Monday, October 02, 2006

:: adgruntie :: Can agencies figure out a viral formula?

+ Viral ads - It's an Epidemic:
Madison Avenue has always tried to create infectious ads. Think of those beer commercials with catch phrases that some of your more tiresome coworkers repeat around the water cooler. But viral marketing truly came of age with the Internet.

Marketers discovered that if they came up with a really good beer ad, consumers would e-mail it to their friends. That was a revolution at the time. Now it seems so Web 1.0. In the age of user-generated content sites like YouTube, MySpace Video, and Google (Charts) Video, consumers and advertisers are able to upload ads that can be shared virally by millions of people.

This means some interesting twists for the business of advertising. A successful viral ad is distributed widely for free - Smirnoff didn't pay YouTube a dime. On the other hand, the advertiser has no control over where the message winds up. (There's always the chance that it might appear next to a Hitler video or a booty clip.)

And here's an intriguing question: Can YouTube and Google Video figure out a way to make this a business? If so, could they become the web's equivalent of the broadcast networks?

These are the sorts of riddles that keep media moguls awake at night. YouTube and its brethren turn the industry's hierarchy upside-down. Advertisers usually sit at the top because they provide most of the funding for television broadcasters, magazines, and newspapers. As long as advertisers are willing to write checks, these traditional media outlets are happy to let them dictate when and where their ads run. Consumers, at the bottom of the hierarchy, don't have much say as far as advertising and programming are concerned.

In user-generated content sites, the concerns of the advertisers are secondary to those of the consumer. Sites like YouTube can't survive without their videos. The last thing founders Chad Hurley and Steve Chen say they want to do is have advertisers plaster the site with pitches that alienate users. Hurley and Chen are reserving the top right corner of YouTube's home page for paid videos and creating "brand channels" for clients like Warner Music.

They hint that they are working on a mind-blowing new advertising model that may eclipse these efforts. But they aren't any more specific, and many ad agency people wonder if the founders really have any idea how to turn advertisers like Smirnoff, who are freely spreading viral messages on YouTube, into paying customers.

Then again, Madison Avenue is also having trouble coming up with a viral advertising model. Like the YouTube founders, ad agency people speak worshipfully about the users of these sites. They fear angering them by marketing to them too overtly.

Rich Silverstein, a founder of Goodby Silverstein & Partners, the San Francisco-based agency famed for the "Got milk?" campaign, says his agency has yet to actually pay to post a video on YouTube. It's far better, he says, to turn these people into your distributors by making ads so great that consumers pass them around and upload them to such sites.

"If it's worthy, if it's pass-around worthy, it's going to do good for your brand," Silverstein says. "If they are not passing it around, it's crap. It's useless."

The trouble with this from an advertiser's standpoint is that it's like pop music: How many people have ever been able to figure out the formula for a Top 40 hit? Silverstein, for instance, points to two short web films that his firm made for Specialized Bikes. One of them, a faux news report about a biker who outraces a police car, was viewed 82,000 times on YouTube. The other, a clever cartoon about a hapless mountain biker who ignores a danger sign and is clawed by a bear, gnawed by piranhas, struck by lighting, and chopped by a woodsman's axe, has been viewed 5,000 times.

It may be good advertising, and it may be distributed for free, but it isn't much to crow about when YouTube attracts 34 million unique visitors a month, according to Nielsen.

Kevin Roddy, executive creative director of Bartle Bogle Hegarty, says, "I believe if you want to be successful in the world of viral, you need to play by the rules of entertainment, not the rules of selling. A lot of brands might have difficulty with that. But as soon as you [sell], people say, 'Well, I'm not going to do your work for you.'"

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