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What: Assembly, MDC’s full-service media agency, has won the Travelocity account, awarded without a review.
Why it matters: Travelocity was acquired last January by Expedia. Expedia handles most of its media buying through Assembly. Expedia Inc. properties, which besides Travelocity include Orbitz, Hotwire.com and Trivago account for about 75% of the U.S. travel market.

descargaAssembly, MDC’s full-service media agency, has won the Travelocity account, awarded without a review. Now, the agency will handle all media planning and buying for Travelocity, and will work closely with Campbell Ewald, recently appointed as the company’s creative agency. Previously, media was handled by Publicis Groupe’s Zenith Media.

Assembly currently handles media buying for Hotels.com and media planning and buying for the Expedia.com brand.“We have been impressed with Assembly and their ability to quickly understand our business challenges and our need to use media to drive transactions,” said Bruce Horner, Director of Media & Alliances at Travelocity. “We have made the decision to work with Assembly to ensure that our brand and the Travelocity Roaming Gnome remain visible, relevant and differentiated in an increasingly competitive landscape.”

Expedia companies spend $265 million annually on U.S. ads in 2014, with the Expedia brand accounting for $180 million. Travelocity, owned by Expedia since the beginning of the year,  spent nearly US$30 million on ads last year.  [/comillas ]

Another Brand in the Expedia portfolio

“We are thrilled to be working with yet another brand in the Expedia Inc. portfolio,” said Assembly CEO Martin Cass. “The agency has a proven track record of excellence as the company’s strategic business partner that spans a decade. I applaud the great work our team has done over the years in this extremely dynamic and competitive category.”

Expedia Inc. properties—which also include Orbitz, Hotwire.com and Trivago, among others—account for about 75 percent of the U.S. online travel market. The company spends $265 million annually on U.S. ads, with the Expedia brand accounting for $180 million of that outlay, per Kantar. Travelocity spent nearly US$30 million on ads last year, according to Kantar Media.

In the second  article on Multichannel Networks (MCNs), Portada Digital Media Correspondent Susan Kuchinskas looks at  how MCNs gather the best of independent video programming, often being distributed via YouTube channels, and then play matchmaker between brands and individual content creators.

Steve Minichini, Assembly
Steve Minichini, Assembly

Agencies have long relied on YouTube for its huge reach. It serves a very specific purpose within the online video advertising realm, according to Steve Minichini, managing partner at  MDC Partners-owned Assembly. “At Assembly, our digital video philosophy centers around a specific approach which blends top-tier video sponsorships coupled with a mix of second- and third-tier video providers to ensure we have the right balance of targeting, reach and efficiency,” Minchini says. Right now, he adds, his agency sees YouTube as a reach play for that second- and third-tier video content.

But the MCNs aim to change that. Multichannel networks are similar to the blog ad networks of yore. They try to gather the best of independent video programming, often being distributed via YouTube channels, and then play matchmaker between brands and individual content creators, while providing varying levels of business development advice to the YouTube celebrities. Brands appreciate MCNs because they enable them to work with one business-minded point of contact.

A “frenemy” called YouTube

MCNs are looking to expand beyond the YouTube platform for a couple of reasons. First, they hope to increase profits. Google takes a reported 45 percent cut of YouTube ad revenue, although individual creators or networks may negotiate better deals. Second, there’s not enough flexibility in YouTube’s ad formats.

Today’s online video stars have huge audiences that definitely would watch a few prerolls to get the content.

Today’s online video stars have huge audiences that definitely would watch a few prerolls to get the content, says Iddo Shai, director of product marketing for Kaltura, a new end-to-end, over-the-top video platform that provides monetization, social interaction and personalization. “So the online inventory is actually very significant. On YouTube at this time, prerolls are very hard to do.” He notes that YouTube has been making some changes in order to become more flexible in what they allow the upper tiers of talent to do. “But they will never give full access — and rightfully so. They are a strong platform and want to control much of the revenue and the content,” Shai says.

xyrtec casa linda MiTuNow, MCNs are pitching custom, branded content deals, product placements, spokespeople – you name it – for the producers in their stables. New Buzz TV CEO Nicholas Buzzell points out that online distribution platforms enable things like clicking through a video ad to buy a product or download a coupon.

MiTú, an MCN targeting the Hispanic and Latin American realm,  has created a sizzle reel pitching branded entertainment, original content, programming by MiTú’s top influencers, and “influencer clip seeding.” As an example of branded content, a demonstration of flower arranging on the YouTube channel Casa Linda is sponsored by allergy medicine brand Zyrtec and includes a shot of the product on-set.

You can’t buy a YouTube channel, but you can buy the networks that manage them.

Acquisition targets

There’s also huge demand for MCNs on the part of established entertainment companies. You can’t buy a YouTube channel, but you can buy the networks that manage them. The same week that New Buzz launched, AT&T and The Chernin Group announced that their subsidiary, Otter Media, would buy Fullscreen, the not-quite-four-year-old MCN that manages more than 50,000 content creators with a collective range of 450 million subscribers and 4 billion monthly views. The Chernin Group also has invested in MiTú. Last year, Dreamworks bought AwesomenessTV, and earlier this year, Disney acquired Maker Studios, while Warner Bros. made a strategic investment in Machinima.

These companies are buying access to eyeballs and talent, according to Shai – at least for now. Down the road, he thinks Disney et alia could take an MCN star’s shtick and spin it off into a TV series or feature film. He says, “Once you’re in business with a guy who has 30 million followers, you can really do something with it.”

Amy Pham of Maker
Amy Pham of Maker

It remains to be seen, he adds, how the very independent YouTube sensations will take to working with a control-freaking behemoth like Disney. “This different breed of talent who are used to doing whatever they want to do, and turning down a deal if they don’t feel it’s right for them … how will they fit into a huge entity like Disney?”

Multichannel networks are similar to the blog ad networks of yore. They try to gather the best of independent video programming, often being distributed via YouTube channels, and then play matchmaker between brands and individual content creators.

That’s where the MCNs can prove that those multi-million-dollar acquisitions were worthwhile. Meanwhile, Shai thinks the MCNs will try to build their own brands away from YouTube. While video personalities have a fair number of what he calls “soft fans” who probably only would watch on YouTube, there’s definitely a significant chunk of those 30 or whatever millions of fans who will pay to get more access to their favorite talent. He thinks Maker will slowly but surely start to promote its own brand, build some apps and eventually have its own channel on Roku or other connected TV platforms. Shai says, “They will definitely have a strong enough distribution platform that they fully control, keep all the ad revenue and can do sponsorships. They can do more than what YouTube gives them.”

In a world where cable and the web are fragmented, we would become a tile in this digital universe.

This is the vision that Buzzell of NBTV Studios shares. He says, “The MCN model we’re seeing today is the first iteration of what this space will become.” Ultimately, he sees New Buzz being an equal player with NBC or Fox and accessible from any device. He says, “In a world where cable and the web are fragmented, we would become a tile in this digital universe.”

This is the second of two articles exploring how Multichannel Networks (MCNs) work and their role in the emerging online video ecosystem. The first article is “Are Multichannel Networks the future of TV?”

The Multichannel Network (MCN) World is smoking hot. YouTube content has grown up – so much so that it’s growing off the platform, thanks to multichannel networks, or MCNs, that are investing in original content and investigating new distribution channels. Is this the future of TV? What major players told  Portada Digital Media Correspondent Susan Kuchinskas.

nbtv

On September 26, NBTV Studios launched New Buzz TV, an over-the-top multichannel network that will curate content across six channels, including multicultural. Its aim is to provide a single distribution platform for premium content producers, offering them content development, talent management and video production services. At the same time, it will partner with brands to create original premium video content.

In a world where cable and the web are fragmented, we would become a tile in this digital universe.

“It’s about identifying things that have high production value and good storytelling that might have an existing audience on another platform,” says CEO Nicholas Buzzell. “The mission is to make it easier for people to discover premium content and help them find things.”

Original programming is also part of the plan. Buzzell, who helped launch AOL Latino, has been producing Hispanic video for several years, and some of this will be distributed on New Buzz TV. For example, NBTV Studios produced and owns a feature film starring Puerto Rican comedian Luis Raúl that had a theatrical release in Puerto Rico and was available as video-on-demand in the United States and Latin America. It’s also planning a show called “Gazpacho,” a program that will recap the previous day’s news and entertainment, with commentary from hosts.

Buzzell says all content deals will be non-exclusive, and he’s offering producers a share of ad revenue, as well as of future subscription revenue.

Producers rock

Video producers represented by MCNs benefit by being able to focus on content instead of having to take incessant meetings and wade through contracts – oh, yeah, and by increasing their revenue.

Karla Celis MiTu Influencer
Karla Celis, MiTu Influencer

Those meetings with brands could be incessant, indeed. There’s huge demand for placement in the hottest channels – and Hispanic is caliente. MiTú recently partnered with Maker Studios, provider of video content for millennials, to provide culturally relevant content to brands targeting the U.S. Hispanic market. Maker did have direct relationships with a host of brands directly, but it didn’t have expertise in multicultural content. Says Charlie Echeverry, MiTú’s chief revenue officer “Maker was getting inquiries directly about talking to Hispanic audiences. Their response prior to our partnership was that they didn’t specialize in it.”

MCNs usually offers various sorts of talent management and consultations on content. NBTV offers original content development, talent management, and video production services to celebrities.

MiTú’s top influencers have growth managers assigned to their channels to help them develop better content and take advantage of trending topics. For example, during the World Cup, a food channel might be advised to develop recipes tied to countries that were playing, while a beauty channel might get a suggestion to do a spot on what to use to paint your face in your team’s colors.

Echeverry says this is one of the biggest values MiTú offers to producers. “Recruiting them is easy,” he says. “The real value is in building them up to something greater than what they currently are, on a personal level but also through technology,” such as analytics.

This is the first of two articles exploring how Multichannel Networks (MCNs) work and their role in the emerging online video ecosystem. The role of Multichannel networks in the Latin Digital Media world will be analyzed in Portada’s upcoming Evolving America Summit at Digital Hollywood on October 21 in the Ritz Carlton, Marina del Rey, Ca.