Some thoughts about future value creation….

We’ve been hearing a lot lately about content marketing, that brands should be acting as publishers & that agencies should curate & develop connected experiences on behalf of their clients.

These connected experiences are often driven by ideas or platforms that are then fuelled by ongoing content.

The alternative is an expensive execution – which doesn’t really look like a future proof investment in a post facebook era when consumer (and client) expectations have changed.

A recent post from Seth Godin articulates the problem with making bacon in this environment:

‘Poets don’t get paid (often), but there’s no poetry shortage. The future is going to be filled with amateurs, and the truly talented and persistent will make a great living. But the days of journeyman writers who make a good living by the word — over.’

With 60hrs of new content uploaded to You Tube every 60 seconds – brands (and their traditional agency guardians) are having to deal with some new realities. Last year You Tube had over a trillion views. That’s 140 views per person on earth.

Today, high quality video content is an expected social currency for brands – and it should be short, frequent & free. Even better if it’s interactive, sharable, customizable & fun.

This is worrying for many agency models. This is no time for ‘the journeyman’ approach. And it’ll become even worrying when Google & Apple enter the Smart TV market.

There’s already a lot of talk over the last few months about the future strategy of You Tube. These guys are behaving in a ‘lean back’ fashion & want you to connect your iphone to your soon to be available Apple Smart TV. Apps like Clik are preparing for this trend.  This connection will create a behaviour where You Tube (and it’s millions of niched micropublishers) effectively become the worlds largest content broadcaster.  Bill was right. 

The Hollywood system (and the connected broadcast networks) are already reeling from start ups where well known ‘You Tubers’ have become bedroom superstars with millions of weekly views. And as this generation develops & the technology advances these bedroom superstars will take over your living room. And more importantly – they’ll form a relationship with the devices that you carry in your pocket. The ‘You Tuber’ & their interest driven content is mobile & ubiquitous.

Put simply – as people (and their You Tube champions) behave more like publishers & this published content coalesces into interest groups then the smart brands will need to navigate these connections like a spider on a web.

But at what price for agencies? And how on earth do you create value here? What are the commercial implications for agencies/brands in this future? Certainly not healthy if we keep calculating agency value/client profitability on hourly rates & time sheets.

The old days of brands (and agencies) creating the ‘big idea’ & being paid for the value this creates probably has a 3 year shelf life in it’s current form. As is doing a deal for the year with a resource packages & expecting margins to work themselves out ‘in the long run’. If everyone has the potential to publish & connect (including brands) – and good enough becomes good enough – then the quality space seems more important than ever. Again – no place for the faint hearted ‘journeyman approach’.

The IPA has recently republished it’s guide to agency renumeration & it looks at a number of new/experimental models that may hold some answers in to a world where the genie is out of the bottle.

The IPA sets out 8 models:

1. Retainer fee

2. Project fee

3. Variable fee based on actual time spent

4. Scale fee and bonus

5. Consultancy and concept fees

6. Licensing fee

7. Output or ‘off-the-shelf’ rate fee

8. Commission fee

All of these are applicable today. But one of them is very, very interesting for the future. I suspect that agencies will always (and quite rightly) expect to be renumerated for ‘the big idea’. But it strikes me that some new models need setting up to compensate for the ongoing promotion of this idea through a ‘connected experience’.

This where the combination of a retainer fee based on scoped projects &  licensing agreements becomes a very interesting combination.

RGA are one the agencies that I admire who have brilliantly reconfigured their resource base for the future & represent (in my opinion) what ‘full service’ might mean for brands over the next 3-5years. Some agencies may choose to take the high ground and focus on strategy/ideas/media integration but the RGA model seems to be the closest thing I’ve seen to being ‘all in’. And future proof.

To me the successful agencies of the future will have to build from ‘the big idea’. But they will also have to form very close bonds with content partners or even develop their own content studios so that the velocity & variety of  ‘idea fuel’ is of consistently high quality. Not journeyman standard.
We all appreciate that a good bonfire needs lighting – but loads of smaller fireworks need setting off to keep the party popping. And the mulled wine needs to flow. And the ticket prices for entry need to be just right. The entire brand environment & it’s cumulative experience need to percolate together over time.
But can you really have a breakthrough idea &  build quality – over time – with a large volume of ongoing content?
I suspect that if the consumer wants it (and brands/agencies can figure out the commercials) then the answer is yes.
Maybe this is the differentiating battleground for agencies over the next 5-10 years? Not just keeping focus on the quality but also the quantity in the idea – without compromising integrity through it’s life cycle.

In my opinion no-one has really nailed this type of approach for an ongoing campaign yet. Coke’s realtime superbowl stuff with the Polar Bears is the closest I’ve seen. But it was obviously a one off around a specific event.

What this – and some other examples –  have thrown up are some learnings around the economics of content creation:

1 – Microchunk it - Reduce the content to its simplest form & generate loads of variety.
2 – Free it - Put it out there without walls around it or strings on it as often as you can.
3 – Syndicate it – Let anyone take it and run with it – therefore encouraging a sense of co-creation.
4 – Monetize it - Put the monetization and tracking systems into the microchunk so that new connections drive revenue. This is the really hard part but take a look through PSFK can you’ll see plenty of daily examples. 

Now look at these 4 learnings & fast forward to 2020.

Web video has just overtaken broadcast media. That’s right.

In this future brands are attaching themselves to agencies (and ideas) that breakthrough, build new value & create an ongoing exchange with emotional content.  The guys at BBH labs have some interestings scenarios worked through on these landscapes. The winners/losers will be – as ever – the ones that figure out how to make the commercials work.

One interesting point is that the real threat to content creators/broadcasters may in fact be new forms of emerging content companies with no traditional business to defend; after all, journalism is stronger than ever while newspapers are dying.

Now this threat becomes very interesting when you apply it to the agency world & we start to look at the brand as a broadcaster of microchunked content.

Solving business problems with creativity & delivering transformative ideas seems like a good place to be right now to protect margins. But this is a crowded space ‘upstream’ & you really need to have something different to say here (and have the cases to back it up).

We all know that bad content doesn’t scale. Even average content isn’t good enough. The poor old ‘journeyman approach’ again. It’s just way, way to easy to click away.

But what we’re learning is that good content does scale. It can be innovative, engaging & always on. Now think about the creative/media relationship that we’ve traditionally had with something like radio – it’s personable, in your environment, it’s human & you form a bond with it. It’s intimate & emotional. My guess would be that in the future brands that apply this thinking to content will figure out how to turn an idea or platform into an ongoing relationship with consumers.

An idea that is disruptive enough to breakthrough isn’t enough on it’s own.  It needs to be intimate & frequent enough to build ongoing value.

Take this to future agency renumeration for ‘the big idea’ & the need for ‘ongoing idea fuel’.

With the right commercial framework, licensing deals & the right partnerships (or in house studios) the future agency model could get back to where it’s always been: connecting people to brands. But it will have to do this by balancing quality & whilst managing the margins to produce quantity.

In a world that enables connections to happen more frequently the winning brands/agencies will figure out how to monetize ongoing relationships in an entirely new way.

In my opinion it’s actually a good thing that the genie has been let out of the bottle & that our industry is grappling with the value issue. It’s oversupplied anyway & as the plates shift there will be – no doubt – a Darwinian process of natural selection.

When people & brands continually publish we have to recognize (and celebrate) that people are born creators. But that doesn’t mean they can propel an idea. Or spin a golden web of value driven connections made from quality content.  That’ll be left to the experts.

Smart brands (and their agencies) will create environments, platforms & interactive experiences that drive brand value (and revenue) from these connections. The right brand environments will be places where you want to spend time. The right platforms will be useful. The right interactive experiences will be likeable, linkable & will no doubt  have longevity too. Future brand ecosystems will need nourishment & that’s where the future agency will broker the relationships between content & consumer.

And the right connections – they’ll be worth renumerating around.

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One response to “Some thoughts about future value creation….

  1. Pingback: Interactive content that rocks | remasteredaccountman

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