Good old fashioned interruptive display advertising is the golden goose that keeps laying for the local TV networks. But integration is so hot right now. And, whether it's sponsorships, programme partnerships, production partnerships or one-off branded content projects, it's a big part of TVNZ's focus for the future. Following its new season launch this week, head of sales Jeremy O'Brien and general manager of media solutions and insights Lyndsey Francis talk turkey about its plans.
In the ten years head of sales and marketing Jeremy O'Brien has been at TVNZ, its mandate has completely changed, with a new government shifting the focus from public broadcasting to money making. Some see that as a negative; as a race to the bottom. But he sees it as a positive and he says this evolution isn't just unique to TVNZ.
"I think we’ve gone through a period where we’ve really refocused the business. The people of New Zealand invest in us and they expect a return on that investment ... What’s our business based on? Having as much content as possible and giving it to New Zealanders where and when they want to view it and then turning that into a business, be that an advertising-funded business, which the majority still is, or over time finding new business models ... Things started off with media people running media businesses. Now we've business people are running media companies."
He points to the recent appointment of Mark Weldon at MediaWorks as a prime example of that. And that's leading to new business models, one of which is the media solutions and insights department, which started four years ago and was recently restructured around two units—thinkers and doers—to better suit the market.
"It was about being more customer centric so agencies know exactly who to talk to and also to be more specialist," says Lyndsey Francis, who took over as general manager late last year.
Francis says its content strategy unit focuses solely on "the thinking, the creativity, the innovation, and the new opportunities they can proactively or in response to briefs take to their agencies". They’re aligned to agency and client business. And the commercial integration team is responsible for the commercialisation of production funding, integration and project management.
"It’s great to create these amazing ideas, but you've got to be able to deliver them. It’s really hard work," she says. "Those two skillsets are so different so you ended up with these creative people trying to straddle that and do all this detail, which also took them out of the market for a long time. So it's about not disregarding the value of the doer. If the client has a rubbish experience in the doing, they don’t come back."
O'Brien says there are now 18 people in the media solutions and insights team, not including the resources available through its creative arm, Blacksand. And he thinks that department will be close to reaching seven percent of total revenue by the end of the year, so it's not insignificant—and it's growing quickly.
When it comes to programme partnerships, the dream result is finding something that works for the viewers, works for the brands and works for the broadcaster. MasterChef is a prime example of that, and, up the road, The Block NZ. But they're rare beasts. Even so, TVNZ is confident it's got a couple more in its dressing room for next year, with Our First Home and Kiwi Living two new formats that it's been working on for just over a year.
"There’s still value in leveraging borrowed equity from brands from a sponsorship perspective," O'Brien says. "There's a huge amount of opportunity and the market is really hot on integration."
He says it started talking to the market about Kiwi Living early this year. And while not much is known about the format just yet, Francis says it's about "trying to take a brand and show it in an authentic way".
"In something like this it will be an in-studio with cutaways. How they then go about telling the story of travel or gardening isn’t necessarily showing the brand, it’s about giving the viewer something valuable. It's an angle on telling your [brand's] story, but in a way that fits into the show."
O'Brien says one of the major strengths of TVNZ is its consistency, something illustrated by the fact that, over the past five years, it has screened 85 percent of the top 100 shows. And that gives brands confidence to get behind these new formats.
"Yes, we’ve taken strong international formats and launched them successfully but we’ve also got our history of developing local formats and our own IP, like, back in the day, Mitre 10 Dream Home and Mucking In. Kiwi Living and anything else we come up with is going to be really strong. I’ve got every faith in our commissioning and production team ... We’ve got people who are able to match those on the world stage and develop new formats and that’s a real strength of our business."
MediaWorks chief executive Paul Maher, when discussing its new season launch a few weeks back, called MKR NZ a failure. But O'Brien disagrees.
"We're still really happy with MKR NZ. I don’t think too many broadcasters would turn their noses up at a 400,000 average audience. We regard that as a success. And it's in that echelon of top 100 programmes."
Francis says it's not about local vs international. It’s what’s most relevant and most compelling for the viewer. And she thinks something like Our First Home, which involves children living with parents while trying to renovate a home to get a deposit and involves BNZ, Fly Buys and Toyota, absolutely hits the mark given the current interest in the housing market.
So as TVNZ creates more shows with brands through programme partnerships, do ratings not matter quite as much? Is success now quantified in different ways? In the case of Purina Pound Pups to Dog Stars, TVNZ's big branded content play this season, O'Brien says it’s a mixture.
"Ratings are important, they're the foundation, because you want the mass awareness, and that's ultimately what it got. But the true value is taking that equity and leveraging it into their own marketing programmes ... They were trying to activate their core value, which is about truly caring for the welfare of pets and pet owners. And if you look at what they’ve been able to establish through their Facebook page and three animals that became ambassadors within the Purina family, then that value is more than just the ratings."
Francis says it's "a classic case of actions speaking louder than words because the show and its re-homing page on the website helped to re-home a few dogs. And, as for a second season, "we're talking to them at the moment".
Similarly, while TVNZ would have no doubt liked MKR NZ to have beaten The Block NZ in the ratings, O'Brien says when you have the chairman of Genesis saying at a board meeting that one of the key factors that influenced customer acquisition was its slightly controversial involvement in the show, "that’s probably the biggest endorsement you can get for a partnership like that".
Outside Kiwi Living and Our First Home, he says TVNZ has three or four active ideas out in the market. But the approach it's taking now tends to be more tailored, rather than 'build it and they will come'.
"More and more what we’re finding is that there will be a client or a group of clients that have like needs or a brief and we’ll start working with them to co-develop a format. It takes a bit longer, but our experience would show that you get a much better result. It's about quality over quantity and our focus for 2015 will pay off in that regard."
O'Brien says there's no one size fits all with branded content. And different clients have different needs. Francis says it comes down to how much control brands want over the message. Input into editorial is more restricted and, as evidenced by Jono and Ben at 10's approach, it's often an exercise in trust, whereas owning your own format gives clients greater long term surety of that as their IP. And production partnerships like Mitre 10's Easy As, Spark's Tech in a Sec, Auckland Airport's Trip Guide, and, more recently, work with Westfield around the shopping experience, are good examples of that.
"With those I come back to the fact that it’s about having a proven sustained success," says O'Brien. "So why do we have year four of Easy As, or year three of tech in a sec, or The Mix. It’s because those formats have provided business results for those clients year after year. So they’re absolutely working. And what they get that's different to having a production funding partnership is they create their own equity in the character we build around it. You’ve got Stan who started on a casting couch at TVNZ and he’s now employed by Mitre 10."
And, in another endorsement of the approach, Francis points out that Tech in a Sec is the only piece of communications that’s crossed over from the Telecom rebrand into Spark.
"And I think we made 60 pieces of content for them in the relaunch. Those 60 pieces of content will be distributed far and wide. So it's about refreshing it and bringing in new hosts."
As far as the viewership goes, O'Brien says the only reason it has a business is because it reaches so many New Zealanders. But, as Duncan Greive pointed out, there still seems to be a belief that its consistently high ratings are based on legacy; on the ageing Kiwi population never venturing past channels one or two. But as Francis says: "I don’t think we’re in a world where we can rely on legacy."
O'Brien: "If you look at how we look to reinvigorate our programming, Seven Sharp is a prime example. We looked at the format and said this is a dying genre. If we want to regenerate and keep audience over time we need to look at something new. That took some time, but it’s absolutely been a revelation for 2014. And if you look at one of the juggernauts of local programming, Shortland St, that grows and gets better and better each year. Why? Our commissioning team and the great people at South Pacific Pictures continue to reinvent the storylines to make them relevant to New Zealanders. I don’t think it’s about legacy, it's about continuing to react and change to what our viewers need ... Stability of content and output deals are still a really important part of filling two full-service networks, so that’s a competitive advantage for us. Add to that we’re putting $100 million into local content [with the help of NZ on Air]. So you have to get that complete mix right. It's more than one or two hit shows."
Last year, O'Brien said 'beware the wounded bull' when asked what he expected from MediaWorks, which was going through the ructions of receivership. And this year?
"They’ve reworked their business again. Last year it was all about local formats and making them really successful and this year there’s a different story. What we focus on is consistently delivering good results. It’s your track record that counts. And you can’t argue with our track record over the past five years. You need to have a breadth to have ongoing leadership in the market. And I think that’s what we’ve got."
At its new season launch, MediaWorks focused on the extensive reach and activation opportunities its network of media options offered. And NZME and, to a lesser extent, Fairfax, are also focusing on the role different media channels can play for advertisers. So is the fact that TVNZ only does video a weakness?
"Really good strategists and planners have talked about cross media activation for some time. And we certainly believe in that. But we think the client should have a choice as to who they go with," says O'Brien. "I would argue being restricted to one group might not meet the brief in the way the client needs. So we will do our job really well and we’ll partner with anyone who makes sense to deliver the end result for the client."
Francis points out that it is working with Bauer for Our First Home and it regularly works with NZME. And that's one of the benefits of having a strategic hub in the business, because they’re able to think beyond TV and suggest suitable partners. And Francis says that central point of contact makes it easier for the client.
"Ultimately I think they want flexibility to choose the right option. But they do want one person to talk to overall."
Media is a very competitive and often quite combative sector. But O'Brien says there are no problems getting competitors to work together.
"We live in a village, we all know each other, and we’re all adults. If you build strong trusted relationships then you can make things work. And you do it because it leads to better results for the client. So they're going to come back. It’s a virtuous circle. Unfortunately there are no Lachlan Murdoch/James Packer incidents. It’s never that exciting."
O'Brien says the ad market is steady in New Zealand. But there is really strong growth in video, both on TV and online. He says TVNZ is growing, and "that's in the context of a market that’s still relatively subdued". And while Ondemand is still a small part of its revenue, the world seems to be moving in that direction. So, given there is no real channel branding in TVNZ'sOndemand offering, could there come a time when One and Two don't exist?
- Check out the story on TVNZ's plans to grow Ondemand here.
"I think the power of the brand is important," says O'Brien. "How many brands you need is up for debate. I think there will be a role for a trusted aggregator, but whether that’s an individual channel brand, or a more monolithic aggregator is yet to be seen. If you look at distribution, HBBTV [as Freeview's Sam Irvine discussed recently] is going to play a big role where the packaging of content can be by channel or by genre, and so ultimately the brands that are going to do really well are the ones that become known for a distinctive attribute, be that drama, comedy or sci fi."
He says channels One and Two came from the fact that there is a destination on a remote that you wanted to get people to push. And that’s a legacy of a TV market that began 50 years ago.
"Whether or not a destination brand is important depends how much equity you believe you have in that. If you look at our reach to New Zealanders with those channels, there's still a lot of value. So it’s how you transfer that to a multi-platform world."