Company That Pioneered Field Now Cuts It Off

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LOS ANGELES -- BMW of North America, which played a major role in pioneering the new era of branded entertainment, has suddenly ended its use of that marketing technique.
BMW has yanked the plug on its branded entertainment deals.

Since the summer of 2001 when its first round of BMW Films became an Internet sensation, no discussion about branded entertainment took place without a mention of the company. The German automaker has long dominated the space in the automotive category, creating the benchmark for product placement. Its vehicles have appeared in the James Bond movies and its online short-film The Hire also spawned its own comic book collection.

But as other marketers aggressively look to try to replicate the company’s success with entertainment, BMW has suddenly nearly abandoned the genre.

Abandoned the genre
The company switched entertainment agencies this year, moving from Davie-Brown Entertainment after six years, to Rogers & Cowan, both in Los Angeles. Its Hire series has run its course, ending with the recent comic book spinoff that had little marketing support behind it. In Hollywood, the company is absent, opting not to sponsor high-profile events around town. It doesn’t loan out its vehicles to celebrities or influencers. 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.

Declines to comment
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 rivals. It spends roughly $70 million in measured media annually in the U.S., according to TNS Media Intelligence -- an amount that 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, which previously held out on entertainment, are accelerating their deals with Hollywood; and when big spenders like General Motors Corp., Ford Motor Co. and DaimlerChrysler are dolling out more dollars than ever across the board.

The impact is only just now becoming evident on screen: Once the hero car in three James Bond films, starting with the Z3 in MGM’s GoldenEye, the company’s vehicles are now driven primarily by shadowy villains or henchmen. Audi of America stole the spotlight earlier this month when it replaced a BMW 7-series with an A8 sedan in The Transporter 2 -- a film 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.

Not just financial considerations
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 he left that post in April to go to BMW sibling Mini USA as vice president of sales and marketing. Jack Pitney succeeded Mr. McDowell, but has yet to express interest in pursuing entertainment as a way to continue boosting BMW’s brand identity.

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

Lastly, frustration, when it comes to developing branded entertainment, is to blame.

Parent company bureaucracy
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, Germany’s BMW AG, took control.

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

It’s not as if BMW doesn’t have new vehicles to promote.

The company has been rolling out redesigned version of its 5- and 3-series sedans. The Hire featured its Z4 and X5, among other models.

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