When General Motors Corp. and Procter & Gamble Co.-the top two buyers of TV advertising-said in 2005 that they would spend considerably less on TV commercials in the coming years and devote more dollars to nontraditional marketing, the announcement caused a stir at the major broadcast networks. Would other advertisers follow?
But as it turns out, such nontraditional marketing has been a boon to the traditional medium of television in the form of product placement and integrations, tie-ins, and promotions.
The number of TV product placements jumped 30% in 2005 to 106,808, according to Nielsen Monitor-Plus' Place*Views tracking service. Reality shows accounted for seven of the top 10 shows with the most placements.
In recent examples, GM has used primarily appearances within shows like CBS' "Survivor" and NBC's "Las Vegas," as well as launching a micro-series called "The Courier" on CBS, to unveil the Pontiac Torrent sport-utility vehicle. Pontiac used NBC's "The Apprentice" to launch its Solstice roadster.
The movie screen long dominated the discussion of such tactics, but in the last several years, TV has elbowed its way into the spotlight with sponsor-laden hits like reality shows "The Apprentice," "American Idol" and "Survivor," as well as scripted fare like "24," "Desperate Housewives" and "American Dreams." Programs have integrated into their sets and story lines such venerable brands as Tide, Crest, Coca-Cola, Sears, Ford, Toyota, Nissan and Campbell's soup.
Despite all this activity, there are no clear estimates yet of the total value of product placements and tie-ins on TV, film or other media. Researcher PQ Media puts the value at $4.2 billion in 2005. However, it says the number of placements actually paid for was about 29% in 2004.
That level of activity is not expected to end anytime soon.
"Film hasn't gotten harder than it has been," says Rob Donnell, president of brand entertainment company Brand Arc, which represents Toyota Motor Sales USA in Los Angeles. "It's that TV's gotten easier" as the networks themselves consider new ways to reach consumers beyond the 30-second spot.
The networks really have no choice. Unilever, for example, believes the future of marketing for its Axe line is "entertainment- and content-based," says Kevin George, director of marketing for the brand. Unilever is focused on creating "content that guys want to seek out rather than push a 30-second ad on them all the time."
Besides producing a video game, Web series and short films for Axe, Unilever has produced an MTV show called "The Gamekillers."
The networks and advertisers have relationships that go back decades, and advertisers aren't ready to cut that cord just yet. Marketers understand how TV works, executives say, because they're already dealing with the networks as advertisers.
"There's a comfort level that exists between advertisers and networks that doesn't exist between them and the film studios," Mr. Donnell says. In addition, TV shows still generate millions of loyal viewers-just look at the 30 million-plus viewers per episode of Fox's "American Idol," with its Coca-Cola tie-in. A product tie-in can run throughout an entire season.
Marketers say TV also has proved more attractive because of its shorter production cycles. An integration can appear in a TV show within weeks or a few months of the show being shot, vs. 18 months for a film.
"It's a challenge that some people can overcome and some people cannot," says Stephanie Sperber, exec VP at Universal Studios Partnerships, the unit specializing in such deals for the NBC Universal-owned studio. "The film production cycle isn't going to change anytime soon. It's all about brands that have bought into the notion that movie entertainment is a powerful marketing tool and can make the early commitment."
The TV networks can't take it easy, however. The movie studios, veterans of product placement deals and other marketer tie-ins, are refining their pitches.
The studios have moved beyond just giving marketers the rights to use film clips in their ads, executives around town say. Moviemakers are now sharing more assets than they have before-including working with stars-and are tagging media with marketing messages. They're also looking at DVD releases as another way to work with marketers.
"We're leveraging our media that will help marketers meet their objectives," says Ms. Sperber, whose company hosts an annual event in May in which it meets with marketers to promote Universal Studios' upcoming films and tie-in opportunities.
Marketers, however, cite as potential drawbacks the often short release window for a film-sometimes in theaters for just six weeks-and not knowing how a DVD might sell months later. Release dates can also shift, affecting the timing of a planned promotional campaign. And then there's the question of how a studio might promote a film, strategy that isn't always shared with a promotional partner.
"All those things contribute more into a riskier environment in an advertiser's perspective," Mr. Donnell says.
But it's not just a struggle for attention between the cinema and TV screen. Marketers now have to consider new ways to spend their nontraditional ad dollars. Distribution outlets for digital entertainment like cellphones, video iPods and broadband video on the Internet are generating interest among advertisers as new venues for branded entertainment.
"No one should get very comfortable," says one network executive. "When it comes to branded entertainment, television's doing very well right now, but that could all change very quickly."