MERGER OF ADVERTISING AND CONTENT WORRIES CONSUMERS

New Survey Explores Feelings About Product Placement

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NEW YORK (AdAge.com) -- Seventy-five percent of U.S. consumers believe that the intrusion of advertising into TV and movie content has increased over the past year -- and many find it a
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distraction, according to an exclusive Advertising Age survey.

The online poll, conducted by WPP Group's Lightspeed Research, found that consumers of all ages felt that the line between advertising and TV programs had become increasingly fuzzy.

The result of the survey might surprise advertisers ramping up product-integration initiatives as new technologies such as TiVo and other personal-video recorders make it easier for viewers to zap traditional 30-second spots.

Too pervasive
When consumers were asked whether they found product placement and integration and other new genres, such as online ad films, entertaining or distracting, 62% said they were distracting, with only 38% finding them entertaining. In a separate question, the majority, 72%, said the new genre was too pervasive, though consumers in the prime advertiser demographic of ages 18 to 34, were receptive: 46% of that group find it entertaining and 35% say it's not pervasive enough.

"It's gratifying that consumers understand that advertising and editorial [are] merging," said Jeff Chester, executive director at the Center for Digital Democracy. "The Chinese walls are being obliterated. The survey is an indication that there is fertile ground for directing consumer anger and getting the industry to clean up its act and be more vigilant about the relationships."

However, respondents to the online poll were almost evenly split about whether advertisers' efforts to influence content was a good or bad thing. Fifty-two percent -- a majority -- thought it was something that should cause worry; 48% did not.

'Majority are concerned'
Even so, Mr. Chester said, "in this sophisticated ad environment you'd expect most people to say, 'What else is new,' but 52% is a very big number. This shows the majority are concerned about it. This will give us ammunition to be more bold in our criticism."

The Center for Digital Democracy was formed to encourage noncommercial and public interest programming. Mr. Chester said the group will focus its fire on food advertising directed at children in 2003.

The timing of the survey may have something to do with the responses of the 500 participants. It was conducted between Dec. 5-9, just weeks after the huge box office opening of the latest James Bond franchise, Die Another Day. Ford and Revlon's tie-ins with the movie attracted acres of press attention in the weeks leading up to its Nov. 22 release.

Patti Ganguzza, president of New York-based AIM Productions, said neither advertisers nor movie studios held as much power as actors,

who routinely veto products they don't like or wouldn't wear.

'Defenses are down'
Ms. Ganguzza, who placed Post's Honeycomb Cereal in The Sopranos, said consumers were no doubt more aware of product placement and integration because more and more advertisers are opting to do it. "Consumers dislike it because their defenses are down when they're following a storyline," she said. "They're not sifting through placements." (HBO, however, said it does not accept product placement.)

Recognizing that too many placements are a turnoff for viewers, Ms. Ganguzza added, "I would never want the product placement industry to turn a sitcom into a tattoo parlor."

As for PVR penetration, it was low among survey respondents, with only 3% reporting they had TiVo or ReplayTV. But 63% of TiVo owners reported they skip commercials all the time, as did 50% of Replay owners.

Shift toward Internet
The survey of 500 participants was conducted Dec. 5-9 and has a margin of error of 4.4%. It was commissioned with the intention of pinning down shifts in media consumption over the past year, and it found more people are giving network news a pass and instead using the Web as their primary source of news and information. The number of people citing the Internet as the first place they turn to for news has almost doubled over the past year, from 9% to 16%.

Only 31% of respondents cited network news as their primary news source, compared with 36% last year. The changes were most dramatic among those in the 18 to 34 category, which showed a 10% drop within the past 12 months. Only 36% in this age category continued to cite the network news as their primary news source.

Steve Marks, Lightspeed's national account director, said, "I think people are turning to the Web more because it is more pervasive than a year ago; people are surrounded by PCs and laptops. They're in an online environment more."

However, Mr. Marks doesn't think that network news is dead. He predicts the Web will continue to grow as a primary news source, but will not break the 20% barrier any time soon.

Less cable news
Respondents in the 35 to 44 age group are using cable TV less as a news source than a year ago (22% vs. 26%), although those age 18 to 34, 45 to 54 and 55-plus all said they are turning to cable TV more for news. Newspapers showed declines among all respondents except those in the 35 to 44 age group, who reported a 2% increase in them as a primary news source.

More than half (52%) of respondents said they are spending the same amount of time reading magazines as a year ago; 14% said they are spending more time reading magazines and 34% were spending less time with titles.

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