As advertisers increasingly explore ways to seamlessly blend their products with editorial content, some are coming dangerously close to breaching the time-honored separation between "Church and State."
Consider Toyota's Lexus brand, which currently is trying to convince publishers to buy into new approaches in the product-integration arena that blur the line between editorial and advertising content, media buying sources say.
With publications struggling to find new revenue streams, some media experts predict that product placement in the print medium will grow annually at a double-digit pace over the next five years.
To date, the amount of product integration in print has been small, accounting for less than 10 percent of all such advertising, according to PQ Media, the Stamford, Conn.-based advertising research company. The firm estimates spending of product-integration advertising in magazines and newspapers in 2004 was about $193 million, and that is expected to grow about 12 percent annually through 2009 to reach about $342 million. By comparison, TV product-placement deals will grow 18 percent to $4.2 billion over the same period.
"The print media [are] becoming a major focus of advertisers and marketers for product placement," says PQ Media CEO Pat Quinn. "It's not just for film and TV anymore. Advertisers want a better return on investment, and they are asking publishers to show them more besides traditional advertising."
Indeed, Lexus' effort is driven by its desire to make its print ad dollars work harder, said Bill Ussery, Lexus product communications manager. Ussery said the company is talking to a number of major publishers about several new product-integration ideas for print, but declined to identify the publishers.
Among the ideas that Lexus has proposed, said Ussery, are modified "advertorial"-type stories that would not carry an advertorial label and would be written by staff writers in order to enhance the credibility of the piece.
"One example ... [is] stories written by writers of the publication, but paid for by Lexus, so that they would have a similar writing style and characteristics" as the magazine's editorial content, which, he said, is what attracts readers in the first place. "It would show up as a paid program, but we're just trying to make the message in the paid-placement ads match the writing ... of the publication," he said. The problem with regular advertorials is, he said, "in some cases, it smacks of an ad, and the reader says, 'I'm not going to read that—they want to sell me something.'"
Lexus is also exploring deals that would pay to put its cars in editorial photos. That's something many advertisers, including Lexus, have done in the past, mainly as part of PR efforts in which the company supplies the product in exchange for the possibility—but no guarantee—of it appearing in print. Now, agency executives say, advertisers are increasingly offering to pay to guarantee the placement.
"Print-integration efforts in the past have been led by PR companies," says Steve Farella, CEO of TargetCast. "The question now is, can that be turned into a business for media agencies and ad agencies? The answer is yes, depending on how it is delivered."
Robin Steinberg, svp, director of print investment at Publicis Groupe's MediaVest, agrees. "We've been embedding product mentions and pictures for years, and not paid for it. Now it's changing to where we want to ... be assured that our mention or picture will be there, and we want to pay for it. So, one question now is, do I need a PR buyer on my team?"
At this point, the Lexus proposals are simply ideas under discussion, said Ussery. But as he describes them, they would violate guidelines set forth by the American Society of Magazine Editors, which states the layout, design and typefaces of ad pages should be "distinctly different" from editorial pages. ASME guidelines also frown on reporters and editors writing paid ad inserts for their publications—or any in the same field. An ASME spokesman said guidelines object to product integrations "of any kind." Ussery said the guidelines are part of the talks with publications.
Agency execs caution that product placement should not be at the expense of editorial independence. "The church-and-state issue is the big question out there," said Steinberg. "It can work if it is done right. If it's done poorly, it may backfire."
Virginia Rowe, MindShare senior partner and print director, agreed: "Advertisers want it to grow but also want to make sure respect for the editorial product remains intact."
There's agreement throughout the industry that placements are less appropriate in news publications like Time and Newsweek, which don't accept them—"thankfully," said Jack Hanrahan, director of U.S. print operations at Omnicom's OMD. But, such efforts at lifestyle, women's service or food magazines "could be just what consumers want—more information," he said.
Two new publications are actively seeking product-placement dollars, including monthly food insert magazine Relish, which will launch next February, says Dick Porter, CEO of its publisher, Publishing Group of America. Relish is selling brand mentions in recipes. "The real trick is keeping consumers front and center and [knowing] what appeals to them and what turns them off," he said. Inside TV, a new magazine from TV Guide, also offers integration, such as opportunities to sponsor reader polls.
Ultimately, major revenue growth in this category could hinge on the reaction of big advertisers, many of which are taking a wait-and-see attitude. For now, Ryndee Carney, General Motors' manager of marketing communications, said the carmaker won't pursue paid-integration efforts in print. "But if industry standards change, we would take a look at it. We're open to any new ideas that we think will help us sell more cars and trucks."