Branded Content Goes Gavel to Gavel

Auctions for media time and space are nothing new. But this week, a Los Angeles based packager of branded content projects, Brand in Entertainment (BiE), is producing what industry executives say is the first auction to sell off brand integration opportunities to the highest bidders.

The auction has been given a mixed reception by media agencies, which say its insertion into the process raises more questions than it answers. Some wonder if auctions would turn the process completely on its head (imagine the film The Italian Job with Ford pickup trucks instead of Mini Coopers).

The auction will be held at Christie’s in New York on Jan. 20, and BiE has compiled a book of more than 400 integration opportunities in an array of content from TV shows and movies to video games and Webisodes.  Among the offerings are a new comedy film project, Unamerican, with Jessica Biel and John Leguizamo (an undisclosed studio is picking up the project); a reality TV show called America’s Next Pro Skater (the distributor has not been disclosed) and a YouTube Web series entitled “My Profile Story” about a college student whose Facebook and MySpace pages come to life (production details were not available).

BiE, formed in 1996, matches content owners such as NBC and Mark Burnett Productions with marketers and brands such as Procter & Gamble, Kimberly-Clark and Panasonic. It’s expecting approximately 70 potential participants. There will be both a live auction, where bids can be placed in person and by phone, and a simultaneous silent auction, where bids are placed electronically.

According to BiE chairman Jim Rose, the idea is to bring “focus and awareness” to the branded-content space “in a major event setting and then drive transactions.”

Rose, a former CEO of Havas’ MPG, likens the auction in some ways to the network upfronts, noting that talks between parties in both cases start beforehand and continue even after a deal is struck. Agencies, however, point out that the auction will offer a tiny fraction of the branded content opportunities that are available each year.

And while some agency executives said their clients were curious about the auction, others questioned its value.

“I’m not sure of the need,” said Greg Kahn, evp, business development director at Optimedia. “We have very strong relationships with many production partners, and we are aware of the opportunities that are out there.”

By definition, said Kahn, an auction connotes “bidding up rates for particular properties,” which certainly benefits the content provider and BiE, which collects a premium from both seller and buyer. But marketers are probably better served by private negotiations, he believes. “It’s a competitive business and we have opportunities that aren’t exposed to the rest of the world,” said Kahn.

Another senior executive at a major media shop also noted that many of the branded integrations in the BiE book are for projects that have not yet been picked up for distribution by a media owner. “If you don’t have a distribution channel lined up, how do you understand the value of what the concept will be?” he asked. “Clearly the value will be different if it’s a digital platform concept versus a cable or broadcast property.”

Another executive noted that networks usually want to be involved in the integration process as well so that they can attach an inventory buy to the agreement. A pre-sold integration “could eliminate a whole category of brands from the show” that don’t want be to associated with a competitor, the source said. “So that dynamic gets totally disrupted,” the source added.

But the same executive said his shop would be in attendance because some clients are curious. “When something happens and it’s a first, clients want to hear about it,” the executive said.

For some others, the auction process is a non-starter for branded integrations. Brian Terkelsen, president of connectivetissue, a unit of MediaVest, said, “Like all media, branded entertainment has evolved way beyond a simple commodity, so the auction process seemingly plays to the lesser strategic aspects of sophisticated marketing.”

Today, Terkelsen added, integrations are more strategic than tactical. He noted that “strategies and any subsequent execution need to deliver an experience. Getting the viewer involved with the brand or taking action is where we can really drive results for brands. Ideas and data need to be the guideposts, not inventory.”

Rose countered that all the winning bids at the auction would be subject to the completion of the parties agreeing to all “final details” of the integration.

“Clients have the ability on the front end to be put in the content process with the writers and the producers,” he said. “It’s not just a transactional process.” And at the end of the day, if those final details can’t be agreed to, the parties can walk away. “It has to work for both sides,” he said.