QUESTIONS FOLLOW THE FIRM'S DEAL WITH ZENITHOPTIMEDIA

Who Will Broker Branded Entertainment Deals for Media Buyer's Clients?

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LOS ANGELES -- The branded entertainment biz is booming. More advertisers than ever are buddying up to Hollywood as a way to reach consumers with their marketing messages.

But is the obsession with content leading to some questionable deal making?
The Firm's chairman Rich Frank will work single-handedly with ZenithOptimedia. “I’m taking the lead,” he said.



Last week’s pact between Hollywood management company The Firm and Madison Avenue’s ZenithOptimedia Group marked just the latest attempt by a media buyer to gain entry into the branded entertainment space and create opportunities for its stable of high-profile clients that includes Verizon Wireless, Toyota, General Mills, Nestle, L’Oreal, JP Morgan Chase and Hewlett-Packard.

But it raised some eyebrows.

Already successful players

That’s because many of ZenithOptimedia’s clients are already successful players in the branded entertainment space, and already have several companies in Hollywood and on Madison Avenue brokering such deals for them.

For example, HP has Los Angeles-based Davie-Brown Entertainment brokering its product placement and integration deals, including appearances in Bravo’s Project Greenlight and MTV’s That ‘70s House. The company also has an ongoing relationship with DreamWorks Animation.

Similarly, Verizon Wireless works with New York-based AIM Productions, and was recently integrated into Mark Burnett’s Rock Star: INXS on CBS, while Procter & Gamble has retained Creative Artists Agency and Grey’s Alliance for multiple deals, and has worked with Madison Road Entertainment on integrations within Mr. Burnett’s The Apprentice on NBC. Toyota-based Scion works with Los Angeles outfit Inform Ventures.

Some advertisers argue that good ideas can come from anyone at any company, so having multiple shops developing concepts for a single brand can help the marketer in the long run.

That kind of relationship can only work if all parties act collegially, which is often easier said than done.

“That’s the tough part because people tend to compete and want to take credit for ideas so they can justify themselves to the client,” said an executive at a shop that has already been identifying entertainment opportunities for a Zenith client. “If there’s cooperation, it can work.”

Such a strategy can also open more doors for a marketer, considering that one company may have contacts or relationships that another may not have.

Adding confusion to the marketplace

Yet at the same time, that more-is-more strategy could confuse a marketplace that’s already tough to navigate. Finding the right person to say yes to a project can be difficult. Getting that person to say yes is even harder. Add in multiple yes-men -– a number of people, both inside and outside the brands, charged with doing the same job –- and you’ve got the reason why most branded entertainment deals never materialize.

Some clients don’t seem to be worried.

A Verizon spokesman said the company has no problem with the Zenith move. "Zenith had done a lot of product placement for us and this addition strengthens their capabilities," he said. Most recently, Zenith brokered a deal to integrate Verizon’s DSL service into an episode of ABC’s Extreme Makeover: Home Edition.

But why The Firm?

Relatively little experience

The company has relatively little experience brokering branded entertainment deals. Its executives worked on the relaunch of Virgin Cola, which hasn’t taken off with consumers, and partly owns niche sportswear brand Pony.

The Firm also bartered the deal to embed Zenith client Toyota into the Mark Burnett reality show The Contender. Toyota paid some $16 million in ad buys and integration fees, reportedly the highest ever for such a deal, which included placement in the content and off-air promotions. The show fared poorly in the ratings after costing NBC a record $2 million per episode.

Executives at ZenithOptimedia could have been starstruck when making the deal with The Firm.

The Firm is known for promoting the fact that it reps such megastars as Leonardo DiCaprio, Cameron Diaz, Vin Diesel and Jennifer Lopez, as well as high-profile music artists like Snoop Dogg, Linkin Park, Audioslave and Weezer.

But the deal also suggests that ZenithOptimedia understands its place in the world.

It’s a Hollywood outsider, and instead of forming its own in-house entertainment division -- the way Carat and Initiative have done -– it opted to farm out those duties to companies already working in the heart of Hollywood.

Zenith’s executives said they want an earlier look at projects in Hollywood’s development pipeline and believe The Firm could provide that for them.

Rich Frank

One reason is The Firm’s chairman Rich Frank. A seasoned Hollywood TV executive who was chairman of Walt Disney Television & Telecommunications as well as Disney’s syndication arm, and president of Walt Disney Studios, is well-respected in the creative community and has a Rolodex of heavy hitters that few can boast.

Another reason: Rich Hamilton, ZenithOptimedia’s North American CEO has known Mr. Frank for more than a dozen years, and Zenith executive Peggy Green has a 30-year working relationship with Mr. Frank.

“We have a vision of trying to do things together to help clients move forward in the area of branded entertainment,” Mr. Hamilton said. “We think there’s no one better to help us do that than Rich Frank.”

A lot is riding on Mr. Frank.

In an unusual move, Mr. Frank will be working single-handedly on the Zenith deal, without a team of other managers. “I’m taking the lead,” he said.

Mr. Frank will focus on TV shows for Zenith’s clients, mainly scouting for projects in development for places to embed the brands, rather than designing projects from the ground up for the marketers. Mr. Frank will also look for film, music, Internet and wireless opportunities.

Providing access to Hollywood

Mr. Frank said The Firm “hasn’t been hired to replace” other companies that are developing branded entertainment deals for Zenith’s client roster, but “we’re here to provide access to the Hollywood community. We’ll talk to the creative community in Hollywood and match their projects with brand priorities.”

Either way, The Firm will have a lot to gain from its pact with Zenith.

In addition to its pre-existing relationships with Toyota, Pony and Virgin Cola, The Firm will now be able to tout ZenithOptimedia’s client roster as its own.

That will help establish the company as a major player in Hollywood when it comes to its corporate ties and puts it in direct competition with the major talent agencies in town who boast their own stable of brands. Creative Artists Agency has Coca-Cola, Starwood Hotels & Resorts, Abercrombie & Fitch, Hollister, Hasbro, Procter & Gamble, Nextel and Boost Mobile; the William Morris Agency reps Anheuser-Busch, General Motors, Pfizer, Hilton Hotels, Saks Fifth Avenue, Texas Instruments, Lending Tree and Dennis Publishing; Endeavor works with Time Inc., Mattel, American Express and Martha Stewart Living Optimedia.

The deal will also add more cash to The Firm’s coffers.

Open-ended deal

The new partners wouldn’t discuss the financial terms of the deal, though The Firm will collect a retainer during the time the two companies work together. The duration of the deal wasn’t specified. Mr. Frank characterized it as “open ended,” which means it could last for months or years or end at any time.

The deal is not exclusive, though Mr. Frank said he would not solicit competitors in the categories that Zenith represents. Zenith clients, however, are free to continue or cultivate relationships with any number of brand integration firms, though Mr. Hamilton said he’s “hopeful that we can convince as many of our clients as possible that the partnership between The Firm and Zenith is the best way to pursue branded entertainment opportunities.”

They’ll have a lot of persuading to do.

~ ~ ~

Alice Cuneo, Jean Halliday and Jack Neff contributed to this report.
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