Retail as a Media Channel: Rachel Shechtman’s STORY

Rachel Shechtman is redefining the way we measure success in brick and mortar retail. Her 2000 square foot store in New York City–STORY–has the point of view of a magazine, changes decor like an art gallery, and sells products like a store. Against the odds, Shechtman’s innovative concept and business model drove STORY to be profitable by the end of its first year–physical retailers usually break even by year three.

STORY is intended to create unique experiences meant for the physical world and offers the type of in-person interactions that stimulate emotional brand associations which lead to word-of-mouth publicity. Shechtman explained during the BRITE ’14 conference that while digital retail has considerably progressed in the past twenty years, stores have remained in many ways static and, “judged only by their sales per square foot.”

Shechtman is redefining how to build a successful retail store in two main ways: by using brands as sponsors that contribute to the store’s concept, content, and revenue, and by monitoring the impact of the store experience, as much as its sales per square foot.

Like a magazine, STORY has an editorial perspective, releasing a new “issue” every few weeks. It engages shoppers by partnering with brands to rotate its design and merchandise around carefully curated content and experiences. Like an art gallery, the team behind STORY creates immersive experiences that encourage participation from store visitors, transforming every aspect of the environment: from wall color and textures to merchandise and fixtures.

STORY’s model of innovation through brand sponsorship helps bring a different source of revenue and provides unique encounters that cannot be experienced anywhere else. The Making Things STORY edition –sponsored by GE– used 75% of the space for “pure experiences,” with laser cutters and injection molding machines available for customers to make plastic robots, jewelry, sunglasses, and customized MetroCard holders.

In 2012, STORY partnered with Benjamin Moore to create the Color STORY, where Benjamin Moore got to showcase its newest collection, Color Stories, and present a session, “The Power of Color & its De-Stressing Benefits,” led by a Benjamin Moore senior designer and a color marketing expert. They taught attendees how to use color in small living spaces with the purpose of detoxing and de-stressing. Shechtman pointed out that not only does this provide a second revenue stream for STORY, but it enables the brand to be their own storyteller. As she explains, “Benjamin Moore knows a lot more about color than Rachel Shechtman or the STORY team.”

The current issue, Good STORY, features a combination of brands including TOMS, Uncharted Play, ROMA boots, and Bombas socks, focusing on the stories behind the products, their missions and their vision for social change. As explained on STORY’s website, “each product tells a story that matters because it’s a story of people joining together to do something good.”

BY GABRIELA TORRES PATIÑO

The Hunt for ROI from Social Media: A BRITE ’14 Panel

Everyone is on the hunt to figure out how social media can best impact a firm’s revenue. So, we are pleased to tackle this topic at BRITE ’14 with a dynamic panel of business leaders trying to crack the nut on how to spur social sharing and generate business revenue from it, which will include: the CEO of Bloomberg Media, the Head of Performance Marketing at Facebook, the President of BuzzFeed, and the SVP of Strategy and Development at The New York Times.

Part of the challenge is even defining what should go into any equation to evaluate “social ROI.” Within social media there is a three-way split between paid, earned, and owned. Social messages then interact with all the other touchpoints connecting a brand and its consumers, from TV ads to in-store displays. Plus, one has to consider category and business model differences—will the same process work as well for a low-involvement CPG product as compared to selling an automobile. Finally, there is the analytics challenge to move beyond “last click attribution” in order to more accurately understand and credit social media’s influence on the consumer’s path to purchase.

The Facebook ecosystem is obviously a key player here, and it is constantly adapting itself to find the best mix of paid/owned/earned for its brand advertisers. Our panelist Dhiraj Kumar ‘07, Facebook’s Head of Global Performance Marketing, sees clear evidence that Facebook’s move to add native ad units (the sponsored posts in News Feeds) have made a positive impact. Early studies have shown significant gains in click-through rates and drops in cost per click and cost per acquisition, leading to ROI increases when compared against sidebar ads. Adobe’s Social Intelligence Report (.pdf of the Q3 2013 report) provides additional nice data on paid/earned/owned effects on Facebook’s platform, and most recently found that the ROI from paid Facebook ads is up 58% year-over-year.

The recently appointed CEO of Bloomberg Media, Justin B. Smith, previously helped lead The Atlantic into the digital world. In the realm of generating profit from social media, he notably spurred the creation of two sub-brands, Quartz and The Atlantic Wire, that were designed to grow The Atlantic brand by avoiding any pay walls, including curated content, and allowing articles to be easily spread via social media. This past summer, 10 months after its launch, Quartz had millions of unique viewers and was generating half of its traffic through social sources. Its strong social distribution allowed the site to operate with a branded content model, and has been a leader in such revenue generation.

Last week we profiled  a third panelist, Jon Steinberg ‘03, President of BuzzFeed, whose company uses social sharing to build its brand and generate revenue from branded content. BuzzFeed has taken such an analytics-driven approach to social media, that they do A/B tests to optimize the size of the Facebook button on its website.

Our fourth panelist, William Bardeen ’04 is the SVP of Strategy and Development at The New York Times, which has also just joined the world of native advertising and will work with marketers to best understand the social flow of their branded content. Bardeen knows that the New York Times faces competitive challenges from the likes of upstart media companies like BuzzFeed as well as from Twitter, which is becoming the go to place for breaking news. Given that, The Times and other traditional news organizations are working hard to strike the balance between being a strong player in the social world—to hold on to readers and ad revenue—while maintaining a consistent level of well-researched reporting standards. 

REGISTER NOW for BRITE ’14 (March 3-4) and listen to this dynamic panel of business leaders.

BY MATTHEW QUINT

How Branded Content is Feeding the Staff of BuzzFeed

On all sorts of media sites, brands now seek our attention by sponsoring content rather than placing a banner ad. BuzzFeed is a pioneer of this marketing approach and attracts dozens of leading brands to mingle their content among its own articles.  The company built its brand by taking an analytics approach to social sharing, turning the success of the “listicle” format (here’s a recent favorite of ours) into a branded content business model. At BRITE ’14, BuzzFeed President Jon Steinberg will share how the company accomplished this and what it is doing to continually build and expand its brand.

All of BuzzFeed’s revenue comes from social content marketing (aka branded content, native advertising, sponsored posts,. . . ok, we will stop here). As Steinberg notes in a Sparksheet interview, “Advertorials and word-of-mouth have been a force in marketing and research since the 1950s. We’re just doing that online. It’s going back to good advertising and getting away from banners, which were always a terrible advertising product.”

BuzzFeed helped rejuvenate and adapt this form of advertising in which media companies – including players like The Atlantic and Forbes – now act as advisers, and even content creators, for the brand and its agency. This summer, BuzzFeed began piloting a new accreditation course, the Social Storytelling Creator Program, aimed at training agencies whose clients are sponsoring stories on BuzzFeed. “When you’re innovating a new platform like we are, you have to offer education,” explains Steinberg.

Even with a wall separating editorial and sponsored content staffs, however, this “ads that look like articles” technique has its critics. Take, for example, Andrew Sullivan who questioned its ethics by stating, “It’s more like product placement in a movie – except movies are not journalism.” In fact, Sullivan’s specific analysis and critique of BuzzFeed actually helped spur the company to more clearly and consistently identify all its sponsored articles.

Despite such criticism, with the revenue needs of the media and the interest of brands to develop engaging content, it is clear that sponsored articles will multiply. The evidence of how well this form of marketing “works” is still being compiled, however, but early indications are encouraging for brands. For example, a study conducted last year by IPG and Forbes (.pdf) found that branded content stories were considerably more effective than pure display ads at driving such measures as brand recall and brand favorability.

From a content standpoint, companies must find the most effective ways for sponsored articles to meet the needs of both the brand and the reader. At BuzzFeed, most brand campaigns include at least 5-10 unique pieces of content designed to integrate tone and message for the brand. “The challenge is if you unbalance yourself in either direction,” Steinberg acknowledges. “If it’s so fun and interesting but doesn’t convey a brand attribute, you have an issue. If it’s only about why a product is awesome, with no give or interest, then you’ve similarly erred.”

REGISTER NOW for BRITE ’14 and catch Jon Steinberg talk about how sponsored content, analytics, and even hard news are shaping the future of BuzzFeed.

By MATTHEW QUINT

What You Don’t Know About One-Night Stands

If you’re reading this, clearly I’ve caught your attention. I’m sorry to say this isn’t an article about one-night stands.

At some point in recent years, many of us have likely clicked on what we thought would be an interesting article only to discover that it was a paid advertisement in editorial guise. Content marketing is not a new concept, but it’s becoming an increasingly popular strategy for media companies and brands to team up on new ways to drive revenue. According to Pew Research Center, sponsored content increased by 56% in 2011 and is still on the rise.

Edelman’s Chief Content Officer Steve Rubel stresses that sponsored “content is no longer optional. It’s imperative.” At BRITE ’13 Rubel explains, “It’s hard now to amass large audiences the way you used to. And that means money problems for everyone.” He notes, however, that “out of economic disruption come great opportunities.” Rubel says that display advertising has become less lucrative in recent years, and can even drive down CPM. Content marketing, on the other hand, is a fraction of the cost with the potential for greater results.

Consider Wine Enthusiast magazine. Sure it’s a media company, but it’s also a brand. By incorporating custom content, Wine Enthusiast successfully increased site traffic by 154% and boosted monthly email opt-ins by 50%. Director of Internet Marketing Erika Strum tells MarketingSherpa:

We put time into creating… content that helps people either make a buying decision or entertains them. Even if they aren’t making that purchase in the moment, we feel that they will come back to us as a… source of information.

Rubel has identified three ways that brands are partnering with media companies—syndication, integration, and co-creation. These partnerships borrow from traditional marketing models like paid media and product placement, but they now overlap with owned and earned media as an additional driver of revenue.

• Syndication: Rubel describes this method as “advertorial reinvented.” Sometimes the sponsor scripts the content, sometimes the publisher assumes this role, and sometimes they work together to design content.
• Integration: Similar to syndication, integration stems from product placement. But rather than placing a product within eyeline (think Wayne’s World) the brand becomes part of the narrative (think Mad Men).
• Co-creation: The primary difference with co-creation is that the sponsor provides the funding, but the media company takes responsibility for the content. Rubel likens this to a sports stadium. Gillette bought the naming rights to the home stadium of the New England Patriots, but Kraft Sports Group, which owns and operates the venue, is responsible for the action on the field. Okay, okay, “action” may not be what non-New Englanders would call it. But you get the point.

While many media companies have embraced sponsored content, some are still resistant. Google for one refers to this as “commerce journalism” and explicitly states on its website:

Stick to the news–we mean it! Google News is not a marketing service…. [If] we find non-news content mixed with news content, we may exclude your entire publication from Google News.

As with anything, there are associated risks. It can offer control of content, data and measurement, and opportunities for innovation. But there is the potential for backlash. You may recall this past January The Atlantic issued an apology for posting a content piece from the Church of Scientology. Readers complained that it resembled a traditional editorial, not clearly identifying that it was a sponsored article. “We screwed up,” were the words of The Atlantic‘s media relations team.

Rubel emphasizes, though, that sponsored content isn’t going away, at least not any time soon. He advises businesses to adapt to this marketing model. “You have to put a content engine inside your company. If it’s not there already, you have to think about how to get it in there.”

What do you think?

Watch Rubel’s BRITE ’13 talk to learn more about the benefits, and the risks, of these new media-brand relationships.

By ALLIE ABODEELY

Investing in Unconventional Thinking

Some of the best brand stories emerge from unconventional thinking, especially in a market environment where pure financial wins are harder and harder to come by. Big blue-chip companies are increasingly turning to less traditional methods for expanding brand awareness and affinity by adding a more “human” touch to their marketing efforts. At the BRITE ’13 conference, PJA Advertising + Marketing’s President Mike O’Toole led a panel of marketers from Intel and PepsiCo who have invested in just this type of thinking. Panel members relayed some unique brand-building tactics and how they’re positioning themselves for stronger relationships with current and future customers.

O’Toole, host of PJA Radio’s “The Unconventionals”, started the conversation by noting some of the common characteristics of outside-the-box approaches. In particular, he highlighted the long-term nature of these initiatives, saying, “There’s a sense that if you create experiences that your customer cares about, the goodness will accrue back to you over time.” He also notes that content-owned platforms, vs. external media sponsors, have become a popular tactic in recent years. Txchnologist, an online magazine created in partnership with and sponsored by GE, is one example. Populated by a network of freelance writers and reporters, Txchnologist articles and op-eds discuss technology and innovation’s impact on modern day society. Through this vehicle, GE is able to drive conversation in the space and strengthen its position as an industry thought leader.

Another approach is to provide an outlet or resource that allows consumers to relate better to, or learn from, a brand. Both Intel and PepsiCo have heavily relied on this strategy, lending to the success they’re now seeing nearly three years after kicking off their respective initiatives. Intel’s Creators Project was developed to support new and emerging artists in music, film and design. Run by Creative Director David Haroldsen, the Project produces videos, releases albums, and builds stages for bands, among other things – all in the hopes of showing younger generations how technology enables them to reach larger audiences and celebrate creative expression.

PepsiCo, on the other hand, dedicates about 10% of its digital media spend working with startups during their nascent stages, believing that early investment in these highly innovative companies will lead to valuable business partnerships down the road. PepsiCo Beverages’ Global Head of Digital Shiv Singh tells Crain’s, “We decided to formalize a relationship, to really think about how to bring infrastructure to supporting startups, helping them help us.” Singh likened the relationship to a venture capital firm, but without the need for a checkbook. Startups benefit primarily from PepsiCo’s guidance on things like monetization strategies and marketing insights. PepsiCo team members co-locate incubator spaces, sponsor key events and broaden media relationships. In turn, these startups help develop PepsiCo’s credibility in the social and digital spaces.

Both Intel and PepsiCo have hit plenty of speed bumps before achieving the results they are seeing today. The panelists were also quick to underscore the importance of ongoing measurement. Data and findings from focus groups, website traffic, and attendance at sponsored events are critical to recalibrating program strategy where needed and helping to secure increased budget, time and credibility.

Watch BRITE ’13’s “Unconventional Marketing Investments” to learn more about how PepsiCo and Intel go beyond traditional marketing tactics to strengthen consumer engagement.

Visit Public Radio Exchange for full episodes of “The Unconventionals,” a PJA Radio Production with academic sponsor The Center for Global Brand Leadership at Columbia Business School.

BY NANDITA RAY