Advertising & Media (Desperate Times Call for Desperate Measures)

It's one thing to see a flying car whisk by a Coca-Cola ($KO) sign in Blade Runner 2049. Or Vin Diesel crush a Corona ($BUD) before crushing a skull in Fast and the Furious 2049 (how many of these are there?). Or Mark Wahlberg mention a motorcycle he likes in Big Daddy. It's pretty obvious that those are placement ads. But its an entirely different story when a large corporate partner like Proctor & Gamble ($PG) purchases a plot line and dialogue. That isn't so obvious. But so it is. This week, Variety reported that P&G has done precisely that in a "unique advertising pact" with American Broadcasting Company ($DIS). The network will create an episode of "black-ish" that will - as a central plot device - discuss a P&G-produced short film and its implications on race merely because that's "an issue that the advertiser is trying to burnish." Well, ok, then.

Cord-cutting is getting aggressive and we get that Disney needs to act in-kind to ensure revenues. ESPN is under siege, Netflix ($NFLX) has a head start on stand-alone streaming, and even Star Wars toys have underperformed. But how this is handled will be a bellweather of things to come.

For instance, Instagram influencers are under strict guidance from the FTC on how to handle sponsored posts. Failure to comply has gotten various influencers - the Kardashian's being one notable example - in hot waterRemember the Fyre Festival? Riiiiiiight. To what degree are P&G and DIS required to alert viewers that the dialogue they are listening to is paid for? To the extent there is an alert, should it be noted at the bottom of the screen at the time of the dialogue (makes sense) or noted in the end credits (doesn't make sense). This may very well be another instance where regulation has to play catch-up to innovation.

Meanwhile, there's been a notable rise in corporate venture capital (CVC) arms over the last several years. What we haven't noticed, however, is the blatant weaponization of the CVC's distribution channels to help scale product. Yet. We wouldn't be surprised to see a rise in (shameless) native plugs of new apps or hardware in future mainstream broadcast content. And that - on the basis of scale opportunity alone - could be a real competitive advantage for corporate-backed startups relative to venture-backed startups. Query, however, what that would do to the viewing experience. Netflix ($NFLX) and HBO ($TWX) don't serve ads for a reason. Yet. We'd be shocked, though, if it doesn't come eventually (our money is on NFLX first). 

P.S. Elsewhere in advertising, Amazon is coming ($AMZN) and coming fast with ad revenue growing faster than Google ($GOOGL) and Facebook ($FB). 

Long Influencer Marketing (Despite Ourselves)

All Hail Gwyneth Paltrow and Kim Kardashian

So, we're not all too impressed with Gwyneth Paltrow or Kanye West: the whole idea that those two vapid degenerates are influencing anything gives us concern for the future of this great nation. And we thought that the utter dumpster fire known as the Fyre Festival would at least temporarily stick a fork into the whole concept of influencer marketing. Alas, we were wrong. Turns out that Adidas' rise and Under Armour ($UA) and Nike's ($NKE) fall is somewhat attributable to this phenomenon. "Experiential" retail is all the rage right now and not a day goes by where we don't hear some tunnel-visioned advisor mention the concept - always in the abstract we might add - as the panacea for ailing retail (see Toys "R" Us). But, maybe part of the issue was Toys' marketing strategy. Maybe, just maybe, Geoffrey the Giraffe isn't influencing much of anything. Beyonce and Serena have babies now: maybe Toys ought to take that $3 billion of new liquidity and hire one or both of them as a spokeswoman. It has worked for Weight Watchers ($WTW); it has an insane 1-year performance. This may buy some time for Toys' execs as they try and figure out what the hell "experiential retail" ACTUALLY means. 

Short Music Festivals

Mere weeks after the Fyre Festival debacle, the Pemberton Music Festival has been cancelled and the organizer has filed for bankruptcy. Chance the Rapper and Muse were among the headliners. Simply seems to us that the music festival space is getting wildly over-saturated and duplicative. Does iHeartMedia have a concert business? Of course it does.

IHeartMedia Music Festival > #FyreFestival

We suppose it could be worse: this could be the Fyre Festival. Its looking increasingly likely that the lineup for the next IHeartMedia Music Festival will include U2, Sia, Kendrick Lamar and Kirkland & Ellis LLP*. Something for everyone. We mean, seriously, we'd rather listen to a K&E tax attorney than Ja Rule anyway. Yippee!

*for the uninitiated, K&E is a bankruptcy law specialist.