So far, cable networks heavy on sports programming are breaking the most new ground in creative sponsorships, but even A&E Television Networks is getting into the act with its first-ever product placement deal, involving Ford Motor Co.'s Jaguar and the History Channel this summer. The A&E cable channel also is exploring ways to bring sponsors into its "Biography" series.
Some industry observers have suggested that advertisers and networks are scrambling to integrate commercial messages into programming to blunt the effect of sophisticated replay devices, like TiVo, that allow consumers to skip over commercials more easily. But cable TV programmers hotly dispute that notion.
"People have had the ability to skip over commercials for years with videocassette players, but people haven't changed their viewing habits and behavior because of that," says Roger Williams, president-CEO of Outdoor Life Network.
Nevertheless, a growing number of cable networks are aggressively exploring ways of integrating sponsors' messages directly into programming as part of more complex media packages that also include-naturally-traditional 30-second commercials.
"We started approaching advertisers with ideas for more creative approaches for using sponsors' messages in our programming, and now advertisers are coming to us with ideas," says Guy Sousa, exec VP of News Corp.'s Fox Sports Net.
Since Fox launched "Best Damn Sports Show, Period" last summer, the program has become a laboratory for new sponsorship efforts, including converting the talk show's studio into a lemonade stand to promote Mark Anthony Brands' Mike's Hard Lemonade, with hosts Tom Arnold and Chris Rose inserting mentions of the malternative beverage in their sports banter. A similar deal turned the set into a Quizno's sandwich shop.
In another product promotion within the program, Levi Strauss & Co.'s Dockers pants were described on the show as "stainproof" and used as comedy material in the talk show. The Dockers jokes may have appeared to be spontaneous, but they actually were part of a media buy, says Mr. Sousa.
"We're integrating brand names into the show, but we make sure that whatever product we're talking about works with the show and enhances the entertainment, instead of blatantly touting products," he says.
Advertisers opting for in-program sponsorship appearances agree to let go of control over how brand names will be used in the freewheeling program. "It's a bit of a risk, and not all advertisers are willing to do it," says Mr. Sousa.
The cable TV industry has been bolder than the broadcast networks in pioneering new sponsorship formats within programming, and will likely open the doors to more network flexibility with product placement, says Laura Caraccioli-Davis, VP-director of Bcom3 Group's Starcom Entertainment, Chicago.
"But product placement carries its own risks," she warns, "and if viewers begin to doubt the integrity of a network because of gratuitous uses of product placement, it will be hard to backpedal."
Cable networks insist their product placement capers are rigorously aligned with their programming standards to ensure entertainment value and integrity.
"Everything we do is handled by producers, and they will reject an idea that doesn't make the show genuinely more entertaining," says Fox Sports Net's Mr. Sousa.
Viewers' demands for more information about sports equipment led to Outdoor Life Network's latest product placement program, says John West, the network's senior VP-advertising sales. Trek Bicycle Corp. next month will sponsor a 30-minute program about its bikes, ridden by 2001 Tour de France winner Lance Armstrong, as part of an overall media buy surrounding the three-week race, to be covered by OLN.
"Viewers are very interested in learning more about specific equipment, so we created a program about these bicycles in cooperation with Trek," Mr. West says.
Also, this year for the first time OLN is allowing advertisers to sponsor commercial-free, 30-minute segments of the Tour de France. Ford's Lincoln brand will sponsor 36 hours of commercial-free coverage. In return, the carmaker will receive in-program mentions and on-screen plugs. Lincoln also is traveling new roads on the broadcast side through a deal with General Electric Co.'s NBC. Lincoln cars will be featured on-stage during concert segments on "The Tonight Show With Jay Leno."
Walt Disney Co.'s ESPN is experimenting with new roles for sponsors too, says Ed Erhardt, president of customer marketing and sales for ESPN/ABC Sports.
"Advertisers and agencies want to weave themselves into programming in a variety of ways, and advertisers are taking a bigger role in driving this," he says. Examples include "The Life," a behind-scenes ESPN show sponsored by Coca-Cola Co.'s Sprite and which has included product placement.
"We've had some success with Sprite appearing as both presenting sponsor and in the programming for `The Life,' and we're talking to other sponsors about appropriate examples that fit," says Mr. Erhardt.