Meredith has allowed similar placements at a CBS affiliate it owns in Atlanta, said Paul Karpowicz, president of the Broadcast Group at Meredith Corp., which owns the station. Other stations hold the line against such stuff, but have found other ways to weave marketers into select broadcasts. KCPQ, a Seattle Fox affiliate owned by Tribune Co., has in the past let McDonald's place logos against certain onscreen elements. Fox's WFLD in Chicago has a man-on-the-street segment in its "Good Day Chicago" program called "Breakfast Buzz," which is sponsored by McDonald's and shot in front of one of the chain's outlets, said Judson Beck, VP-general sales manager, Fox Chicago. The chain's logo is on screen during the segment and viewers are told afterwards that McDonald's was the sponsor, he said.
"Advertisers look at it as an opportunity to have some visibility on their product and not get caught up in a traditional commercial break," said Mr. Karpowicz.
Will marketers -- or more important, viewers -- look at the technique as crossing a line? It's one thing for Ford Motor Co. to pay for prominent appearances in programs such as "24" or "Knight Rider," where the stories are fictional and journalism is the furthest thing from any viewer's mind. But it's quite another to insert advertisers' wares into programs where serious, unbiased coverage of any number of topics is supposedly the hook that gets people to watch. The coffee cups in Las Vegas, first reported by The Las Vegas Sun, are also a signal that marketers are moving from overt promotions to more subtle ones that usually involve public relations and guerrilla marketing, and are willing to live with the risk that viewers might find the practices duplicitous or offensive.
"Despite station managers' promises that accepting paid product placements won't affect their station's news coverage, I think it most likely will, in time," said William Madway, professor of marketing at the Villanova University School of Business in Philadelphia. "And even if they do hold the line, it will undoubtedly affect the public's perception of the independence and integrity of TV and radio newscasts, and that would be a disaster for viewership or listenership."
Indeed, news programming can be a veritable minefield. "As you enter the news-program world, the line between what is news and what is promotion has always been a little more clear. And as we see more and more of these things it's going to be important that producers of these shows are transparent about what is an endorsement and what's actually news," said Fred Cook, CEO of Interpublic Group's GolinHarris, which works for McDonald's but had no role in the coffee placement.
Nonetheless, he says paid placement outside of entertainment shows is a growing trend. "It's not uncommon these days to be asked to pay for a placement on a talk show. Those used to be done in exchange for the product, but now there are often fees associated with it because the programs are trying to create new revenue streams."
Then there's the question of how effective such below-the-radar placement can be. "I guess if you have a cup of McDonald's sitting in front of you it's a subtle endorsement. It's like a billboard but I'm not so sure what the ROI is given the expense," said Margi Booth, president, M Booth & Associates. "If I had my druthers I'd much rather go with: spend the money to get a spokesperson or product on when there's something to say about it. That's much more valuable."
Both business and news executives see where product placement in news programs could go too far. Steve Kraycik bristles at the idea of letting a potential subject of coverage entrench itself too deeply into a news broadcast. "You want to maintain a separation between paid advertising and news product as much as possible to retain your credibility," said Mr. Kraycik, KCPQ's news director. "That newscast needs to remain pure," agreed Chicago's Mr. Beck.
Whether consumers care enough about intrusions into space usually considered sacrosanct is a matter for debate. In a survey of about 800 respondents conducted by two Iowa State University professors, traditional product placement was generally considered acceptable, with people saying they knew it when they saw it. Negative reaction rose 30%, however, when viewers perceived products onscreen were designed to sell something, said Jay Newell, a professor of advertising at the university.
The separation of news and ads is an idea that TV executives arrived at over time, and the line has been crossed depending on the type of newscast being broadcast. In the early days of TV, when entire programs were often owned or sponsored by a single marketing entity, NBC's nightly news program was known as the Camel News Caravan and backed by the cigarette maker. More recently, advertisers have paid to have radio hosts talk about products on air in the belief that it sounds more enticing and relevant than a stock 30-second commercial. "There are tasteful ways to do it," said MJ Keehn, partner-media director at WPP Group's Cole & Weber/United. "We're not talking about turning Tom Brokaw or Katie Couric into Billy Mays selling OxiClean."
Much of this new push is driven by economics. Network newscasts have steadily lost viewers for years, and morning-news shows have become more focused on lifestyle and celebrity than on the serious news of the day. In a sign of the pressure on the formats, CBS's "60 Minutes," NBC's "NBC Nightly News" and ABC's "ABC World News" have all in the last few years let advertisers such as Philips Electronics and Pfizer sponsor entire broadcasts in exchange for running fewer ads, with more time for news segments.
Marketers, too, have their reasons: Broadcast TV is snaring fewer viewers, who have more power than ever to skip past a 30-second ad.
It's no surprise that some rules have begun to form. At KVVU, the McDonald's placement is disclosed by an on-air announcement as well as on-screen graphics, Mr. Karpowicz said. And the company wouldn't allow such stuff on more serious newscasts, including its evening and late news shows. Should a story about McDonald's or the fast-food industry come up when the chain's coffee is on screen, he said, the station would cover it "vigorously and aggressively." What about the coffee? It'd be taken "off the set, just as we remove the commercials for airlines" when an air disaster strikes.
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Contributing: Michael Bush