branded content - inma€¦ · source: digiday, wtf is native advertising report, 2015. v5...

Branded Content This is Not Your Father's Advertorial

May 11, 2015

V5 150506_INMA Speech Large Format_v8_FA notes.pptx 1

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The Power of the Press


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Media in the center of a storm of turbulence, uncertainty...

Unpredictability

Industry rate of change

Household Products

Biotechnology

High

Low

Slow Fast

Aerospace & Defense

IT Services

Internet Software & Services

Internet & Catalog Retail

Insurance

Industrial Conglomerates

Life Sciences Tools & Services

Oil, Gas & Consumable FuelsOffice Electronics

Multi-Utilities

Multiline Retail

Metals & Mining

Media

Machinery

Leisure Equipment & ProductsIndependent Power & Energy

Household Durables

Real Estate Management

Real Estate Investment Trusts

Pharmaceuticals

Personal Products

Paper & Forest Products

Consumer FinanceConstruction Materials

Construction & Engineering

Computers & Peripherals

Communications Equipment

Commercial Services & Supplies

Commercial Banks

Chemicals

Capital Markets

Building Products

Wireless Telecommunication Services

Trading Companies & Distributors

Tobacco

Thrifts & Mortgage Finance

Textiles, Apparel & Luxury Goods

Specialty Retail

SoftwareSemiconductors

Road & Rail

Beverages

Automobiles

Auto Components

Airlines

Air Freight & Logistics

Hotels, Restaurants & Leisure

Health Care Technology

Health Care Providers & Services

Health Care Equipment & Supplies

Gas UtilitiesFood Products

Food & Staples Retailing

Energy Equipment & Services

Electronic Equipment & InstrumentsElectrical Equipment

Distributors

Electric Utilities

Diversified Telecommunications

Diversified Financial Services

Diversified Consumer Services

Containers & Packaging

Cost of

being wrong

Low

Medium

High

Note: Based on ordinal rankings along each dimension. Does not include Marine, Transportation Infrastructure, Water UtilitiesSource: BCG analysis

Media


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…translating into a need to transform the print business while growing digital

International newspaper

revenues flat over near term …

92

96

100

104

108

Total revenues, indexed to 2009 (=100)

2015e2014e20132012201120102009

0

50,000

100,000

150,000

200,000

2009 2014e2010 20122011 2013 2015e

Revenue Global, $ M

Print Revenue

Related Digital Platforms

… but this relies on digital revenues

comprising a larger share of the total

161 155

Source: PwC, BCG analysis


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Mature markets face a significant decline in print media circulation and advertising revenue

4.5-7.0

-9.6-3.1

-5.93.3

-9.6-9.1

-4.0-8.6

-3.2-2.2

3.81.0

10.01.8

31.1

-10.8-8.4

-6.4-5.1-5.1-4.8-3.9-3.5-3.3-3.2-2.9-1.7

0.00.80.9

3.14.4

Russia1United Kingdom

ItalySouth Korea1

FinlandTaiwan2

SwitzerlandNetherlands

GermanyUSA

FranceJapan

Mexico1BrazilIndia1

China1Indonesia

1. 2009-2012 CAGR; '13 not available 2. 2009-11 CAGR; 12-13 not availableSource: WAN IFRA WPT 2013 country-level reports; BCG analysis

Print circulation CAGR (%) Print advertising CAGR (%)


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Growth is good – S&P 1200, 1991-2008

9 10 9 9 8

5 5 4

103

2

01

3 1

112

3

0

10

20

30

40

Annual TSR change (%)

Growth

Margin

Multiple

Free Cash Flow

10 years

12

7 years

15

3

5 years

17

3 years

19

1 year

26

Source: Compustat, BCG ValueScience Center, 2008


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Growth comes mostly from places away from the core…while maintaining your profit margins

8

24

68

0

20

40

60

80

%

Maintain

margin

Dilute

margin

Improve

margin

3636

18

0

10

20

30

40

%

New

frontiers

AdjacenciesCore

reinvention

While investing for the future... ...Maintain or improve margins

1. 300 breakout growers screened from a group of 1600 companies based on their peer-beating sustained value creation record from 2000-2008


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Publishing companies have taken different approaches to growth and diversification

AdjacenciesCore New frontiers

Source: Press Reports, Company reports


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Branded Content: next big opportunity?

Size and

Attractiveness

Low High

Low

High

Right to Play/Ability

to Execute

Branded

Content

Source: BCG


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Digiday asks…

Source: Digiday, WTF is Native Advertising Report, 2015


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Branded Content Video

Source: BCG; Company websites and publications


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Branded content means a lot of different things to a lot of different people

Source: Wordle


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Bring some order to the chaos of "branded content"

Learn how consumers actually feel about and are interacting

with "branded content"

Discuss some opportunities for you – media companies—

to win in this space

What we're going to do today

1

2

3

Source: Company website and annual reports; press search; Capital IQ


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We believe branded content can be defined against two key elements

Content: desired consumer response Environment: relationship to setting

Source: BCG analysis

Has clearly articulated

consumer benefit

Exists in service of a

brand's objectives

It's primary purpose

is not to sell

Promotion is natural

and seamless

Promotion's creative is

contextually relevant

Promotion's tone, style, and

format is creatively aligned

with its setting


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Our synthesized definition for branded content


"Content … with a consumer benefit …

in an authentic environment … in the service of a brand"


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Two key branded content choices—where and how

Product-related content

Wh

ere

co

nte

nt

exp

eri

en

ce o

ccu

rs

Category-related content General interest content tied

to brand equitiesContent distance from product

Existing

media

platform

Distinct

platform

developed

by brand

Existing

brand

platform



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Branded content campaigns mapped to the matrix

Source: BCG analysis; company websites

Product-related content Category-related content General interest content tied

to brand equities

Existing

media

platform

Distinct

platform

developed

by brand

Existing

brand

platform

Titleist's

online golf

ball

selection

quiz

Nike "The

Last Game"

on Nike.com

& YouTube

Nike brand

page

iPad /

Modern

Family

Upworthy

Promoted

Post for

Whole

Foods

Net-a-

Porter's

"The Edit"

magazine

GM's

interactive

recipe site

Tablespoon

.com

Red Bull

Media

House

Environ-

mentalism

on

Patagonia's

website

NY Times

for Orange

is the

New Black

iPad /

Modern

Family

Titleist's

online golf

ball

selection

quiz

GM's

interactive

recipe site

Tablespoon

.com

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://xfinity.comcast.net/blogs/tv/2010/04/01/modern-family-gives-ipad-pre-debut-starring-role/&ei=sB-TVNnjG4awPJ6YgJgL&bvm=bv.82001339,d.bGQ&psig=AFQjCNEhVmeW-EDcKJ0FnRIDNUDIgiJP2A&ust=1419014326418053





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"Native advertising" fits as a subset of branded content

Source: BCG analysis; company websitesSource: BCG analysis; company websites

Product-related content Category-related content General interest content tied

to brand equities

Existing

media

platform

Distinct

platform

developed

by brand

Existing

brand

platform

Titleist's

online golf

ball

selection

quiz

Nike "The

Last Game"

on Nike.com

& YouTube

Nike brand

page

iPad /

Modern

Family

Upworthy

Promoted

Post for

Whole

Foods

Net-a-

Porter's

"The Edit"

magazine

GM's

interactive

recipe site

Tablespoon

.com

Red Bull

Media

House

Environ-

mentalism

on

Patagonia's

website

NY Times

for Orange

is the

New Black

When distributed digitally,

often referred to as "native ads"




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Example: New York Times for Orange is the New Black

Source: Company websites; press reports

"The New York Times just

published what is probably the

best piece of sponsored

content you will find"

- Sam Petulla, MSNBC, on

his Twitter Feed

"The piece that turned

[branded content]

mainstream"

-Ad Age


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Example: Net-a-Porter's "The Edit" magazine

Source: Net a Porter Media Kit


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Example: Red Bull's best-in class multi-format global content ecosystem

Source: Company websites; press reports

TV

Red

Bull Air

Race

the

Game

Website

App

MusicMagazines

Games

Film


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Red Bull is no longer alone … other brands are building integrated media ecosystems

Source: Fast Company, the Story of Oreo; Fast Company: Oreo Tags Pop Culture; Mountain Dew Green Label


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d.

Branded Content market expected to grow to $25B by 2019…

25

10

0

10

20

30

$B, US

2019E2014E

14-19

CAGR

Total spend (native and outsourced content costs); includes about $750M of

programmatic native in 2014

21%

Note: content spending only above the line; does not includebelow the line expenses such as salary and distributionSource: Business Insider, PQM Media; Press Releases, BCG analysis


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...with more growth and attention to come

3% 6%

Less

43%

26%

Significantly

more

More

21%

Same

amount

Unsure

70% of marketers are expecting to do

more branded content next year..."[Branded] Content marketing is the only

marketing left"

- Seth Godin, best selling author

and marketing expert

“Extending our messaging through content is a

great way for us to continue to convert our

customers from simply seeing a message to

considering our brand"

-Walter Frye, Director of Entertainment

Marketing & Sponsorships at American Express

Source: 2015 B2C Content Marketing Trends Content Marketing Institute/ Survey, 5,000 Marketer Respondents; The Content Council / Ad Age White Paper, 445 Marketer Respondents


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d.







1

2

3


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d.

Creative

examples

we used

(U.S.

only)

Who we

spoke to

~1578 respondents ~1000 respondents ~1000 respondents ~1000 respondents

Net a Porter

Online

magazine

Red Bull drop

from space

NYT for

Vacheron

Watches

Our survey methodology

Source: Nationally representative online survey, March/April 2015, weight balanced for age, ethnicity, income

iPad / Modern

Family


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Five key survey findings

Vast majority of consumers have encountered, enjoy and seek branded content

Branded content positively impacts favorability and purchase ROI…

… but magnifies negative sentiment among those who dislike the brand

Consumers are giving media properties permission to play in branded content

Tone and style are critical elements to successful branded content..as like edit

A

B

C

D

E


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Have encountered

branded content

Have liked branded content

that they've encountered

Have proactively sought out

branded content

Awareness Favorability Demand

A


BCG analysis. Awareness: Represents the portion of respondents who have encountered either product-level, category-level, or general interest branded content, or some combination thereof, at least once in the past year. Favorability: Represents the portion of respondents who have liked product-level, category-level, or general interest branded content, or a combination thereof, at least once in the past year. Demand: Represents the portion of respondents who have proactively sought out either product-level, category-level, or general interest branded content, or some combination thereof, at least once in the past year

88% 86% 65%


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d.

… and indicate a greater likelihood of purchase

3

60

21

9100

75

0

50

25

% o

f re

spon

dents

100

7

+20%

Net increase in

purchase likelihood

Net increase in affinity for a brand

Branded content positively impacts favorability and purchase ROI...

Consumers like brands more as a result of branded content...

B

Source: BCG analysis; consumer survey, 1578 U.S. Respondents, March 2015

+21%

Much less than

Less than

Same amount as

More than

Much more than


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CLiked Indifferent Unfamiliar

However, it magnifies negative sentiment among consumers who dislike the brand

Source: BCG analysis; consumer survey, 1578 U.S. Respondents, 1000 UK, 1000 Germany, 1000 Italian Respondents, March/ April 2015

20%36%

8%22%

5%24%

25%42%

Disliked

-12%

-12%

-11%

1%

9%

-3%

-8%

3%


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Consumers are giving media companies permission to play in branded content...

-8

2

11121216

19

-15

0

15

30

Local print

newspaper

MagazineStandalone

website

National print

newspaper

News

website

%

Gaming

platform

Social media

After consuming branded content "I would trust this media setting more/less..."D

Source: BCG analysis, 1578 U.S. respondents, March 2015. Represents the average results of (1) general interest branded content (2) category-level branded content and (3) product-level branded content


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...with slightly lower receptivity in the U.K and Germany, and slightly higher in Italy

16

25

20

8

1

9

6

10

2

0

10

20

30%

Local print

newspaper

National

print

newspaper

News

website

Local print

newspaper

National

print

newspaper

News

website

Local print

newspaper

National

print

newspaper

News

website

D

Represents the average results of (1) general interest branded content (2) category-level branded content and (3) product-level branded content

Source: BCG analysis; consumer survey, 1578 U.S. Respondents, 1000 UK, 1000 Germany, 1000 Italian Respondents, March/ April 2015

After consuming branded content "I would trust this media setting more/less..."


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Tone and style are critical elements of branded content...just like edit

2

5

11

18

20

23

32

39

42

42

52

52

59

Long

Fiction

Features celebrities

Emotional

Non-Fiction / real-life

Interactive

Features real people

Educational

Short

Funny

Attractive design / layout

Credible

Thought-provoking

E "Attributes that would make you most likely to read/view content featuring [brand]"

Source: BCG analysis; consumer survey, 1578 U.S. Respondents, March 2015


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Five key survey findings


Branded content positively impacts favorability and purchase ROI…

… but magnifies negative sentiment among those who dislike the brand

Consumers are giving media properties permission to play in branded content

Tone and style are critical elements to successful branded content..as like edit

A

B

C

D

E


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d.


Source: Company website and annual reports; press search; Capital IQ






1

2

3


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d.

Overview of opportunities for media companies

Native ad inventoryContent production for

MediaCo platforms

Core offering

New adjacent offerings

Full service branded

content offering

Native sales on

MediaCo-run private

exchanges

Content

management

services

A B

C D E


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A conclusion for consideration...

branded content - inma€¦ · source: digiday, wtf is native advertising report, 2015. v5...

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