Every brand is an entertainment company waiting to happen – they just need to drop advertising to realise it.

Advertising is a tax

If I want to watch or read the entertainment I love, the price I must pay is exposure to advertising. We effectively have our passive attention taxed in order to be rewarded with the content we actually want. Now, there’s a big old ‘history of advertising’ lecture here to explain how the entertainment industry colluded with brand owners to give birth to modern advertising, but we’ll save that for another day.

Instead, let’s talk about the $570 billion spent globally on paid advertising last year. While the ad industry’s topical focus in 2015 was all about the shift from broadcast to digital, and how much of that is mobile and programmatic, what we should be focussing on is whether we need paid advertising in the first place.

For years ad agencies have applied their talents to creating entertaining ads. But honestly, other than a small percentage of them that act as cultural signifiers (such as John Lewis Christmas commercials in the UK, or a Super Bowl spot in America), most are unwelcome interruptions. Thankfully entertainment systems like TiVo BOLT and Sky are doing a good job of helping us bypass TV advertising, while adblocking plugins can sift out our internet interruptions.

So the question is, if most advertising isn't entertaining and consumers don’t want it, what could we do with $570 billion to create a better outcome?

To figure that out let’s look at what we need advertising to do for a brand. Let’s agree that advertising can split into two basic functions. The first is to incentivise a purchase – an offer, a sale, a new product or movie launch for example. The promotion of a product’s functions, benefits and value is important information for a consumer to base a purchasing decision upon and provides competitive distinction for a brand. However, we know that advertising is no longer the best answer for sourcing that information. Retailer led offers, unbiased customer reviews and comparison aggregators all provide a better utility function to connect consumers with the products and services they want to purchase, so the effectiveness of advertising is diminishing in its ability to influence the sale.

So what about the second function; to build the awareness, affinity and advocacy toward a brand through it’s perceived reputation? Ultimately, the objective with advertising here is to positively enhance perceived reputation. How can this objective be met successfully if the medium by which the reputation is trying to be enhanced is being actively dismissed, avoided and ignored by consumers? Altogether, this doesn’t seem like the best way to invest $570 billion for the growth of brands does it?

Ad spend is entertainment's fund

It’s time to drop advertising. It’s time to redirect media spend into what it ultimately funds - entertainment. It’s time that brands get serious about their role in the entertainment industry and shift their marketing focus from being the sponsor to becoming the producer. The proliferation of entertainment channel providers combined with smart TVs and internet-based viewing has blown the doors wide open on the industry and is ready and waiting for brands to step past the advertising model and into entertainment production.

The real challenge is that whilst advertising is becoming increasingly less effective, it is well optimised for measurement. And if you can measure something it inherently feels lower risk than doing something new, where measurement is still being established. Even if the potential return is higher. And why do something different if there’s no incentive to be different. But wait, there is an incentive.

A brand’s reputation relies on how culturally relevant it is in a consumer’s life. Our entertainment consumption is how we relate our lives to our world - to our cultural codes, influences and the subconscious beliefs that we hold most passionately. When an individual, company or product provides a source of entertainment we care passionately about, it is imbued with the essential qualities that that entertainment possesses - it becomes as a symbol of those passionate beliefs, which in the case of a brand generates brand equity.

Create a tangible feedback loop

By providing a tangible link between the consumer’s choice to purchase a brand and the contribution that choice makes toward creating the entertainment they care about, a brand is establishing a positive feedback loop. The loop transmutes positive sentiment from the enjoyment of experiencing entertainment into the brand. The consumer then actively endorses it by choosing to purchase that brand based upon the knowledge that it will be contributing back into their entertainment.

This approach isn’t new. Many successful lifestyle brands understand the value of producing cultural entertainment – indeed Red Bull built their global Media House on this principle. Now they are in a position where they have effectively found a way to monetize their marketing output by selling the entertainment they produce to media outlets rather than paying for its placement – smart. But doing this isn’t easy. There is a reluctance with brand marketers to step out of their advertising comfort zone and it will also take sustained efforts to convince cynical consumers that brand produced entertainment will be great.

But if I were the CEO of a big consumer brand today, I’d want to know that my share of that $570 billion investment was being spent in the most effective way for the brand. I’d be asking my marketing team to provide me with the scenarios for shifting out of an advertising model and into an entertainment model. I’d want to know how we’re going to transform our marketing expenditure into a new revenue stream for our business by becoming an entertainment company.

Would love your thoughts, opinions and reactions...