Putting Down Stakes With Magna

Brands become producers

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%%STORYIMAGE_RIGHT%% As advertisers enter the branded entertainment space, the power players brokering the deals are all trying to stand out from the pack.

Magna Global Entertainment, New York, is attempting to differentiate itself by building original TV programming for its clients from the ground up. Unlike most of its Madison Avenue competitors, Magna is committed to delivering clients more than just product integration and sponsorship packages built around a media buy.

Magna's business model includes scoping projects, securing the financing—Magna gets compensated when the media runs—, script development, snaring the talent and arranging for distribution. Magna, a unit of Interpublic Group of Cos.' Magna USA, has access to IPG's diverse client roster which includes American Express, Coke, Coors, General Motors, Johnson & Johnson and L'Oreal.

Magna's hybrid model owes itself to the backgrounds of its executives and team of writers and producers. Robert Riesenberg, Magna's director, is steeped in both the TV and advertising/media worlds, and Tracy Dorsey, VP and associate director, has been both a producer and writer at ABC News and for feature films, overseeing all aspects of the creative process.

"We speak both languages [TV and advertising] fluently," Riesenberg says. That expertise has influenced his belief, formed from long experience in both businesses, that advertisers don't really want to become producers but are open to opening up their pocketbooks if there is a strategic fit.

The company has scored on a number of fronts—it produced two TV movies with Johnson & Johnson and Turner, one of which ("Door-to-Door" with William H. Macy) won several prestigious awards; a Dixie Chicks concert in the fall of 2002 with Circuit City; and a comedy special honoring the 40th anniversary of The Improv with Diet Coke.

With the notable exceptions of players like Guy McCarter at OMD Entertainment and Laura Caraccioli-Davis of SMG Entertainment, most of Riesenberg's agency competition is not focused on creating original TV programming as much as it is in building strategic alliances where the company brings an advertiser to a network as a promotional partner.

%%PULLQUOTE_LEFT%% The financing chain works to ensure advertisers the best return on investment. For example, Magna will work with U.S. production companies that have a presence in Toronto or Vancouver with their favorable exchange rates and tax credits for hiring a certain percentage of Canadians. The advertiser and the Canadian production partner essentially offer financing in exchange for distribution rights.

"We piece together financing so that the advertiser's contribution is such that they can count on a fair return on their investment from a media perspective. It's not unlike any producer who's trying to get financing for their projects—they're using whatever is at their disposal whether it's co-production deals or pre-sold distribution," Riesenberg explains, adding "We're not reinventing the wheel in any way, we're just taking advantage of the wheel which requires an understanding of the marketplace."

A sophisticated understanding, to be sure. Take the case of animated TV programming. An advertiser may only have to put up a quarter of what it might otherwise have to commit to regular TV, because the global market for animation is so strong that the distributor or studio partner is likely to put up the rest.

Magna works with independent producers like Mark Burnett of "Survivor" fame rather than Hollywood studios. An original series for NBC called "The Restaurant" is now in production and set to air July 20 with American Express, Coors and Mitsubishi.

While these advertisers are woven into the script, they'll also have commercials in the show and billboards. In addition, they'll have the marketing rights to the show, which enables them to promote their association in other media, collateral or merchandising.

"House Rules," a 13-part reality series with Lowe's Home Improvement Center on Turner's TBS, is also in production, while J&J plans two more TV movies this year in its multi-year, two-pictures a year deal.

The scripted series realm, which can encompass a 22-episode arc, is less feasible for advertiers. "With six episodes, there is less out of pocket expense and less ad units a client would have to support," says Dorsey.

"We are looking at doing things that are radical but only in the sense that they redefine how an advertiser gets their message across without the use of commercials," Riesenberg says.

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