Advertising Age | March 5, 2007 | S-1DIGITAL REPORTSpecial Report“The biggestchallenge [this year]will be online andoffline collaboration”—Carat’s David VerklinLive Earth concert“is the greatestshowcase for whatour services can do”—MSN’s Joanne Bradfordmadison meets vine, but how does Hollywood meet Silicon Valley? Or does it?Those are questions that have plagued the online ad industry for the past twoyears as broadband penetration has grown, people have shown a willingness toplop down in front of the computer monitor for everything from three-minuteclips to three-hour baseball games, and a robust market for online video advertis-ing has developed. Online giants’ response to this environment has varied, but it doesn’t indicate amass drive toward generating new content yet. Google hasn’t shown any interest increating its own content. AOL has been an early proponent of aggregation, workingSTICKINGPOINTSee CONTENT on Page S-2Eight movers and shakers cite topdigital trend or challengePAGE S-6Q-and-A with chief media officerof the Microsoft portalPAGE S-2By ABBEY [email protected] online giants havetried before,but MSNhas found an onlinecontent model thatdraws people into portalWILLIAM DUKES-2 | March 5, 2007 | Advertising AgeDIGITAL REPORTwith corporate sibling Warner Bros. to syndi-cate second-run TV shows. Yahoo took astrong stance—and then reversed it. Mi-crosoft, on the other hand, has most recentlybet much of its content efforts on branded en-tertainment.Yahoo hedged from its early stance inwhich Lloyd Braun said a little too much a littletoo soon, declaring he would create an “I LoveLucy” moment on the internet—a phenome-non,in other words,that would rival the one in1950s TV when one in four householdswatched Lucille Ball.Perhaps even hiring someone like Mr.Braun, a successful TV executive who green-lighted such hits as ABC’s “Lost” and “Desper-ate Housewives,” set the bar too high. Today,Yahoo does have the seeds of a very successfulmodel in its online show “The Nine,” where acharismatic VJ counts down the top nine“webfinds” of the web that day.REVEILLE DEAL ROLLINGJust months after Mr. Braun issued a bit of amea culpa—a new stance,much more humbleand realistic—Microsoft Corp.announced am-bitious content plans of its own. Last year atMicrosoft’s Strategic Account Summit,it tout-ed a content deal with TV production companyReveille that would bring a new model to theway content is done on the web.“Marketers have learned, as we’veall learned painfully,some of the mod-els that have worked in other mediadon’t work very well online,” saysGayle Troberman, senior director-branded entertainment and experi-ences team at MSN.For the MSN portal,which alreadyattracted a massive audience, the fun-damental question was how to getpeople to spend more time on the site.“Big growth comes from deepen-ing the relationship with the audi-ence,” says Rob Bennett, generalmanager-entertainment and videoservices at MSN. “If you can geteveryone to do one or two or threemore things,you become a more central part oftheir online experience; they become moreloyal, and they become more valuable to ad-vertisers.”That was the primary reasoning behindadding original content to MSN. The portallaunched its first original material last yearwith a show called “Fan Club,”which followedan Illinois minor-league baseball team, theSchaumburg Flyers. It was interactive—view-ers could vote for the lineup and be voyeurs inthe dugout and locker room. The show didn’tget great audience numbers, but it proved thatpeople viewing the series stayed on the sitelonger and became more involved.Microsoft’s Reveille partnership was creat-ed last spring. MSN would seed a productionfund that Reveille could draw upon to developpilots for the 10 shows to be produced as part ofthe deal. MSN has right of first refusal on webshows and content Reveille produces.The pro-duction company will pitch a slate of ideas,some of which will be greenlighted right away;others will be shopped around to advertisingcustomers to gauge interest. Sometimes theshow ideas will come from MSN’s discussionswith marketers—identifying a particular needand bringing it back to Reveille.One of the first series spawned was “Chef tothe Rescue,” meant to be an edgier approach tofood programming.MSN shopped it around tothe usual package-goods marketers, and KraftFoods was interested. But Kraft said suburbanmoms were less interested in sitting down towatch funny,entertaining cooking content on-line than they were in using content thatwould help them plan better meals. CouldMSN program the show in that direction?Having the marketer at the table right awayhelped guide the direction, Ms. Troberman says.She took the idea back to the creative folks atReveille,where “we had our moments,”she saysof the reception to the change in direction. But“we learned a lot about the consumer who reallywas the target for this kind of programming.”Microsoft knew it had to create online con-tent differently from how the big-budget stu-dio world goes about making hit TV shows.Af-ter all, the economics are very different. Mr.Bennett says in the case of “The Big Debate,”they created—for the price it would cost tomake a fairly low-budget 22-minute TV pi-lot—20 three-minute episodes.The trick is es-chewing established writers, directors and tal-ent in favor of up-and-comers. They’re edgierand less expensive,Mr.Bennett says.Marketers are figuring that out as well.An-heuser-Busch has launched Bud.tv relying onsuch talent, and American Express Co. has acontent studio.Despite the interest in online branded en-tertainment, one of the biggest challenges re-mains building up strong enoughreach and frequency to breakthrough.“Building an audience takes timeon the web because usage is so distrib-uted, even more than diversified TVviewing of today,” Ms. Trobermansays. While some brands have pro-duced stellar virals, for every onethat’s a hit, many go unwatched andunnoticed.MSN maintains that a big portalcan provide frequency needed tobuild an audience. “Kraft’s investingin a season of ‘Chef to the Rescue’gave us six months to get it right,”shesays. “We can find those consumersacross Live Mail, Messenger, OfficeLive, the MSN home page, MSNBC, evenXbox, and remind them to come back.”Adds Eric Bader, senior VP-digital at Me-dia-Vest, New York, which worked with MSNon