How To Win the Advertising vs Branded Content Argument

Forget the whole debate around what makes an ad and what makes branded content. It’s all content. As Justin Drape, co-founder and chief creative officer of Australian advertising agency, The Monkeys, says content is “…just stuff”. You certainly wouldn’t pitch it to a client as such, but he has a point. Content is the stuff we watch, read and listen to. That’s why there is no definitive answer, regardless of which side of the content fence you sit on, to what distinguishes advertising from branded content. You end up in petty arguments around format, duration, authorship and worse still, entitlement. It’s a problem even the best marketers can’t crack.

Sean Cummins from Cummins and Partners is bothered by branded content because “since when has there been a need to disguise advertising”. This is a common defense from seasoned advertising practitioners like Cummins, but perhaps one that misses the point. It’s an Us vs Them mentality that pitches one form of content against another, rather than seeing it all as ‘stuff’ that only has value once designed and distributed in a creative and relevant way.

The truth is, branded content does not need to be defended. Brands not only want it, many of them are thriving because of it. It’s not a perfect science, and the democratization of publishing and content creation has certainly brought a lot of new players into the space that was once kept behind the relatively high walls of the advertising industry. Some of them are good at their craft. Others should keep practicing (a lot). But done well, branded content — which I define as content not limited to the conventions of traditional media placement — is an important and valuable marketing tool.

Similarly, the advertising industry does not need to feel threatened by the rise of branded content, nor feel as though it has to defend the value and relevance of advertising in this new content economy. Advertising is not going away. The industry is being challenged to keep up with client expectations, platform innovation and emerging audience consumption habits, but it is not at risk of becoming obsolete.

So what’s the real problem here?

I would argue that there is one fundamental difference between advertising and branded content and I can sum it up in two words. Business Model.

With the proliferation of new content channels, from social platforms to apps, games and the Internet of Things, there are now myriad ways of developing, distributing and amplifying content that require a new approach from traditional advertising. This does not mean that advertising agencies are excluded from this new content economy, but they do need to evolve their business model in order to compete effectively.

One of the most obvious but critical adjustments to the business model of advertising agencies is the ability to transition from low volume / high value content creation to high volume / low value content creation. It has been my experience that many ad agencies are keen to ‘own’ this low margin content production work, but when it comes to creating it, they are stuck in high margin thinking. Their creative and production teams are still geared to deliver high value content and their estimates are often anywhere between 3 to 10 times more than a nimble content agency just as capable of producing the work. Guess who wins the work?

I know what a lot of ad agency people are thinking… “Yeah, but the work would be shit”. Unfortunately, that’s not the case anymore, and the longer you try convincing yourself that nobody else is skilled or talented enough to produce exceptional content that answers the brief and wins hearts and minds, the longer it will take to catch up. There are plenty of young, hungry and very talented content creators in the marketplace now that are capable of producing work of an equal caliber to an agency team. It’s still the case that many agencies put junior creatives on the ‘small fry’ stuff like social content, online videos and editorial. There goes the creative advantage. Take Chris Phillips, an independent content creator in Melbourne who recently won a digital pitch for the launch of the 2015 Nike Tech Pack across Australia and NZ. Not a bad individual effort, and expect to see more talented freelancers like Chris emerge and disrupt the ad agency model.

At the heart of this new content economy is the need for agencies to be highly responsive, nimble and cost effective. Low margin work requires volume. Volume requires sustainable production practices that provide scale and value. So how do you develop a scalable content production model inside a traditional creative agency?

It starts with putting the right people in the right positions.

Some agencies might be best served developing a lo-fi content production department that is staffed with multi-skilled content creators. And we’re not just talking video content here. Any content team should be able to develop the full spectrum of content from live action video to animation, design, long and short form editorial, photography and audio.

You would also be wise to look at hiring heads of department who have experience operating low margin / high volume businesses as they already have the right mindset and will be able to tap into a network of affordable content creators that typically sit outside the normal advertising agency roster. You want people who see an opportunity in a $10K budget, not an insult.

If you’re planning to bring all content under your existing creative/production team, then you need to consider your rate card and ensure that you’re remaining competitive against this cheaper alternative — which includes client content teams. Many brands are now developing internal content capabilities, and this has already made an impact on the number and value of briefs being sent to agencies. If you’re going to offer content services, you need a robust offering that is flexible enough to fit in where the gaps exist. The plump, all-encompassing content brief is as rare as a branded content Grand Prix at Cannes, so don’t create a business model that relies on owning the entire process.

Another tip: make sure that your staff costs to revenue ratios are in balance otherwise you’ll never be able to make margin on branded content work. This is why the traditional creative agency model does not typically work in the agile branded content space. A content budget that sits around the $10K to $40K range often still requires the usual mix of account and project management, strategy, creative, production and content performance managers.

To ignore the growing demand for innovative content solutions is to short-change your clients and your business. Brands want to be found where their customers spend their time, whether that’s in front of a television, a smartphone, a laptop, a shopfront, a cinema, a newspaper or fridge. Traditional advertising content does not always resonate, or is not always appropriate with audiences in these spaces, so new forms of content are required to engage, entertain, educate and convert them in that moment.

If ad agencies want to remain relevant and competitive in this new content economy, and if they continue to insist that by owning the client’s brand that they own all of its content, then they need to start developing content practices that untie them from expensive production models and compete with the burgeoning industry of content creators that have the means and the talent to create compelling stories that elevate brands from the all the noise.