinpointed in the study include sponsored content, product placement or integration, native advertising and brand-centric original content.

The new entertainment landscape has also been affected by a shift in consumer control in how, when and where viewers consume content; lower costs of content production and distribution due to the explosion of platforms on which to deploy it; digital analytics and ROI measurement; and the increased availability of cross-platform opportunities and converged media campaigns.