BMW abandons Madison & Vine

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For years a discussion about branded entertainment rarely passed without mention of BMW, the pioneering marketer in the space, so the automaker's decision to exit entertainment altogether has raised eyebrows on Madison & Vine.

BMW of North America created the benchmark for product placement with its vehicles appearing in James Bond movies and setting the online bar with the popular short-film series "The Hire." But now the German automaker appears to be shunning Hollywood.

The company switched entertainment agencies this year. After six years at branded entertainment specialist Davie-Brown Entertainment it moved to L.A. agency Rogers & Cowan, more renowned as a PR firm than a Madison & Vine operator.

Even before the switch it had been moving away from branded entertainment, seemingly unwilling to greenlight entertainment projects. Its "Hire" series had run its course, ending with a recent comic book spinoff that got little marketing support. The company is no longer sponsoring high-profile events around Tinseltown, and one executive claimed the automaker recently turned down an opportunity to do a six-part extension of "The Hire" series on NBC.

And when it comes to product placement, the company is only interested in the most basic arrangements-wanting to spend little, if anything, on additional media to support the project.

The primary reason for BMW's new backseat approach: Branded entertainment is just getting too expensive. According to executives close to the client and experts in Hollywood, BMW doesn't have the marketing dollars to ink entertainment deals at a time when integration fees and marketing requests from film or TV partners are escalating.

Tight budget

Gabriella Molteni, manager of corporate communications who oversees entertainment for BMW at its Los Angeles office declined to comment. A spokeswoman at BMW's North American headquarters in Woodcliff Lake, N.J., didn't return calls for comment.

BMW, a niche, family-controlled carmaker, has tighter budgets than its bigger automotive rivals. It spends roughly $70 million in measured media annually in the U.S., according to TNS Media Intelligence, an amount bigger-budgeted auto brands spend to launch a single model.

Yet BMW's decision comes at a time major automakers like Toyota Motor Sales USA and Audi of America, who previously held out on entertainment, are accelerating their deals with Hollywood; and when big spenders like General Motors, Ford and Chrysler are doling out more dollars than ever across the board.

The impact is only just now becoming evident on screen: Audi stole the spotlight earlier this month when it replaced a BMW 7-series with its A8 sedan in "The Transporter 2," which broke Labor Day box-office records. And a lead character in Fox's hit show "The O.C." has traded in his BMW for a Lexus.

BMW's shift can't only be blamed on money.

James McDowell had long spearheaded BMW's entertainment efforts as the company's marketing chief, but left in April to go to BMW sibling Mini USA as VP-sales and marketing. Jack Pitney succeeded Mr. McDowell, but has yet to express interest in pursuing entertainment.

The company is also seeking a new agency to handle its national creative chores after splitting in June with Publicis Groupe's Fallon Worldwide, Minneapolis, which produced "The Hire" series. Fallon had handled BMW for the past 10 years.

Bureaucracy within the automaker's ranks may also be playing a part here. "The Hire" series was a U.S.-only marketing program created by Fallon and approved by Mr. McDowell. But once that program won rave reviews and accolades, the carmaker's parent, BMW AG, took control.

"Munich got involved and it became a bureaucratic nightmare," said one executive close to BMW. "The more levels of approval you have for innovative ideas, the more likely you won't get those ideas approved."

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