NEW YORK There was a time when putting a cereal box in the background of a prime-time sitcom qualified as product placement. Not anymore. Now, deals involving product integration rank as some of the most complex—and convoluted—in TV advertising.
The line between commercial pods and editorial content is beginning to blur. Digital and mobile extensions play key roles in almost every negotiation. In some cases, advertisers are bypassing networks altogether to create their own forms of branded entertainment.
Whatever form these deals take, most advertisers look at product placement and product integration as rapidly evolving concepts. "It's not just about having a can of Coke on a counter," says Andy Donchin, director of national broadcast for Carat USA. "It's about having your product woven into a show."
Most advertisers agree. "Where it's gotten to right now is that people are a lot more purposeful with their product-integration deals," says John Swift, managing director, PHD U.S.
What's more, buyers have become so purposeful that negotiating for product integration is a key part of most deals. "When a sizable amount of money is on the table, some sort of brand integration is under discussion," says Laura Caraccioli-Davis, executive vp, Starcom Entertainment. "It's just part of the normal ask."
But what form that so-called ask takes is what continues to be debated. "Product integration is as big as it ever was," says Bill Hilary, president of Magna Global Entertainment. "But various factors—from commercial ratings to the rise of consumer choice and digital media, and the flattening of the networks—are making advertisers ask questions regarding what's the next step."
And as advertisers determine what that next step is, the rules of the game continue to change. "Everyone is trying to put up branded entertainment shingles, and clients have many choices in terms of where to go and who to engage to try and develop ideas," says David Lang, director of programming, Mindshare Entertainment. "So I still think it's the wild, wild West out there."
If anything has changed the landscape of product integration, it's probably the growth of online media. "The fact that the Internet has hit critical mass allows us, as creatives, to do so much more," says Lang.
As TV viewers flee during commercial breaks, Caraccioli-Davis says, engaging those viewers is "leading more to the digital environment, where you can have someone raise their hand, opt in and have a dialogue with the brand." Digital extensions of product-integration deals are, in fact, becoming the key element of most negotiations. "There are very few projects we're working on that are solely for broadcast," says Hilary. "Most have digital plays; some have mobile plays." The bottom line, he says, is "advertisers are looking across the board and are more sophisticated in terms of how they want to reach their customers."
Of course, most forms of branded entertainment remain tied to TV content. One such execution is Mindshare's work for deodorant Degree, in partnership with Fox's 24. The agency actually created a new 24 character. But here's the catch: This one lives exclusively on the Web. In a series of Webisodes found on the Degree Men-sponsored ctu- rookie.com, a low-level CTU flunkie is sent into the field for a menial task and finds he must foil a terrorist plot—all the while, staying calm under pressure. "The brand positioning and messaging was ideal for Degree," Lang says.
For the campaign, Mindshare created two short films for the Web. To do that, the agency engaged the show's creative staff. Lang says Mindshare approached the show's director of photography, art director, cameramen and editors, all of whom played a part in the creative process. "We were able to leverage equity and assets of the show to execute two short films that were of the quality of the show," Lang says.
But finalizing pacts isn't easy. Lang says this one took "a long time," needing the approval of 24's creators and studio 20th Century Fox TV. "Putting these deals together is really like a three-dimensional puzzle," he says. "They're very complicated, and because of all the different elements and people and entities involved, they can go sideways very quickly."
Because of the risks, advertisers are exerting more control over content where they can. For Kellogg's Pop-Tarts, a sponsor of Fox hit American Idol's annual summer tour, Starcom has produced its own Webisodes for the tour. "We're going out and doing our own deals with content creators, as opposed to going through sales organizations," Caraccioli-Davis says. "There are a lot of gatekeepers in Hollywood, and the closer you want to get to content, the more gatekeepers there are. And brands need to figure out a way around those gates."
Lang adds the Degree campaign essentially exists outside 24. "What we did was turn the whole product integration model on its head," he says. "We were able to leverage the equity and assets of 24 outside of the show by creating a new and exclusive character to reach a common target that Degree and 24 have."
As advertisers look for new ways to reach consumers, the networks are scrambling to keep those advertisers. Many cite the CW as having tried hardest to come up with ways to excite clients, most notably with content wraps. "When the CW was first formed, one of the great opportunities we had was to try to do something new and different, and that includes working with our advertising partners," says Bill Morningstar, CW exec vp, sales.
Behind the notion of content wraps, Morningstar says, was the need for the net to connect with young viewers. The answer seems to have been blending editorial content with advertiser-supported messages. For example, in commercial spots leading out of Pussycat Dolls Present: The Search for the Next Doll, soap brand Caress profiles contestants—which, in turn, lead to a campaign for Caress' Exotic Oil Infusions line of body-wash products.
According to CW, there's a 98 percent retention rate for content wraps.
Cable net VH1 has made strides in retaining viewers during commercial breaks with what has come to be known as podbusters. The net first tried them out in February during two series, including Hogan Knows Best. Weaving editorial interstitials among traditional ads, the pod is framed by borders which alert viewers to what's coming up next, be it a Snickers ad or another interstitial.
VH1 research found 52 percent of viewers say ads are "more fun to watch" in the podbuster context. VH1 plans to roll out its next set of podbusters by late summer.
Tom Calderone, exec vp, general manager at VH1, says the network most likely will air the podbusters during Sunday night's Celebreality block. But Calderone remains cautious about expanding podbusters. "You don't want to saturate the entire channel with it to the point where it feels less special," he explains. "If these things burn out, then you're not putting your best foot forward."
Blending messaging with content isn't the only way to retain viewers. Last fall, Carat client Philips was the sole sponsor of an episode of CBS' 60 Minutes. Carat's Donchin describes the sponsorship as a "PBS-type scenario" in which the electronics marketer bought nine minutes of national commercial time but aired only four and a half minutes of ads, returning the remainder to the show for editorial use.
Donchin says the sponsorship dovetailed nicely with Philips' message, which is centered around simplicity. "The campaign is all about making life simpler, and one of the ways to do that is making the TV experience more enjoyable by giving people more content and less commercials," he says. "The client was happy, the network was happy and viewers were happy."
As broadcasters and advertisers explore new means of product integration, traditional forms of product placement remain a key ingredient of most marketing campaigns. Financial services provider Charles Schwab turned to PHD to help re-energize its brand with a series of "Talk to Chuck" ads, placed in TNT's NBA coverage. During time outs, the ticking clock figured alongside the "Talk to Chuck" logo and slogan. "The financial conversation is a critical one," Swift says. "To find the appropriate moments in sporting events to capture that mood and feeling and turn it into a 'Time to Talk' segment, it helps the slogan stand out, and it feels really organic."
Networks, too, continue to embrace product integration. Whether it's CoverGirl's long-standing involvement with CW's America's Next Top Model or Cingular's sponsorship of the network's One Tree Hill, "based on the fact that they keep coming back, I think that's a great testimonial to the continued power of product placement," says Alison Tarrant, senior vp, integrated sales and marketing at the CW.
Still, most TV execs acknowledge that product placement is no longer broadcast-specific. It may start on the small screen, but "then it threads through to various digital and mobile extensions, wherever it's appropriate to that specific platform," says Jean Rossi, exec vp, sales at Fox. Rossi adds that the key to creating a successful product-integration campaign is "threading content anywhere that it might live, and keeping customers engaged with that content through that association."
More importantly, most advertisers believe brand integration is rapidly evolving into message integration. "The more your message can be organic to the content and woven into that content, the better," says PHD's Swift.
Caraccioli-Davis says she advises many of Starcom's clients to cloak themselves in content, as Starcom account Allstate does on the Discovery Channel's program It Takes a Thief by providing viewers with home-protection tips. "It's about finding content you can really own," she says. "In order to really captivate the consumer, you need to give them something captivating."
Where the industry goes from here is still uncertain. "What's the model? There isn't a model, because things are changing so quickly," says Magna's Hilary. "Advertisers are looking for so many things. So once you've got the model, it's probably time to move on to the next model."
Frutkin is a senior editor covering TV programming for Mediaweek.