Lack Of ROI Tools Stalls Overseas Placements

An ensemble comedy called My Siblings will bow later this year on Beijing's China Central Television network with product placements for Cadbury Schweppes chocolate, Motorola and Bacardi rum. The show's producer, Larry Rinaldi, spent six months negotiating the deals—valued at $160,000 all told—using a rudimentary collection of about 10 placement metrics that he stitched together himself, including how much time each brand would be featured on screen (in the background or foreground), and how characters in the show would interact with the products. By U.S. standards, a product placement valued at $160,000 isn't much. But in China it's a pretty big deal. According to Rinaldi, who's spent 15 years producing TV programs and dealing with advertisers in the Chinese market, the total annual outlay by marketers for branded integrations in the country is only $10 million, a fraction of the estimated $30 billion ad market there. If you think the growth of branded entertainment initiatives in China seems stunted, Rinaldi would agree. And the reason, he believes, is a lack of adequate measurement systems to assess market value and impact on viewers. "Nearly all of the product placement business is left on the table because there are no metrics in China," he said. But that could soon change. This week, New Rochelle, N.Y.-based evaluation firm iTVX is introducing a new version of its Q-Ratio measurement system, which enables advertisers and creators of product placements in foreign markets to calculate the value of integrations on the basis of 30-second spot pricing in those markets and in local currencies. About 25 domestic clients already use earlier versions of the iTVX system, including Nissan, Toyota and Ford. Rinaldi and iTVX are in talks on a venture to bring the system to China.That country's $10 million product-placement industry is minuscule compared to the U.S., where PQ Media estimates the value of such integrations will reach $5.7 billion in 2006, up 28 percent from a year ago. And the value of worldwide branded integrations will surpass $7.3 billion this year, up 22 percent, per the PQ Media Global Product Placement Forecast 2006, a new report to be released Aug. 9. But Rinaldi said the potential market for branded integrations in China is far greater because viewers there, like those in the U.S., are increasingly avoiding TV ads. He said that more than 80 percent of Chinese viewers regularly click away from ads, which often appear in pods of 10 minutes or more, with total ad time averaging about 25 minutes per hour. That makes the U.S. TV environment seem relatively uncluttered. According to Nielsen Monitor-Plus, ad time on the major broadcast networks averaged a little less than 16 minutes per hour in 2005. "Brand managers everywhere are inundated with product-placement proposals. But unless it can be valued and measured in some form of ROI, their job is on the line," said Frank Zazza, founder and CEO of iTVX. Indeed, in many countries advertisers have ignored product placement for just that reason, said Tee Kuboki, president, Front Line, a Tokyo-based branded entertainment company. But improved metrics, he said, "[are] an eye opener for some advertisers, and they are beginning to realize the real value of product placement."The iTVX system crunches data related to 60 placement metrics that allows the user to calculate a value, compared to a regular ad in the show, almost instantaneously. The company also claims the system is an accurate predictor of recall and awareness levels, and it can verify that the integration was aired down to one one-hundreth of a second.But some marketers question the iTVX approach, contending that the objectives of placements aren't the same as traditional advertising. So while calculating an equivalency value may have some merit, other factors need to be considered, said Tim Sullivan, director of media sevices, Domino's Pizza. Sullivan voiced concern that iTVX's approach stresses the "media value" of an exposure over the "marketing value." What needs to be assessed, he said, is "the objective of the overall integration."In Mexico, Domino's measures the sales impact of paid placements in-house, said Alejandra Rodriguez, the pizza giant's brand manager for the Mexican market. Nonetheless, others point out that, if nothing else, having a metric that puts a price tag on placement may help bring otherwise leery marketers to the table. As Bob Baraocci, president of the Advertising Research Foundation, put it, "It's a number that you can begin negotiating with."While iTVX appears to be the first syndicated product-placement metrics company pursuing business in foreign territories, it does not have the market all to itself. Some media agencies are developing their own proprietary systems as clients become more interested in the branded entertainment space. Havas' MPG, for example, has developed a system called Center Stage, which insiders said is similar to iTVX in the functions it performs and is designed for use by clients across its international network.MindShare is developing a proprietary system called Oscar that, like iTVX, is a qualitative tool that would attempt to address the individual goals of each placement. "It's more than just a metric, it's a process," said Diane Denesowicz, senior partner, director, media research and development, MindShare.Other third-party product placement measurement services, such as Place*Views, from Nielsen Media Research (owned by Adweek parent company VNU) and NextMedium, are still contemplating how to approach the global market. A plan hasn't been finalized, but the demand appears to be there. "Numerous international clients have approached us," said Annie Touliotis, Nielsen's director of product development and marketing. The product-placement analytics offered by Place*Views and competitors such as TNS Media Intelligence focus on exposure metrics, such as recall and intent to purchase. They don't try to equate a placement's monetary value to traditional ads like iTVX and Center Stage. China isn't the only market that lacks branded entertainment metrics. India has similar issues, said Atul Phadnis, a partner in Media e2e, a Mumbai-based media consulting company that helps clients put together branded entertainment offerings. Like China, commercial clutter frequently runs 25 minutes per hour on Indian TV, he said. And marketers there have also been reluctant to try integrations without metrics. "Product placement is something very new to us," he said, suggesting that it really only began in 2004. As in China, marketers in India want to know "how much should a product be worth in monetary terms," says Phadnis.A few months ago, Media e2e entered a joint venture with iTVX to provide product-placement valuation metrics to Indian clients for the first time. Since the venture was launched, Phadnis said he's signed Unilever, as well as several TV networks and movie producers as clients.Phadnis believes the availability of placement metrics will bring some order to what he describes as the "chaotic" way in which the branded entertainment industry has evovled in India up to now. It's not unusual to see hundreds of different brands integrated into a single televised cricket match, he said. "What does that do to viewers or brands?" he asked. Hopefully, he said, the new metrics will help "clean up" and bring some rationality to the placement process.

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Lack Of ROI Tools Stalls Overseas Placements

Laura Blum

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