The lifeblood of commercial television—the commercial itself—is facing uncertain times. Confronting the public’s mass consumption of TiVo and other commercial-skipping devices, broadcasters are experimenting with other means of bringing in much-needed value.
Earlier this television season, viewers of NBC’s The Restaurant were bombarded with brand impressions of American Express, Mitsubishi Motors, and Coors Brewing—not during commercial breaks—but within the show itself. The reality program from executive producer Mark Burnett (Survivor and The Casino) ran without commercial interruption. Instead, the entire show was a commercial of sorts; sponsorship came from the above mentioned companies in exchange for prominent placement within the body of each episode. This is not a revolutionary concept in itself, but you can bet that product placement in television heralds the start of a new era.
The idea of product placement goes back to even before the days when the name Texaco was embedded in the title of Bob Hope’s variety show. But for decades the primary form of sponsorship came from the 30- and 60-second spot. Today, spots aren’t what they used to be. First, audiences are so fragmented that networks get into an ever-decreasing number of households with any given program. Second, the 30-second skip feature/hack on personal video recorders (PVRs) such as TiVo and ReplayTV allow audiences to zap right past spots, more oblivious to the sponsor’s message than in the days of fast-forwarding through a VHS.
Enter shows like Fox’s American Idol, where judges guzzle Coca-Cola products, or Bravo’s hair-styling reality show, Blow-Out, in which the Revlon brand is on display everywhere. Producers, agencies, and networks are always on the look-out for some kind of deal that gets a sponsor’s brand promoted in exchange for some kind of value to the network, whether it be cash up front, cheap licensing fees for the show itself, or access by the production to an entire casino (Fox’s The Casino) or airline (A&E’s Airline).
This kind of product placement is still new and networks are finding their footing. Some of these shows become hits or even cultural phenomena, others vanish. Critics and audiences alike seemed to agree that The Restaurantwent too far. The USA Network (now owned by NBC Universal) recently ran its own made-for-TV movie, The Last Ride, starring Dennis Hopper and Fred Ward, which was essentially a feature-length commercial for the Pontiac GTO. That, too, was received unenthusiastically.
A Place For Everything And
Everything In Its Place
In order to give advertising agencies and their clients an idea of the effectiveness of product placement, Nielsen Media Research is rolling out a product placement tracking service. The Place*Views service tracks the placement of products within shows and the shows’ ratings when those products are on-screen. It was created by the LA-based firm NextMedium “to keep a record of every brand that shows up in every show on network television,” according to NextMedium CEO Hamet Watt. “The service is geared to everyone in the whole entertainment/advertising ecosystem—networks, ad agencies, brands, product placement agencies, talent agencies, and production companies.”
Watt elaborates that “product placement” includes many different types of arrangements. “Advertising doesn’t have to be paid for,” he said. “We think there will be more and more different ways this can happen, and we will facilitate that because advertisers who traditionally avoided this kind of advertising because it wasn’t measured can now come into it.”
Interestingly, networks aren’t in a big hurry to disclose their take on any of this. When I called Fox, home of American Idol and The Casino, a spokesman promised to make people from his sales division “aware of the opportunity to talk about the subject,” but predicted (accurately) that nobody at the network would actually want to avail themselves of this chance. A spokeswoman for both NBC and USA Networks, home of The Restaurant and The Last Ride respectively, explained, “Product placement is not a big part of what we do here.” But, I persevered, The Restaurant was famously full of product placement and The Last Ride was built around a deal with Pontiac. “Well,” she responded, “none of that was really about product placement. It was about synergy.” “I see,” I lied. “Might I speak with someone at the network about synergy then?” “Well,” she responded helpfully, “I don’t think I could provide anyone for you to talk to within your deadline.” And then, after a beat, added, “When is your deadline?”
Synergy: Advertising’s New Paradigm
Watt isn’t surprised that networks like these kinds of arrangements to exist sub-rosa. “I use the term ‘product placement’ and I use all the other terms too,” he said. “I understand what you’re talking about whether you say ‘product placement’ or ‘branded integration’ or ‘embedded advertising’ or ‘synergy.’ You could point to some differences as to how you see those words used, but it’s really all the same thing. I think that the term ‘product placement’ has had some stigma attached to it. Besides, it’s new terrain. The rules aren’t set, so they’re hesitant to share anything specific that they’ve learned.
“And, of course, they also want to continue to support their core business, which is still 30-second spot sales.”
Whatever you call it, there are differing approaches to product placement and the relationship of the brand to the show. In some cases, the brand is clearly being endorsed. Sometimes, the brand is the show: constantly on display, but the relationship between product and content is not as cozy as it is in a commercial.
Nancy Dubuc, vice president of non-fiction programming and development at A&E, stresses that Southwest Airlines cannot approach the content of Airline the way they would a commercial. While Southwest flights and terminals provide the setting for this reality series, the airline has very limited control of how they’re seen. “Southwest was really taking a risk with their brand,” she said. “They do not advertise on the show and only have editorial say when it comes to checking for factual accuracy about issues that come up, like what their company policy is on a certain point.”
Southwest, she said, would likely not even have agreed to the show had they not been able to see for themselves how the original British version, also produced by Granada Productions, handled EZJet. “They have come at it eyes wide open,” she said of Southwest. “They knew from day one it wouldn’t be all rosy.”
In fact, every episode of Airline tends to air some of Southwest’s dirty laundry...and that’s OK with the airline. According to Linda Rutherford, Southwest’s director of public relations, the airline didn’t want the show to look like an infomercial. But the real question is what effect has Airline had on the airline?
“On Monday nights, after the airing of Airline, résumés submitted on our website triple from what we usually get,” said Rutherford. “Employees at other airlines are impressed in the faith that senior management has in our front-line employees.” And ticket sales? “We’ve seen an incremental increase in online bookings after the show airs on Monday night,” said Rutherford. For the record, Southwest’s fare sale email blast hits on Tuesday.
Dubuc asserts that A&E will only entertain such concepts if they believe they have entertainment merit. This kind of arrangement, she said, will benefit no one, if audiences don’t want to watch the show (Airline began its second season this month). “A lot of cruise ships and hotels have come to us based on Airline,” she said. “And we look at each idea based on the merit of its entertainment value. The stories have to be interesting. The audience has to want to watch.”
And the brand, she added, must work intrinsically with the show. “It’s very difficult to force products in where they don’t belong and the audience is savvy to that.”
Gary Ruskin of Commercial Watch, the watchdog group he formed with Ralph Nader, believes that commercial television has long-since crossed the threshold into the realm of infomercial. For him, this is not merely a shame, but a crime.
In open letters to the FCC and FTC, Ruskin argues that both organizations specifically outlaw deceptive ad practices and he outlines how all forms of product placement within the body of a show are necessarily deceptive unless the audience is made explicitly aware of what they’re seeing at the time. A mention in the credits, twenty minutes afterwards, the letters assert, is not sufficient.
And Ruskin has some reason to believe that his calls for action will be taken seriously. His organization fought successfully to force Internet search engines to identify sponsored results as advertising. The case law for product placement on television, he said, is the same and the issue at least as pressing.
“Infomercials are threatening to swallow television completely,” he said. “We now have embedded advertising in the form of product placement, product integration, plot placement, title placements, paid shills hawking products on talk shows, virtual ads...the whole thing is inherently deceptive because many people don’t realize that all these ads are really ads and the networks are being totally dishonest by not disclosing the fact.”
NextMedium’s Watt is not terribly worried about Ruskin’s crusade, and he does not believe the FCC and FTC are going to close the door on the lucrative possibilities offered by product placement. “I think people want to move toward creating value for both sides,” he said. “I don’t know how much traction [product placement detractors] will have either in keeping entertainment companies from making money or marketers from exploring new ways to advertise. I think the trend will always be toward creating value for the key constituencies on the buy side and the sell side.”
Exactly How Much Money?
Let’s use American Idol as an example. Published reports say AT&T Wireless, Coca-Cola, and Ford each paid about $26 million per placement/sponsorship deal. But these type of deals can trickle down to the local level.
At local stations of all sizes, promotional consideration plays a big part during the broadcast day. Morning shows, noon news, evening news, and other locally produced programs benefit from promotional consideration, a fancy way to say “trade-out.” While popular trade-outs are cosmetics and wardrobe, keeping anchors and hosts looking their best, the latest and greatest is free cell phones and service.
One mid-market station that did not want to be identified has a deal with Verizon. You’ve seen the “commercial” at the end of newscasts: “If you see news happening, call the newsroom, it’s a free call when you press *89 on your Verizon wireless phone.” That 15-second message is aired during the last segment of each of the station’s newscasts and is built into the news rundown.
For the value the station placed on those announcements, their entire news department and all department managers get up to 25 phones with $100 per month of service. As an added bonus, phones can be traded in and upgraded annually.
Thank goodness for capitalism! Now pass the Coke.
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