|Latest control units for TiVo systems.
'How much risk?'
"It all comes down to how much risk do you want to take with your brand," Bruce Redditt, executive vice president of Omnicom Group, said of so-called Madison & Vine, or product placement, deals.
In addition to Mr. Redditt, the Ad Age Madison & Vine panel included Lee Stimmel, vice president of marketing and product development for Atlantic Records; Roger Fishman, a senior executive at Creative Artists Agency who has engineered high-profile entertainment programs for Coca-Cola Co., Motorola and Nextel; and Kimber Sterling, director of advertising research sales for TiVo.
Music labels are increasingly involved in product placement deals, though some would argue that they have little choice as illegal file-sharing and downloading services have severely eroded revenues. "It's the Wild West for the music business right now," Mr. Stimmel said.
'Adopt' a music artist
"Hey, five years ago CEOs [at marketers] never met with us. ... We need to have new ways to drive revenue other than CD sales," Mr. Stimmel said, acknowledging that discussions are under way whereby marketers could be provided with incentives if they "adopt" an artist.
Such an idea isn't so far out. Evolving digital satellite and cable delivery systems, personal video recorders such as TiVo and other new media forms are increasingly requiring Madison & Vine players to think more creatively as they strategize deals with marketers. Digital video recorder (DVR) technology can offer return on investment metrics. TiVo, for example, offers a complete feedback loop to marketers participating in the company's branded entertainment "showcases," a format designed specifically for long-form video with brand messaging. Marketers can capture consumer profile data, something that can help prove return on investment as well as offering key business intelligence.
With the rise of TiVo and video-on-demand, it's anyone's guess how the major TV networks will respond.
'With or without TiVo'
"I don't think anyone knows how the networks will work with digital video recorders and how we will work with them," Mr. Sterling said. TiVo has had conversations with Viacom's president and chief operating officer, Mel Karmazin, among others. "We're trying to make sure we're not working against them. ... What's going to happen in the DVR space is going to happen with or without TiVo," Mr. Sterling said.
"The next three to four TV programming seasons are going to be very interesting," observed Mr. Redditt, citing a fierce battle taking shape between digital cable and satellite providers for subscribers that is likely to cannibalize advertising. Cable providers such as AOL Time Warner's Time Warner Cable are also developing their own DVR technology within the cable set-top box that is expected to yield new advertising revenue models.
As the economics for scripted TV programs evolve, advertising is more likely to support news, sports and reality programming, while scripted shows may shift into a for-pay subscription or a video-on-demand model, Mr. Redditt said. In any case, ad agencies, marketers, studios and music labels will need to rise to the challenge of creating new forms of branded content.
Audience, media fragmentation and clutter are a challenge for marketers, especially those implementing branded entertainment programs. "It puts the onus on all of us to find new ways to reach people and no one agency can have all the answers," CAA's Mr. Fishman said. "The risk is the status quo, staying in the same place," and to help marketers "sell more incrementally, faster."
"The clients are agnostic about where the great idea comes from -- they don't care where it comes from, they just want the great idea," Mr. Redditt said.