Madison + Vine: Product integrators tackle learning curve

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Watch out for the latest flurry of product-placement deals-many of the marketers and content providers involved are still experiencing growing pains.

Heralded by many as the next big thing in marketing, consumer-product integration into media content such as TV, film and music, many recent deals have gone sour.

That's not to say that some positive results haven't emerged from the chaos. Top-drawer companies-among them Coca-Cola Co., Pepsi-Cola Co., Ford Motor Co., BMW of North America, DaimlerChrysler, Revlon, Taco Bell and Toyota Motors Corp.-have stepped up with a slew of successful product-integration efforts.

But for the most part, marketers have met with varying degrees of difficulty in executing these deals to their satisfaction.

Take, for example, WB's six-episode series "No Boundaries" last February. The eco-challenge show was sponsored by Ford Motor Co. and featured the new Ford Explorer. The vehicle was tastefully integrated, not drawing too much attention to the cars in the show. But despite this care, the results were underwhelming.

"The only boundaries were with the ratings," said one TV executive. The series barely got over a Nielsen Media Research 1.0 household rating for its six airings. What happened?

WB "didn't promote the show," said one TV executive. Some also criticized the program, saying it lacked drama, with none of the bickering and back-stabbing between contestants that has proved a big lure for reality shows such as CBS's "Survivor."

"In terms of overall awareness, it takes an enormous amount of promotion to get a show off the ground," said Lew Echlin, marketing-communications manager of Ford Motor Co.'s Ford Division.

missing the `sweet spot'

Mr. Echlin said AOL Time Warner's WB "definitely" did enough promotion for "No Boundaries." But he added, "I don't think it hit the sweet spot with their customer base." Still, he said, the experience "put us a very long way into a steep learning curve."

"World Beer Games" was a recent effort looking for exposure on rising News Corp. cable network FX. The series, sponsored by Interbrew, which markets small beer brands, Hooter's of Canada, and, was supposed to air in prime time, according to a report in The Wall Street Journal.

But advertisers didn't get much exposure. The show wound up like any other client-supplied infomercial, according to a Fox spokesman, running at 2:30 a.m., in FX's infomercial time block. The spokesman said there was never any intention of airing the show in prime time.

Another effort that fell short was summer whodunnit "Murder In Small Town X," which was to have considerable product placement for Taco Bell and Jeep Liberty in and around the show. But the program ultimately suffered from poor ratings, and an executive close to Fox said that the clients were less than happy. "A lot more was promised but wasn't delivered," the executive said. Jeep Liberty and Taco Bell executives wouldn't comment. Endeavor, the Los Angeles talent agency responsible for selling product placement in the program, had no comment.

Sometimes it's the opposite problem-too much exposure.

Coca-Cola struck a deal with Fox's blockbuster talent-search show "American Idol" that has worked out, but an earlier try did not. The WB overdid it when it placed Coca-Cola in a summer series a few years ago called "Young Americans."

Before the start of the first episode, there was a Coke commercial, followed by the intro of the show, with the title: "The Coca-Cola Summer Premiere: Young Americans." This was followed by the first segment of the episode, which featured a corner gas station with a bunch of old-fashioned Coke coolers in the background. In that same scene, a teen-age guy gives a Coke to a teen-age girl. After that, in the first commercial break, there was another Coke commercial.

"That was something that wasn't directed by us," said Laura Eisen, senior manager of entertainment marketing at Coca-Cola. "That was the look of the show. When you look at the brand in this environment, it took on a different tone that got a lot of criticism. We worked very closely with the WB and the producers to fix that through the course of production." The WB had no comment.

"If people are not careful about how they are going to do this-it's going to become very offensive, and it's going to have the opposite effect of what everyone is trying to accomplish," said Lee Gabler, head of the TV department and co-chairman of Creative Artists Agency, the Los Angeles talent agency, who brokered an integration deal for client Coke with "Idol" on Fox. "If you do the kind of product integration that's been attempted in the recent past-it's going to be rejected quickly."

Many of these product-placement deals have been initiated by the networks with their clients' advertising agencies. But future deals could get a lot more complicated.

A hodgepodge of talent agencies, product-placement companies, promotion agencies, commercial-production houses, movie-trailer shops and even lawyers are jockeying to get a piece of the action.

In a recent deal, for example, a major cable network that was about to launch a big action show made a deal with a car company for a product placement. The producer, apprised of the deal after the fact, was furious.

control issues

"I wanted to control it," said the top executive at the TV production company. "In many cases it's an inducement for the client to spend money they might not otherwise spend."

Striking the deal, the cable network was trying to leverage the lure of product placement to land more traditional TV advertising dollars.

Network and cable executives believe that they, not the producers, should be in charge. "The network should control it," said Jon Nesvig, president-advertising sales for Fox Broadcasting Co. "That's the network's right."

Since the network controls TV-commercial money, network executives believe product-placement deals should be in their domain. Mr. Nesvig said the network should control these negotiations to help construct an overall integrated-marketing deal.

In spite of this, network executives aren't necessarily pushing for more product placement; many don't pin a lot of hope on significant revenue from it. No one expects these deals to even slightly dent the $30 billion that is spent on TV commercials each year.

"Product placement is fairly dangerous if it's used for other than a reward for sponsorship dollars," said Joe Abruzzese, outgoing president-advertising sales for Viacom's CBS Television Network. "We'll give product placement to a client who has an exclusive to a property where it fits-say, `Survivor."'

In "Survivor," CBS did a placement deal with General Motors' Pontiac Aztek as part of an exclusive media agreement for the automaker, "so we are not denying any revenue from Toyota or Ford [in other shows]," said Mr. Abruzzese. "Those car manufacturers can't buy [in that show] anyway. It's a reward for a $12 million placement of advertising."

In CBS's case, a number of other marketers were featured on "Survivor," including Reebok, Target and GM. Target Stores had a canopy featuring the store's name. Contestants walked around in Reebok T-shirts.

Product-placement pacts can take many shapes. Some are rewards for extensive media buys (as in CBS's case). Some have a separate price tag with the TV production company of up to $1 million for a network reality series. Still others may cost $50,000 an episode-typically, a TV producer may guarantee at least one to three "visuals' per series or per episode.

But in some deals, product placement is getting deeper into the content. For another series, ABC's "Who Wants To Be A Millionaire," the network worked AT&T's name directly into the show. When a contestant needs to call a friend for help with a question, host Regis Philbin says, "Let's go to our friends at AT&T." This was also tied to a media buy on the show.

Equally unsubtle is Coca-Cola's link with "Idol." This summer, Coke, with CAA's help, got involved with the show, and it has reupped for the second season beginning in January.

In its first outing, Coke had its logo-ed beverage cups in front of the three judges, had the traditional green room renamed the "Coca-Cola Red Room" and received the benefit of special taped segments, labeled "Coca-Cola Moments." Before one commercial break on a recent episode, one of the hosts said, "But first, I want to get a Coke."

"We are fortunate to have products that work naturally," said David Rains, managing director-integrated communications at Coca-Cola. "It's not a stretch to be there. Our brands are entertainment brands that fit into the environment."

Ford also has a stake in the show, as contestants drive around in its Focus cars (as well as wash them). The model is aimed at young buyers. Ford got five to six dozen :30 spots for "Idol's" entire run 16-week run. Ford has also signed on for the second season.

Getting real

Coca-Cola and Ford got in on the ground floor with "American Idol." In seeking a third major sponsor, Fox is asking $26 million, a higher price than Coca-Cola and Ford were said to have paid.

Product-integration activities as part of overall marketing pacts with TV programmers are no doubt on the rise. "We certainly were looking to do more marketing deals, and we were successful in negotiating those elements into our upfront," said Marc Goldstein, president-chief operating officer of WPP Group's MindShare USA, New York.

Growing product-placement/integration deals are linked to the rise of reality-based programming, which has more natural tie-ins with the "real" world.

Besides CBS's "Survivor," the network made product placement a regular feature of its "Big Brother" series, as well as for the second year of its "Amazing Race." Also for this season, Walt Disney Co.'s ABC sold its dramatic hour, "Push, Nevada," to Toyota Motor Sales USA and Sprint as part of product-placement deals, only to see the show canceled when its 13-episode commitment shortened to seven episodes.

Product placement has been around for years, but companies using it now have a new objective: Sink a product's message deeper into the content-so-called "plot" placement.

A few years ago, Twentieth Century Fox's "Cast Away" did just this, when Tom Hanks played a FedEx executive as a central part of the story line in the theatrical movie. More recently, ABC daytime soap "All My Children" struck a deal with Revlon, working the cosmetics company's line into the story line as an arch competitor of the company run by Susan Lucci's Erica Kane character.

Product integration is a subset of client-supplied programming, ranging from infomercials to weekend sports programming "time buys" to even some prime-time fare.

In the late `80s and early `90s, there was much talk of major consumer-product companies owning programming like they did in the `50s. But that movement-apart from Procter & Gamble Co., which owns network daytime soaps, as well as equity interests in WB's "Sabrina, the Teenage Witch" and CBS's "King of Queens"-hasn't spread to many other companies.

The reason is risk. Network advertisers aren't accustomed to spending big on TV shows only to see them fail. That's why advertisers buy commercials: Their investment is guaranteed with specific viewership.

low risk

Product placement is a nice lower-risk entry point. "There are ranges of success," said Ira Bernstein, president of Lions Gate Television. "It is much more narrow in the world of product integration than in client-supplied programming."

That's because, more often than not, TV shows fail. But in a limited product-placement deal there always is some value.

"Maybe if a [national advertiser] knows a show was going to do terrible ratings they wouldn't have produced it [for big production dollars]," said Mr. Bernstein. "But the company would have done it for only $50,000 [as a product-placement deal] in which case, it's good value."

TV is a natural territory for marketers. But the music industry is also alluring. For instance, in releasing Sheryl Crow's latest album, "C'mon C'mon," Bertelsmann's Music Group's Interscope Records struck a deal with American Express, using Ms. Crow's single "Soak Up the Sun" for a TV commercial.

But there are concerns, especially with some labels looking to put consumer products into videos or songs, that placement can go too far.

Further complicating the media-marketing landscape is TiVo and other personal video recorders, which allow users to skip commercials. One media agency executive says it's too early to tell how people will use TiVo in future years. TiVo says it currently has about 1 million users. But one scary study for TV advertisers shows more than 70% of people who own TiVo fast forward through ads.

Overall, executives believe marketing plans will see an increase in all kinds of product-integration deals in future years, all due to a still-growing plethora of media options, ratings erosion and possibly new digital technology like TiVo. But some traditions won't change that soon.

"You are still going to have the workhorse media-and that's still the 30-second spot-for a while," said Coca-Cola's Mr. Rains. "But product placement is a good insurance policy."

contributing: jean halliday

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