Depending on your point of view, "American Idol" is either the last roar of the network dinosaurs or proof that mass marketing is very much alive and well, with the multiplatform "Idol" economy already valued at $2.5 billion. And the train is still gathering speed. Last year there were three top-tier sponsors-Coke, Cingular and Ford -- but next year there could be four, each paying as much as $25 million. Negotiations with existing sponsors are already under way, and Fremantle Media North America, which sells the sponsorships with Fox, is talking to fast-food, electronics and health and beauty marketers with a view to adding another partner.
Of course there aren't many ways today to reach 30 million viewers with a single message, which is one of the things that makes "Idol's" incredible reach so tempting, but the question remains: Can marketers possibly get good value at such high prices?
Ford's right of first refusal
All the signs suggest they do. Ford, for one, sounded keen to re-up. "We have the right of first refusal," said Linda Perry-Lube, Ford's marketing communications manager. "We want to stay in." This season, Ford said, the show helped build awareness for a new car, the Fusion sedan, and increased message recall "far above expectations" for its "Bold Moves" umbrella brand campaign, which broke earlier this month.
The automaker initiated a study with IAG to measure the impact of its "Idol" sponsorship. Ms. Perry-Lube said the study showed 80% of consumers who saw the weekly music videos during the Tuesday night show, which feature contestants and Ford vehicles, have noted Ford's involvement in the program. Additionally, 25% of consumers said that seeing or hearing about Ford during the program greatly increased their impressions of the brand.
This season Ford also added a contest on the "Idol" Web site, featuring contestants' music videos, with chances to win a prize. During the broadcasts, host Ryan Seacrest encouraged viewers to visit the site and enter the contest. Ms. Perry-Lube said more than a million videos were viewed on the site, and a "couple of hundred thousand" people entered a Ford win-a-Fusion sweepstakes. That online sweepstakes provides an ROI measurement tool. "We wanted to step it up so we have a customer- response mechanism," she said.
Cingular gets split of SMS voting take
Cingular, meanwhile, has used the show to familiarize its customers with the data services it provides that are so crucial to the wireless marketer's plans for revenue growth -- of course Cingular also has the added advantage of being one of the partners splitting the revenue from SMS messages sent by viewers who are voting on contestants.
"It certainly reaches a lot of eyeballs," said John Burbank, VP-marketing, Cingular Wireless. "We view it as the gold standard for integration for a wireless company, in terms of making text messaging an inherent part of the show." This year Cingular recorded 64.5 million text messages during the "Idol" season, up from 41.5 million the season before. Will it re-up, too? "We're very hopeful," Mr. Burbank said.
For Coke, which got its first integration deal in 2002 at the bargain price of less than $10 million after Pepsi passed, the show is a way to kill multiple marketing birds by aligning Coke with the mobile-marketing scene and popular music. It also, of course, helps keep other beverage companies out of the biggest show on TV-a factor that may play a role for all three existing sponsors.
Coke gets more aggressive
In the past year, Coke has been more aggressive in building its presence on the show with onstage graphics between performances, putting the Red Room above the stage and animated digital logos on the screen. It has used additional "Idol" properties such as the Coke-branded "behind the scenes" page at americanidol.com and has produced "Idol"-related products and prizes at mycokerewards.com. Through that site, Coke has begun tracking the show's awareness, but it has not yet disclosed results.
What of those who took a less-integrated approach and simply bought spots? Well, if Mark Gibson, assistant VP, State Farm Insurance, is a bellwether, they're pretty happy, too. State Farm bought into the record-setting finale, in which spots were selling for as much as $1.3 million, but Mr. Gibson was more than pleased with the results. "We have relationships with 28 million households and 40 million auto-insurance policyholders; it's a huge reach against our core target."
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Kate MacArthur and Jean Halliday contributed to this report