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Published: May 26, 2009

 
 

The Promise of Private-label Media

Effective private-label media will not replace other forms of digital marketing entirely, but it will inevitably raise the bar in terms of quality and ROI. In the same way that retailers such as Target and Costco have established house brands that compete on quality and not just price, private-label media will become, for some consumers at least, a viable entertainment and information alternative to media developed by publishers (both traditional and digital). The subsequent siphoning off of consumer engagement and ad spending has significant strategic ramifications for marketers, their agencies, and, of course, media companies.

Everyone in media and advertising knows that creativity is critical to a high-quality branded environment. But creativity alone does not drive conversion or return on investment. Successful private-label media efforts are grounded in insights into how consumers navigate digital media, the types of utility or services they associate with a marketer’s brand, and the kinds of experiences they willingly seek out. Furthermore, an effective private-label media strategy also fits into a marketer’s overall game plan for digital innovation. It’s not a stand-alone effort.

In creating and maintaining the sites, companies need to select their partners thoughtfully. Retailers’ private-label offerings are managed by a mix of third-party suppliers and leading manufacturers. Marketers, for their part, are assembling a broad group of potential allies. Some marketers are working with ad agencies to build their media assets. Others are partnering with leading media companies, such as Meredith or MTV Networks, to create private-label offerings that integrate into their paid media campaigns. In business-to-business media, players such as International Data Group in technology, LexisNexis in legal research, and Hanley Wood in construction are helping marketers build Web sites, develop database marketing campaigns, and create digital assets that gather leads.

As marketers bulk up their private-label media offerings, tensions are increasing along the advertising value chain — most notably between agencies and media companies, as each strives to become marketers’ preferred partner. In a recent Booz & Company study, “Marketing & Media Ecosystem 2010,” conducted with the Association of National Advertisers, the Interactive Advertising Bureau, and the American Association of Advertising Agencies, 70 percent of the agency respondents said they were taking on “publisher roles”: developing content and other intellectual property for their clients. At the same time, 53 percent of media companies reported that they were working more directly with marketers. They are increasingly taking on some of the services formerly provided by agencies that support the development of custom or private-label media.

Agencies or media companies — which will prevail? In today’s Darwinian environment, paid media budgets are under enormous pressure and everyone is fighting for share. (See “Digital Darwinism,” by Christopher Vollmer, s+b, Spring 2009.) Those players that adapt fastest to take advantage of private-label media will likely be among the winners once the advertising value chain is restructured. The same observation holds true for marketers. With their own digital media, marketers can achieve a broad set of marketing objectives — branding, consumer insight, and even lead generation — often at a higher return on investment and lower overall cost. For most marketers, the lure of such a proposition will prove irresistible. As a result, we expect the movement toward private-label media to be one of the lasting developments that emerge from the current upheaval.

Author Profiles:

  • Matthew Egol is a partner in Booz & Company’s global consumer and media practice and is based in New York. He focuses on growth strategy and sales and marketing effectiveness for clients in the consumer products and media industries.
  • Leslie H. Moeller is a partner with Booz & Company in Cleveland. He leads the firm’s North American work in the consumer, media, and retail industries. He is the coauthor of The Four Pillars of Profit-Driven Marketing: How to Maximize Creativity, Profitability, and ROI (McGraw-Hill, 2009)
  • Christopher Vollmer is a partner with Booz & Company in New York. He leads the firm’s global media and entertainment practice, and focuses on strategy development and implementation for those industries and consumer goods. He is the author of Always On: Advertising, Marketing, and Media in an Era of Consumer Control (McGraw-Hill, 2008).
 
 
 
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