Posts tagged ‘ATT’

Billion-dollar ad agencies versus twelve-dollar branded content

One of the warnings I give clients (as well as bright-eyed creatives) who wish to produce “branded content” for the interactive space–they typically have in mind some sort of video that they hope will catch fire and become part of the popular culture–is that they must understand they’re not simply competing with other branded content for the attention of consumers. They’re also competing with every amateur video on YouTube that shows a guy stepping on a rake and accidentally hitting himself in the nuts.

Clay Shirky’s recent post, “The Collapse of Complex Business Models,” does a nice job of explaining why big organizations struggle to react to the threat posed by cheap, low-quality competition:

In the mid-90s, I got a call from some friends at ATT, asking me to help them research the nascent web-hosting business. They thought ATT’s famous “five 9’s” reliability (services that work 99.999% of the time) would be valuable, but they couldn’t figure out how anyone could offer good web hosting for $20 a month, then the going rate. No matter how many eventual users they assumed, $20 didn’t even seem to cover the monthly costs, much less leave a profit.

I started describing the web hosting I’d used, including the process of developing web sites locally, uploading them to the server, and then checking to see if anything had broken.

“But if you don’t have a staging server, you’d be changing things on the live site!” They explained this to me in the tone you’d use to explain to a small child why you don’t want to drink bleach. “Oh yeah, it was horrible”, I said. “Sometimes the servers would crash, and we’d just have to re-boot and start from scratch.” There was a long silence on the other end, the silence peculiar to conference calls when an entire group stops to think.

The ATT guys, part of a company so committed to the sacred dial tone it ran its own power grid, had correctly understood that the income from $20-a-month customers wouldn’t pay for good web hosting. What they hadn’t understood, were in fact professionally incapable of understanding, was that the industry solution, circa 1996, was to offer hosting that wasn’t very good.

The world of content creation is facing a similar shift. YouTube sensation “Charlie Bit My Finger” is the most viewed minute of video in the last five years (175 million views and counting). It’s an amateur production–too grand a word really, for something so simple–with no budget, yet more people watched it than all the so-called “viral” videos that agencies spent millions of dollars making. How will big advertising  compete against such bottom-dollar threats? Emulating “Charlie Bit My Finger” is not the path. The video was dumb luck, and the people who captured the moment are unlikely ever to capture anything as interesting again.

Offhand, I think there are a couple of models that could work. First, agencies could set up something like a content greenhouse in which they try to grow their own low-cost solutions. Assignments could be given simultaneously to dozens of film students (for example). (Perhaps for a different product the assignment could be given to dozens of moms.) They’d be asked to come up with branded content on a budget of essentially zero. (Think of this as the logical conclusion of Adam Morgan’s argument that if you are having trouble coming up with a great creative idea, you should cut the budget in half and start over.) Sometimes you’ll get nothing of value, but that’s OK, because you haven’t bet a million-dollar production budget on the outcome. The key to the concept is low risk, high reward. For the film students in the greenhouse, their compensation would be the popularity of the work itself, and perhaps some sort of promise of future employment. That may not be a compelling proposition for a grizzled forty-something creative director, but it could be quite appealing to an ambitious, young hoodie-wearer trying to make his way in the world.

Another possibility is that something analogous to the early days of silent film could emerge in advertising. Think about what happened in the second decade of the 20th century: Using rather crude technology, a few auteurs emerged who were able to consistently capture magic on film. No complicated special effects, no $100 million budgets. Just whatever they were able to make happen in front of the camera’s aperture. It came down to the genius of one man. Could something similar happen in advertising? Perhaps some of the agency world’s creative superstars will shed their cumbersome organizations and set up shop with a $300 camera and a couple of tungsten lights. They may even offer to produce branded content for free and be paid by the view. For the people who are really good at it, it could be the smartest business deal they ever make.

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April 8, 2010 at 10:26 pm Leave a comment


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