During the TV upfront negotiations, heavyweights General Motors Corp. and Procter & Gamble Co. indicated they will buy fewer commercials during the coming TV season and commit that money to alternate marketing methods, namely branded entertainment. GM spent $3.97 billion last year and P&G was close on its heels with $3.92 billion.
"There's no question we've stepped up our efforts in the area," said Steve Tihanyi, general director-marketing alliances and regional operations at GM, though he declined to discuss specific budgets.
About a month ago, GM set up a team to handle branded entertainment headed by Mr. Tihanyi and made up of reps from the automaker's Hollywood agency, NMA Entertainment & Marketing in Los Angeles; Publicis Groupe's General Motors Planworks, Detroit; Interpublic Group of Cos.' General Motors Mediaworks, Detroit; and RWorks, GM's regional promotions unit.
The group is the gatekeeper for the deluge of incoming offers and ideas. Mr. Tihanyi has said that in routine conference calls the team sifts through all the opportunities and sets strategies. "We have so many brands and there are so many channels we can swim down," he said.
In June, P&G said it will spend about 5% less on commercials on the broadcast networks and commit 25% less of its ad dollars to cable channels. The company spent roughly $2 billion on TV spots in 2004. A spokesman declined to comment on plans for branded entertainment.
What helped P&G's decision was Crest's placement in the second season of NBC's "The Apprentice" last year, which a spokesman for the company's oral care group called "the best money we've ever spent." Matt Barresi, associate marketing director for Crest, said an online contest the brand held in conjunction with "The Apprentice" generated the heaviest single day of traffic ever for a P&G brand Web site, with more than 3 million hits.
But GM and P&G aren't the only companies making a move.
Marketers across all categories are opening up their wallets, including Home Depot, Ford Motor Co., McDonald's Corp., Sears, Roebuck & Co., Toyota Motors USA, Anheuser-Bush and PepsiCo.
Consider the numbers: Product-placement spending will reach a record $4.25 billion this year, a 23% surge over the $3.5 billion spent in 2004, according to research firm PQ Media. It could grow 15% annually through 2009, reaching $6.94 billion, the company said.
Separately, Nielsen Media Research reports that in prime-time hours, brands were spotted 29% more during the broadcast network season that ran from September 2004 to June 2005. That represents 75,975 brand occurrences, up from 58,896 during 2003-2004.
contributing: jean halliday and jack neff