ANA Survey Finds 79% Believe Deals Are Overpriced

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NEW YORK -- Seventy-nine percent of the major marketers polled in an Association of National Advertisers' survey said they believe branded entertainment deals are overpriced and 71% said they were devoting less than 5% of their marketing and communications budgets to such advertising techniques.
Survey respondents cited Campbell's involvement with NBC's 'American Dreams' as one of the most successful branded entertainment projects.

The survey, presented today at the ANA's annual Television Advertising Forum, was designed to gauge ANA member companies' attitudes and activities related to branded entertainment. The 118 respondents included United Airlines, Tyson Foods, Campbell’s Soup, Best Buy, Ford Motor Co., KB Home, MasterCard and Visa.

63% have tried branded entertainment

According to the study, 63% of those polled had participated in branded entertainment projects, with most of those appearing on TV, followed by magazines, movies, video games and Internet endeavors. Of the 37% who avoided branded entertainment, 11% said they had future plans to test them, with the rest expressing low interest because of the concept’s newness and lack of measurable results.

Most of the companies surveyed became involved in Madison & Vine projects through a variety of avenues, with 57% of the deals made between media operators and a marketer and its agency. Another 40% said they dealt with a traditional media agency or brokered the projects as part of a multiplatform deal. Branded entertainment specialists autonomous from traditional advertising or media agencies represented 38% of the deals made, with traditional ad agencies coming in at 30%, and talent agencies even lower at 17%.

When outside resources were involved with branded entertainment work, they typically included traditional media agencies 66% of the time, traditional ad agencies 61%, media owners 54%, autonomous branded entertainment specialists 39%, and production companies rounding out the group at 30%.

Successful projects

Projects that respondents considered successful included Sears’ involvement with ABC’s Extreme Makeover Home Edition, NBC’s The Apprentice, Coke's sponsorship of Fox’s American Idol, Campbell’s Soups placement in NBC’s American Dreams and BMW’s Internet film series The Hire.

In analyzing the benefit of branded entertainment deals, 42% of marketers said it allowed them to forge a stronger emotional connection with consumers; 19% said it enables them to build brand affinity with a desired demographic. The two benefits that are most often associated with branded entertainment's growth -- thwarting increased consumer control of media and avoidance of commercial clutter -- came in at the bottom of the list of benefits, perceived by those surveyed at 9% and 6%, respectively.

Today's ANA study presentation was part of panel discussion at the Grand Hyatt New York featuring David Burwick, senior vice president and chief marketing officer at Pepsi-Cola North America; Mark Kaline, global media manager at Ford; and Stuart Schlossman, senior vice president for media and client development at Madison Road Entertainment.

Mr. Burwick pointed to his company's efforts to launch Pepsi Edge on The Apprentice as a prime example of the genre. Although sales aren't doing as well as the company had hoped, "the brand went through the roof," he said. "It's about lining up with your objectives."

Effectiveness measurement

The effectiveness of the deals still remains difficult to measure.

While 40% of the survey’s respondents thought there ought to be an industry standard measurement for branded entertainment deals, 80% of those who are involved in brand entertainment said they are forging ahead on their own and assessing the impact of their branded integration efforts themselves.

The most important item of measurement data marketers want is data about who was reached by the entertaining communication. Eighty-five percent said that was their primary concern. About 60% wanted to measure the quality of placement, with the rest questioning what programs their products were placed in, and how much exposure the deal got them. Only a quarter cared about how memorable the brand exposure was over time.

"The Holy Grail for marketers is trying to get the ROI," said Mr. Schlossman, who insisted branded entertainment couldn't be measured for return on investment the same way TV is. "The companies that are doing this are measuring change in attitude. If your CMO says 'If I give you a $1 for branded entertainment, what am I going to get back?' that's a tough question." For that reason, he says the easiest way to measure the results of branded entertainment is when it involves a new product.

Television upfront

Survey results are being released as the industry preps for the upcoming TV upfront ad-buying period -– an arena in which 60% of those surveyed negotiated their branded entertainment deals in the past. An estimated 80% expect branded entertainment to be part of future upfront discussions.

Both formal and casual discussions around the ANA event were dominated by the issue of how branded entertainment initiatives will be paid for.

The consensus was that the majority of branded entertainment projects are being funded with money shifted from existing traditional TV advertising budgets or from other media budgets. More than a third of marketers have also shifted funds from promotions and direct marketing into branded entertainment.

Mr. Kaline said one of the key obstacles to devoting an increased percentage of the marketing budget to branded entertainment was the time and personnel required to get it right. "The numbers will increase for sure, but it's extremely time consuming," he said. "The question is, how high is up, given the challenges we all face for time and personnel."

Slow spending increases

Mr. Burwick compared the slow spending increases to the Internet. "I think spending on the Internet, which has been growing for the last five years or so, is at 7% or 8% [of marketing and communication budgets]," he said. "So I'm not surprised that this is where it's at."

Panelists remained optimistic on future deals in the branded entertainment space.

"When you get into integration in films [or] video games, then the money can come from just about anywhere," said Mr. Kaline, who notes that if a marketer has a great idea for branded integration, "they are going to find the way to pay for it."
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