When Brand Companies Become Media Companies: Serious Implications

By: Steve Outing Have you noticed? More and more brand and other companies are becoming (part time) media companies.

This is a trend that I've been watching for some time, but indications are that it's about to speed up. Which, of course, is yet another "unpleasant" development (from the media company perspective) inspired by the Internet that makes it harder to sell advertising.

As if newspapers and other traditional publishers already aren't struggling enough as others take bites out of their once-secure advertiser base, more brand companies are figuring out that they don't need traditional media as much, because they can reach audiences directly themselves -- and that's a good thing for them.

Is there a silver lining for media companies with this trend? Perhaps, and I'll address that later in this column.

A Little History

Many of us first noticed this years ago with pro sports teams; their websites morphed from purely marketing oriented (brochureware) to legitimate media properties.

Fans of the Denver Broncos, for instance, for some time have been able to get team news from DenverBroncos.com. That site includes such insider news and information as blogs from Broncos executives, coaches, ex-players and cheerleaders; team stats (of course); team news; and even special multimedia content for season ticket holders.

The Broncos (and other a growing number of other teams) also have their own social networking site -- a sort of MySpace for Broncos fans. At BroncosCountry.com, fans can get user profiles, chat with fellow fans, post photos and videos, etc. Throughout the pro sports world, private team social networks are sprouting like weeds.

The social network of the Indianapolis Colts, MyColts.net, is sponsored by AT&T and Canon. Ergo, such web properties by sports teams are not purely marketing vehicles to sell tickets. The teams have become part-time publishers, to add to their other corporate descriptions.

The point, of course, is that football fans increasingly find what they want -- including a community of fellow fan(atic)s and online football utilities -- at the team sites. Not that long ago, this would have been the purview of local media, especially newspapers. (Of course, there is a big difference. A team site is not going to treat a player's drug arrest in the same light as the local newspaper's sports section, or present any bad news in an objective light. But perhaps fans don't find that to be particularly off-putting; they can always visit traditional media websites as well.)

A Significant Marketing Shift

We're starting to see now more of this behavior from brand advertisers, as they take on media functions as an element in their marketing strategies.

Nike is the prime example, as pointed out in a recent New York Times article, "The New Advertising Outlet: Your Life
."

Nike's running-related websites host running tracker tools and online community features -- things that are useful to running enthusiasts and athletes.

The Inside Nike Running website describes what it's becoming this way: "We wanted it to be leaner, faster and full of juicy content for runners, by runners. A place to get up-to-date running news, training tips, events, product info and more. The best of Nike Running with a whole new attitude, updated regularly. Some call it a blog. We call it the new hangout for runners. We're stoked about it. We hope you are too."

In other words, Nike's marketing department has figured out that it can also be working more as a media enterprise, not only producing content, but creating running (and other sports) communities, and producing useful online tools for athletes.

The Times article quoted Stefan Olander, Nike's global director for brand connections: "We want to find a way to enhance the experience and services, rather than looking for a way to interrupt people from getting to where they want to go. How can we provide a service that the consumer goes, 'Wow, you really made this easier for me'?"

I think that's a huge statement, one that more marketers will come to embrace in the years ahead. Especially with the web and digital media, users typically are seeking out something when they use the Internet. Advertising is an interruption, and if the interruption is too annoying then people will take action to remove it -- such as using pop-up ad blockers, which are now common.

This shouldn't be an epiphany for you. Technology developments like TiVo digital video recorders have long given consumers the ability to skip commercials. In an on-demand age -- and the web is the ultimate in on-demand media -- advertising that interrupts is becoming less and less relevant. The "advertising" that works best online will be that that people come to willingly; it often won't be advertising, but rather alternative marketing strategies.

Alas, most advertising on newspaper websites remains in the sub-optimal category -- that which interrupts the user experience.

Online Advertising Sucks?

And here's even worse news about the typical type of Internet advertising that shows up on most newspaper websites. A global study by Nielsen Research released this month, based on research of more than 26,000 online users, showed that Internet advertising is near the bottom of the list in terms of how much it's trusted by consumers. Print newspaper ads did quite well, coming in second place with 63% of people saying they trust them. TV commercials and magazine ads placed a few percentage points behend. Search ads were trusted by 34% of consumers, and banner ads (still the stalwart at most newspaper sites) were trusted by just 26% of respondents.

What was No. 1? Word of mouth. (WOM means not only friends telling friends about products and services that they recommend, but being empowered by the Internet to share their recommendations with a broad and loose group of "friends" who may belong to online communities of people with shared interests. WOM also includes all the consumer reviews -- e.g., book and product reviews by consumers on Amazon.com -- that people now rely on so heavily to make purchasing decisions.)

What I get out of that Nielsen survey (and it confirms other research I've seen that now puts word of mouth as the most effective form of marketing) is that over time, more and more marketers will move some money out of traditional advertising and move it into alternative approaches that will facilitate word of mouth marketing.

Nike's approach of providing not only online tools but also building useful communities from among its customers is an example of that. It will become (it's already becoming) increasingly important for product companies to capitalize on this new media landscape -- and it won't be by buying more web banner ads.

A Place For Newspapers?

This column is directed at the newspaper industry, but my advice can carry over to other traditional media. I think there can be a place for newspapers, and an opportunity from this mega-trend.

You already run a media company; you know and understand media and technology; you get how to engage audiences with quality content and create communities. Brand companies are beginning to understand that it's in their interests to also become (part time) media companies, offering consumers quality content, useful online tools, and worthwhile online communities.

The opportunity, then, is obvious: Newspaper companies can help companies (their advertisers) create media properties or features. They can help other companies become, in part, media companies, by providing their customers with media-like applications and services.

This may require some creativity on your part, because many companies have not yet caught on to this new form of marketing. Imagine that you are in the shoes of a company executive. What online services could you offer that customers would appreciate and come to you for? Figure that out and build it for the company.

One example of this can be seen in NBC's Weather Plus online service, which provides weather forecasts on Southwest Airlines' website. NBC produces the regionalized forecast video clips, which feature a meteorologist standing in front of a Southwest branded US weather map. The clips are exclusively produced for Southwest (the meteorologist mentions Southwest frequently) and run only on Southwest's website.

That's a great example of a non-media company (an airline) getting into the media business (part time) with the help of a media partner which is producing the content. Southwest can train its customers to come to its website to get travel weather news, rather than visit traditional media sites that offer weather information. In this case, NBC isn't losing out, because its brand ("NBC Weather Plus") is on the Southwest weather video clips as producer.

With this model in mind, you should be able to have some interesting conversations with your newspaper's largest advertisers. What can they do in the media space -- what can you develop on their behalf, because you're an expert at media applications -- that will get their customers to come to them on a regular basis? Figure that out and you'll have some happy advertisers.

What we're talking about here is flipping the advertising paradigm on its head. Your advertisers are becoming competitors as well. They are learning to attract users to their own content and services (not just offering marketing propaganda), and are even in some cases attracting advertisers and sponsors of their own (as in the example of MyColts.net above).

That may not be what you want, as a newspaper publisher, but that's what's coming at you. It's already happening on a small scale. There's much more to come.

Learn to take advantage of this opportunity. Because it IS an opportunity.