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Finding the value in linear and digital marriages

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The Sequel

Finding the value in linear and digital marriages

Niche is just a starting point: Check out some life lessons from lifestyle MCNs that have formed strong partnerships with traditional broadcasters.
March 2, 2016

Niche is just a starting point: Check out some life lessons from lifestyle MCNs that have formed strong partnerships with traditional broadcasters.

Let’s talk media and money: It should come as no shock that linear broadcasters have seen a decline in ad revenue. On the flip side, while digital advertising on video has increased exponentially, it still doesn’t command near the same premium as traditional broadcasts.

Is there a happy solution somewhere in the middle of these two seemingly different formats?

Traditional channels suffer from a decline in viewers, particularly in the millennial and Gen Z cohorts. The Canada Media Fund, in its Keytrends Report 2016: Entering the Age of Experience report that while TV consumption has been relatively stable, with Canadians typically viewing 27.4 hours of television per week in 2013-2014, while millennials, who represent more than 25% of the adult population, watched 20.6 hours per week. Nearly all of them (96%) say they watched YouTube in the past month.

Many linear players are turning to digital companies for help in navigating this new reality. The blending of traditional and digital players isn’t new: there have been a number of significant moves from traditional companies into the space over the past two years. Disney’s Maker 2014 announcement, Warner Bros’ investment in Machinima and CBC’s partnership with Fullscreen demonstrate this demand.

When it comes to finding success in these marriages, while these mass-reaching organizations have scale on their sides (Maker alone has more than 10 billion views across its network monthly), it’s worth seeing how niche players in the space make these partnerships work.

The partnership between Toronto’s Corus, a network of specialty channels geared at women and children, and San Francisco’s Kin Community, an MCN geared at women and lifestyle content, began as a way for Corus to deepen its presence in digital and respond to increasing advertiser demands, says John Macdonald, its EVP head of women and family at the broadcaster.

Corus isn’t new to digital, he adds. The media company has long created online series, but they were largely treated as a way of promoting linear content. It received a fair bit of success for its existing TV franchises (which include hit titles like Property Brothers and Love it or List it), but Macdonald admits it struggled to find success with digital-first content.

While not strictly broadcaster-related, read CMF’s fascinating study on why Honda’s venture into YouTube content failed. One of the key takeaways that’s very applicable to all players who are steeped in traditional media: “It’s a YouTuber’s world, so learn to collaborate.”

Around the time these major mergers were happening with the biggest MCNs, Corus began looking for a partnership, he said. Kin and the network shared an audience and the content was complimentary. (While complex, scripted and unscripted content works on linear, shorter more task-oriented DIY works best on digital, he says. But the two fall neatly into the “lifestyle” category, targeting women, 25 to 45.)

The partnership works, first and foremost, because it helps assuage advertiser’s fears of digital video, Macdonald says. Though more brands than ever are working with YouTubers (finding the opportunity to grow reach and get closer to audiences appealing), advertisers have long been cautious when delving into the online video space – despite its popularity. It’s too new, too unproven for many advertisers, and metrics are still difficult to tie back in to sales results.

“Advertisers are used to buying ads in a certain way – they know how to buy radio, television print,” Macdonald says.

What’s more, a targeted media buy can seem difficult to achieve: YouTuber popularity crosses borders – one of Canada’s top stars Lilly Singh, for example, is hugely popular in India. But why would a marketer want to use their limited media spend on a YouTuber when there isn’t a guarantee of how much of his/her audience will actually be in a position to purchase the goods?

“There’s a lot of spillage of ads that are served into video impressions that aren’t truly monetized, which means (there are people who are watching these ads that the brand isn’t paying for,” Macdonald says.

But, “the absolute scale of business is big enough to matter, if you will, to advertisers,” he adds.

For brands looking to dip their toes in, the traditional media buy is enticing – a safety net, so to speak, he says. For something like Corus and Kin, it offers an opportunity to narrow the target audience – women, interested in lifestyle content.

What’s more, the tie in with the traditional media gives advertisers the assurance that its content will still be seen by the more familiar mass audiences linear can deliver.

Already the partnership is bearing fruit. A handful of new-to-Kin and -Corus advertisers have come on board, including Kumon and LG, which Macdonald believes is directly attributed to the partnership. The LG partnership paired the electronics company with the existing TV show Hockey Wives, with Kin Community’s Lauren Toyota (61,000 subscribers, 2.9 million views), who recapped the show on her vlog. The upcoming Kumon campaign will see Kin influencer moms create content that parents can use to spur a love of learning in their kids. Spots will also air on linear channels driving back to the digital content.

This partnership also offers both brands the opportunity to cross-pollinate their linear stars on new platforms. Corus stars Maripier Morin (Hockey Wives) and Cherryl Torrenueva (Game of Homes) launchedYouTube presences last year. While neither command large subscriber bases or hits at this time, Macdonald says both channels have been acting as good testing grounds for its biggest names to delve into digital. On the flip side, Kin member RachhLoves (887,000 subscribers; 64 million views) has been tapped to do short segments for linear networks in the Corus family.

Of course, it’s not just about easing access to advertising dollars.

For L.A.-based StyleHaul, it’s 2014-acquisition by Luxembourg-based TV network RTL has opened up a host of new opportunities for the brand.

CEO Stephanie Horbaczewski points to its recently opened offices in London, Singapore and Brazil as something that would never have been possible, were it not for the $127 million acquisition.

What’s more, while Corus and Kin work well because of their similarities, RTL has exposed StyleHaul to a number of new business ventures.

Horbaczewski points to an upcoming partnership with music company BMG. “We’re fashion and beauty. Music didn’t pop on my radar as being (an area to explore),” she says. Though she couldn’t provide details at press time, she says the partnership made perfect sense, even if the link between the two brands wasn’t totally obvious.

There’s also staffing resource sharing. She points to an internal RTL program that transfers staff temporarily between departments. This allows more transfer of knowledge between employees, which has been hugely beneficial, Horbaczewski says.

In fact, the partnership has created so many new opportunities, it’s become more important than ever for her to prioritize what’s best for StyleHaul specifically, making sure its core focus on fashion and beauty remains top of mind, she adds. And that’s a good problem to have.

For Corus, Kin, StyleHaul and RTL, everything is still quite new, in the test and learn phase.

But Macdonald, for one, believes the way of the future is a blending of both linear and digital.

“Television is tried

and true,” he says. “Digital is a wild west. There’s a lot of great promise to digital, but the pace of change (is so rapid). As advertisers continue to try and reach audiences that have become increasingly fragmented, what we’ve come to believe as gospel (is there is) an extraordinary (opportunity) in the merger of these two platforms.”

Interested in learning more? Check out the CMF’s posts: “MCN 101: Everything you’ve always wanted to know about multi-channel networks” and “From branded content to branded channel.

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