Private Equity-Owned Brands to Start Popping Up on 'Apprentice'
NBC's "Apprentice" franchise is, like CBS's "Survivor" and ABC's "The Bachelor," one of the granddaddies of TV's reality genre. As the show matures, however, its producers have been testing a new ad-sales technique that its real-estate mogul star, Donald Trump, might endorse: tapping into brands owned by private-equity firms.
Yes, 7-Up and General Motors' OnStar will be spotted during certain episodes of "Celebrity Apprentice" this spring, but so will a line of sunscreen and body lotions known as Australian Gold, backed by MH Equity Investors of Indianapolis.
Private-equity firms and venture-capital organizations "want to make as much money as possible and spend the least money possible," said Sadoux Kim, supervising producer-brand integration at Mark Burnett Productions, the firm that has produced "The Apprentice" since its inception in 2004. Because the program typically incorporates sponsors into the central task assigned to competitors in each episode, the firms usually get a lot of bang for their buck.
"These private-equity companies are looking for efficient ways to spend their money without having to put together a media schedule," he added. "One big thing and they can build an entire campaign around that date"
Emergence of private-equity marketers adds a new category of client to "The Apprentice," which has served as a promotional pad for everything from the Pontiac Solstice to Procter & Gamble's Crest Vanilla White. Getting a product woven into an episode of "Celebrity Apprentice" can cost between $5 million and $9 million, according to people familiar with the situation.
The rise of this stripe of marketer could present a challenge for TV networks that typically like to sell traditional ad inventory alongside product placements. Smaller firms may love the TV-show appearance, but might not want the 30-second spots that often go along with it. Indeed, the backers of Australian Gold, which is slated to appear in "Celebrity Apprentice" in the middle of the season, will buy print advertising to bolster its "Apprentice' debut, said Steve Hilbert, CEO of MH Equity, who also leads the Australian Gold business.
For Australian Gold, the placement may be crucial. The company's sunscreens and body lotions have been available and popular for years in Florida, Mexico, Latin America, and the Caribbean and on cruise ships, said Mr. Hilbert. Now, however, Australian Gold products are increasingly available across the U.S. in at least 25,000 different locations, said Mr. Hilbert. "This year, 2011, is our big blow-out year," he said, and an on-screen appearance in "Celebrity Apprentice" does more for the product than buying up ads in all the different regions where the product is available might.
"We don't have the budget that Unilever or Procter & Gamble or whomever has," explained Mr. Hilbert. An appearance in "Celebrity Apprentice" can spark conversations with retailers who will then place more emphasis on a product because it's about to be featured in a TV show on a specific date.
Companies that place their products in "Apprentice" episodes do so through Mark Burnett Productions, which works with NBC ad sales, Mr. Sadoux said. While the marketers are encouraged to buy commercials, there is no mandate that says they must. NBC derives revenue gleaned from the product placement, according to a person familiar with the situation.
Mr. Burnett's company has often enjoyed a greater degree of autonomy when it comes to lacing advertisers into the proceedings of various programs. In 2005, for example, Mr. Burnett received about $100,000 worth of stock options from audio-systems manufacturer SLS International when the producer placed the company's audio equipment into episodes of "Rock Star: INXS" on CBS. The network at the time derived no financial benefit from the relationship, and acknowledged the deal it had with Mr. Burnett was atypical.
Many of the big broadcast networks have in recent years developed policies that push advertisers who want product placement to buy traditional commercials as part of a package. The idea is that the networks can control everything from how much time a product gets on screen to where commercials that might remind viewers of the featured product appear during a show. Tying everything into a single buy can often help reinforce the product's screen time.
While "Apprentice" cycles have run on NBC for about a decade, the show still excites advertisers. "There's continued interest from our clients," said Guy McCarter, managing director of Green Room Entertainment, a unit of Omnicom Group's OMD that specializes in placing advertisers in programs. Results in "Apprentice" cycles in which his clients have been involved have "always been positive," he said.
That said, the show's ratings have declined. In its first season, "The Apprentice" captured the interest of an average of more than 13 million viewers between the ages of 18 and 49, according to Nielsen. An average of 4.2 million viewers in that age range tuned in to see the 2010 cycle of "Celebrity Apprentice," though the health struggles of winner Bret Michaels attracted around 9.3 million overall viewers to the season finale (an impressive showing against the series finale of ABC's "Lost"). This past fall, an average of just 2.3 million viewers between 18 and 49 tuned in for a traditional "The Apprentice" cycle, Nielsen said.
Mr. Trump said advertisers will always have a natural interest in the series. "There's never been another show where you've had a product sold for two hours," he said in an interview. "They do a 30-second commercial, but where do they do two hours?"
Quality, not size, is what makes an advertiser attractive to "The Apprentice," said Mr. Trump. "Whether it's big or not, I don't care. We want a quality product." Omaha Steaks, Camping World, Farouk Hair Systems are among the other advertisers slated to be incorporated into this season's "Celebrity Apprentice."