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March 26, 2005
Industry Scramble for Product Placement Deals
DVR's chip away at the reliability of television advertising from the point of view of the advertiser. I think we all know that. One of the first responses has been to investigate putting more product placement deals directly into the content. Or in the venacular of the day: branded entertainment. (I swear that I am not making that phrase up!)
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Responding to a question at the Association of National Advertisers' TV forum on Wednesday, Mr. Moonves said, "There is still a cost associated with putting commercials into our shows. Is it something that should be looked at, we're looking to talk about it." Another senior executive at CBS said separate integration fees could become a reality later this year.
Apparently, the recent legal spat between Mark Burnett Productions and product placement agency Madison Road revealed the kind of catfights going on over who gets to share in such fees. Mark Burnett Productions currently charges integration fees of up to $5 million for The Apprentice, a show it produces for NBC.
I do not think that this trend can contribute too much in the way of profits at a CBS or any other major media outlet. First, if it goes too far, the audience will simply tune out of programs that acts as one huge commercial. And if this happened, it would cripple their real source of revenue: 30-second commercial spots.
Second, how many product placements can you do in a program before you reach that tipping point? One, Three, Ten? So, the number of deals would have to be limited to a handful of advertisers.
Finally, how do you deal with the large number advertisers whose products really don't fit into the show well? Maybe it might be wiser to say that if fit in, the show would have to be pretty warped to do so. This also would cover products who could only stand to look bad if fit into a comedy or reality show. For example: cancer awareness or Preperation H or erectile disfunction or Metamucile or (you get the point...)
I believe that Ford Motor company found some limitations to their huge product placement deal on the hit show 24 and have scaled that effort back significantly.
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