Tag Archives: app

or: IP licence versus one-off fees to get consumers continuous engagement.

In the light of developing applications and branded entertainment for social networks, I encounter the question whether we in advertisement should choose to “license IP” rather than ask for a one-off payment of creative service. I find that there is at least one very good reasons for agencies to be against selling an idea and execution for one-off payments: research and development.

image by Wili_Hybrid

In terms of payment clients have a natural hurdle to overcome here. Marketing departments usually buy campaigns with a limited time span (mostly the media schedule), and measure the numbers of customers exposed to their brand rather than them being continuously engaged with it. But as we know, a social network app has the potential to grow and continue its own life if done well. We would like our fabulous branded content to live on and be mashed-up into eternity. And we creatives actually like to turn over parts of our material for “fair use” so that we make the campaign live longer, but do we currently get paid accordingly?

Now would any agency or brand manager in their right mind take campaign content down and send “cease and desist”-orders to disobedient consumers that keep distributing a copy – simply because the campaign schedule has officially ended?

image by Foxtongue

Apps and online content can be so much more independent and alive (dare I say magical?) than a print or banner ad that ran with a certain awareness or click-through target. And if not magical by creative means, they might make the clients smile when e.g. selling virtual avatar goods inside their social app becomes a revenue stream.

That is why I want to pitch R&D as one aspect of how Creative Departments can work better and I reckon it will make sense to both sides. Taking the example of an application in a social network (like our work for SEEKat NetX) I can predict that keeping a flat-fee structure means:

1. no client wants to pay 100% of the R&D effort it really takes to be successful in these new environments
2. no creative department (and ultimately agency MD) can sustain paying for this learning curve with overtime and “award project” status.

Change the model around to an IP approach and:

1. the client only pays for a portion of the R&D,
2. the client participates in the agency’s growing expertise by getting better creative products,
3. agency and client work together (sharing insights, results, feedback) and tweak the output rather than one talking up the immediate results of a static product and the other mistrusting what they are hearing
4. the agency can retain creative guns (“advertising engineers” anyone?) with more than funky interiors, relaxed dress codes and hefty salaries by simply letting them share the IP-revenue (for as long as they are part of the team),
5. the agency has an incentive to keep improving the creative so it fares well and over time delivers more and more entertainment, service, social cohesion, or whatever its focus is. Then the agency can re-use it for another project.

The last point might have caused you to cringe if you understood it to be about standardization of ideas. By no means do I propose a cookie-cutter “that will do just as nicely for our next client!” creative approach. What I mean is “re-using your knowledge how it all works”. Examples include how to compress video for optimal viewing pleasure (technical), how to let social peer groups know about it (media) and how to design interactions with it so it becomes easy and compelling to share (creative).

When creative departments in integrated and digital agencies build a sustainable model around research and development they will establish themselves for the long haul. As I wrote before, creative in advertising won’t get any easier.