A newfound trust is emerging among production companies, cable channels and advertisers, plus their various agents. Product placement has always existed on TV, but six years ago, when the current resurgence began, most advertisers sought little more than an on-screen logo, a mention in the script or the flash of a car interior.
A more respectable profession
Now that the profession has grown in stature and respectability, cable channels and their marketing partners are engaged in much more sophisticated partnerships. Some, such as MTV, have woven shows around brands -- for example, "The Gamekillers" for Unilever's Axe body spray. The logo slapping has given way to an ability by marketers to hold back in favor of subtler tactics in placement, in the wider interests of improving engagement from TV show to commercial pod.
One-off deals have been replaced with complete commitments to TV concepts from birth. Marketer support ranges from backing premiere event parties to producing behind-the-scenes webisodes destined for both a cable channel and a brand's website. The future appears to hold even more promise. Coming soon: series production costs paid for entirely by marketers, which will collaborate with programmers like never before.
"My conversations have gone through an arc, from 'I've got to get my brand in a show' to what we're seeing now: series-long partnerships" that involve many multiplatform elements, says Kevin McAuliffe, VP-branded entertainment for NBC Universal's cable assets, which include Bravo, USA Network, Sci-Fi Channel and now Oxygen.
Mr. McAuliffe has worked on deals for Bravo reality series, such as pairing "Top Chef" with package-goods brand Glad and "Project Runway" with the likes of discount fashion e-tailer Bluefly, L'Oréal Paris and Alberto-Culver Co. hair-care brand Tresemme. He's discussing an option for unnamed marketers to underwrite all the production costs for future shows, a first even for Mr. McAuliffe, a branded-fare veteran.
The move toward commercial ratings has sparked an interest in engagement metrics, which appear to show that branded-entertainment tie-ins coupled with media commitments are the most effective form of advertising.
Bravo's reality shows are clearly working. Eight of the 10 most-recalled ad-supported brand integrations on cable were on Bravo shows. Topping the list was Bluefly and "Project Runway," according to IAG Research data from January through November. Mr. McAuliffe says metrics from third parties such as IAG and Nielsen have played a role in legitimizing branded entertainment and bringing more risk-averse advertisers aboard.
Cable long has been the place for marketers to test the boundaries of what's possible in the branded-entertainment realm, its flexibility the result of an ongoing inability to match broadcast pricing eyeball for eyeball. Now, thanks to some cable channels' poor standing in commercial ratings relative to broadcast networks, deals might be getting even better.
MTV, which loses 13% to 15% of its audience during breaks compared with an average 8% to 10% for broadcast as a result of a ratings-currency switch, is already pulling out all the stops for advertisers. MTV created "It's a Mall World" for American Eagle Outfitters and helped Procter & Gamble Co.'s Herbal Essences connect with the "Video Music Awards."
Cable deals have been a lot more flexible than broadcast networks' and are able to incorporate brands much more easily into their environments, says Brian Terkelsen, exec VP-managing director of MediaVest branded-entertainment unit Connectivetissue. "You see TBS doing branded things at the bottom of the screen," he says. "You see things done in cable first much more."
"Cable is definitely more flexible than broadcast, but broadcast is changing," says Lisa Herdman, VP-associate director of network programming at RPA, Santa Monica, Calif. "It's less about what cable is flat-out offering but what they're open to do [with] the relationship with the production companies." RPA is working with HGTV on a series of interstitials, or programming shorts, for La-Z-Boy that show a couple furniture shopping and with TNT to partner Honda's Acura with a micro-series backing an upcoming movie, "Blank Slate."
While marketers are generally quick to leap on such leverage points as poor commercial ratings, industry players say advertisers aren't nearly so demanding as they once were and there's a general realization that viewers will disappear if the come-on is too strong.
"The business has become far less led by transaction," says John Shea, exec VP-integrated marketing and brand partnerships at MTV Networks Music and Logo Group. "It is one that is idea-led, and then the transaction follows. 'Innovation' is the word of the year."
Mr. Shea says there's a "perfect storm of self-interest" going on. Historically, each party -- advertisers, their agents and the cable channels -- has been driven by self-interest, but the "collective interest is now in creating something new."
Boost in ad revenue
Branded entertainment also has been a booster for cable coffers. Rainbow Media cable network IFC has seen a leap in revenue, even though it runs 10 "program breaks" a day compared with a typical cable channel, which might air up to 130.
"We don't do product placement; we build content for partners," says Evan Shapiro, general manager at IFC. Acura has had a prominent on-air presence in a series of short films airing under the banner "At the IFC Center."
IFC has made a much more aggressive push in the branded-entertainment arena since the arrival of Mr. Shapiro in 2004 as senior VP-marketing and has seen a 600% increase in sponsorship revenue as a result. "We're approaching the mid-eight figures," Mr. Shapiro says, adding that advertisers are offered built-in research so they can see the changes in consumer attitudes before and after their IFC sponsorships.
Mr. McAuliffe says branded entertainment is far from reaching its peak, adding that demand outstrips supply. To give some idea of how cable stacks up against broadcast, IAG measured 17,908 in-program placements on the five most placement-active cable channels vs. 12,740 on the five broadcast networks (for the prime-time hours of 8 p.m. to 11 p.m. during 2007).
"If you talk about branded entertainment," he says, "we are just starting to scratch the surface."