Press

Entertainment - Reuters Industry - March 30, 2005
Product Placements in TV, Films Soar, Study Finds

Mediapost's RICH MEDIA INSIDER - March 28, 2005
BRANDING OR DIRECT RESPONSE? THE ANSWER IS BOTH

The Hollywood Reporter - February 10, 2005
Battle for the Brands

The Hollywood Reporter - January 13, 2005
The Carmel Group Estimates that DVR households in the United States will explode from 8 million now to 21.1 million by year's end

Post Daily News - January 10, 2005
ABC Finally gets Desperate for Branded Entertainment

Advertising Age - January 2, 2005
IPOD Threatens $20 B Radio- Ad Biz

The Economist - June 24, 2004
The Future of Advertising, The Harder.Hard Sell

AdAge.com - Sept. 14, 2004
NIELSEN INVESTIGATING PRODUCTION-SIDE PRODUCT PLACEMENTS

Wall Street Journal - Sept. 2, 2004 08:31 AM
'Apprentice' gets bigtime product placement

The Gallup Management Journal - Thursday, September 09, 2004
Getting Emotional About Brands

Entertainment - Reuters Industry
Product Placements in TV, Films Soar, Study Finds
March 30, 2005
By Gail Schiller

LOS ANGELES (Hollywood Reporter) - Paid product placements in movies and TV shows soared 44 percent to $1 billion last year, with spending on television placements skyrocketing 84 percent and outpacing film for the first time in 30 years, according to a new study from market research firm PQ Media.

The survey, based on more than six months of research by the Stamford, Conn.-based firm, also found that the total value of the product placement market, including barter and gratis arrangements, grew 31 percent to an all-time high of $3.5 billion last year and is expected to expand another 23 percent to $4.2 billion this year.

PQ Media said the 100-page study, which includes 30 years of trends and five years of spending forecasts, is the first to ever put a value on the product placement market and break it down by medium, marketing category and placement arrangements including paid, barter and gratis.

The company said it conducted dozens of interviews with executives and account managers at advertising and marketing agencies, consumer product companies and media and entertainment corporations over the past six months.

PQ Media said it also analyzed thousands of public and private documents related to product placement and branded entertainment to compile the report titled "Product Placement Spending in Media 2005."

The study also indicated that the growth in product placement is coming at the expense of the advertising market, with advertising and marketing expenditures up just 7 percent last year despite increased spending on political ads in an election year.

"Marketers have substantially ratcheted up the role of product placement in their buying strategies," PQ Media president Patrick Quinn said. "Product placement is becoming an integral part of a larger marketing package for many advertisers."

The study found that paid placements constituted just 29 percent of the overall value of the market last year, with barter agreements and gratis placements accounting for the lion's share of the market value.

According to the survey, paid television placements soared 84 percent last year to $552 million, while film placements were up just 12 percent to $412 million. Paid placements on network TV alone jumped 84 percent to $438 million, while cable placements rose 87 percent to $91 million.

PQ Media said it was the first time paid placements in TV outpaced those in film. In 2003, TV paid placements were valued at $300 million, while film placements were valued at $369 million. Overall placement value in television, including barter and gratis, outpaced film for the first time in 2002.

The market is expected to grow at a compound annual rate of 15 percent from 2004 to 2009, reaching $6.9 billion, the survey found.

PQ Media said the value of placements in television, films and other media grew at a compound annual rate of 16 percent from 1999-2004 and 11 percent since 1974. Growth over the past five years was fueled mainly by television because of the emergence of reality TV and the debut of niche instructional cable outlets such as the Food Network, the Learning Channel and the Outdoor Life Network, Quinn said.

The study also found that more than half of product placement spending is found in four of 10 marketing categories: transportation and parts, apparel and accessories, food and beverage and travel and leisure.

Source: Mediapost's RICH MEDIA INSIDER-
BRANDING OR DIRECT RESPONSE? THE ANSWER IS BOTH
March 28, 2005
By Chris Young

SINCE THE FIRST ONLINE AD was sold in the mid '90s, our industry has made enormous strides and, in my view, is about to pull up a chair at the grown-up table to be served its rightful share of ad dollars. Yet, some things about online never seem to change, such as the debate about whether at the end of the day it is a direct response medium or a branding medium on par (or even better than) TV and print.

Since, unlike most other media, the interaction with end users can be measured by their "response" some have pushed the CPA model insisting that the Internet is only effective if it can provoke an immediate "desired action." Others have shown that because online can provide a nearly limitless amount of consumer information and selling points about brands, that with sufficient reach and frequency, it is a superior branding medium. This argument occurs not only at the macro-Internet level, but the micro-ad-unit level.

I will go out on a limb here and say, as far as online video, it can be both.

As proof, I provide some enlightening statistics from John Kerry's presidential campaign, which at different times asked the Internet to be both a direct response vehicle and later, a branding medium. Early in the race it was imperative to John Kerry and the Democratic National Committee (DNC) to raise money to jumpstart his campaign. The result was a video that did three things: introduced the candidate, asked for e-mail names and ZIP codes (for a variety of targeting objectives later) and solicited a donation. More than 13 percent of the users who clicked on the John Kerry video ads stayed with it long enough to donate money towards the campaign. This is a terrific rate for any kind of direct response.

Was it the creative or the ad unit? You decide. By contrast, similar standard GIF and Flash ads, showed a click-to-donation conversion rate only of about 2 percent.

After the Democratic convention, the campaign moved into its "branding" phase or to voter persuasion. The DNC ran different spots created specifically for the Internet. During this part of the campaign, the percent of video viewed metric became a key indicator of success. Users overwhelmingly viewed a large portion of the ad before clicking through. For example, 59 percent of viewers watched between 18 to 24 seconds of the 24-second spot. Put another way, of the more than 50 million video impressions run by the DNC, approximately 30 million views watched at least 75 percent of the spots.

The DNC ran several ads throughout the campaign, including some units that presented users with multiple videos based on different pressing issues. The first incorporated three TV spots covering three different issues: the first hundred days, health care, and special interests. An analysis of the campaign was able to determine which videos were receiving more play than others providing a guideline to what was resonating with the public. In the final weeks of the campaign, Internet-only video featured key debate footage.

The campaign certainly raised money from online ads earning its direct response credential. But since Kerry did not win the election, does that mean the branding aspect of the campaign failed? That we will leave to the political experts. But the key success metric was that users were engaged by the online video often enough and long enough for its messages to be delivered. Can anyone say with certainty how long TV spots were watched or which ones struck a responsive chord with viewers? The cost to adjust online messaging was infinitesimal compared to changing TV commercials in and out.

Last year's political campaign did not generate the online spend we all hoped and expected it would. But when campaign managers look at how each medium performed for their candidate's varying objectives, I expect online will come to be the predominant medium of choice for future political races.

Chris Young is CEO of Klipmart. Klipmart (www.klipmart.com) is the largest provider of online video delivery and management services.

Source: The Hollywood Reporter
Battle for the Brands
February 10, 2005

Producer Mark Burnett with Sylvester Stallone has lined up a raft of show sponsors for the upcoming NBC series “The Contender”, including Toyota, Home Depot, and Gatorade. How producers and networks split the revenue from such deals is generating some tough negotiations.

Source: The Hollywood Reporter
The Carmel Group Estimates that DVR households in the United States will explode from 8 million now to 21.1 million by year's end
January 13, 2005

The Carmel Group, is the premiere provider of reliable DBS, Satellite Radio, Cable and Convergence Technology news and information, involvement with almost every major satellite, cable, iTV, streaming media and consumer electronics provider in business.

Source: Post Daily News
ABC Finally gets Desperate for Branded Entertainment
January 10, 2005

In a time when digital video recorders threaten to reduce TV advertising coffers because consumers can fast-forward through commercials, ABC should encourage small companies to advertise in addition to striking deals with the major TV advertisers.

Source: Advertising Age
IPOD Threatens $20 B Radio- Ad Biz
January 2, 2005

Irene Katznelson, VP Director-Network Radio at Universal McCann in New York, agrees but notes, marketers are no longer satisfied with, “spots and dots.” Two to three years ago, the marketing industry instituted a widespread shift to a more integrated approach. Today, “It’s all about cross-marketing.

Source: The Economist
The Future of Advertising, The Harder.Hard Sell
June 24, 2004

The advertising industry is passing through one of the most disorienting periods in history. This is due to a combination of long-term changes, such as the growing diversity of media, and the arrival of new technologies, notably the internet. Consumers have become better informed than ever before, with the result that some of the traditional methods of advertising and marketing simply no longer work.

Source: AdAge.com
NIELSEN INVESTIGATING PRODUCTION-SIDE PRODUCT PLACEMENTS
Plans to Report TV Producer and Prop Master Deals to Networks
By Claire Atkinson
Sept. 14, 2004

NEW YORK (AdAge.com) -- In the wake of the release of its first full-season TV product placement tracking report, Nielsen Media Research plans to penetrate the world of product placement deals done by prop masters and program producers, according to the Madison + Vine Online Newsletter.

All details targeted
An article in the Sept. 8 issue of the subscription newsletter said Nielsen plans to expand its initial product placement tracking system into a broader monitoring service that allows TV network executives to know and study details of all deals that result in products being shown in their programming.

Nielsen's new product placement tracking service data is currently bought only by Zenith Optimedia Group, said Dave Harkness, senior vice president for strategy and development at VNU Media Measurement and Information Group. He said the company is currently in negotiations with several networks.

The service began Sept. 5, 2003, with Nielsen analysts taping and watching every single show on the broadcast networks for analysis.

Further expansion
Mr. Harkness said the service will be further developed to provide network executives with data about all aspects of product inclusions in programming.

Many brands end up in TV shows by way of prop masters and producers who negotiate placements as a means of cutting production costs. Nielsen is investigating ways of systematically identifying placements that are the result of such barters, as well as those that are paid for directly through the networks.

Mr. Harkness said that, ultimately, the new service can offer networks "an opportunity to synergize and monetize all the casual [product] appearances" in TV programming.

'Directly from the producers'
"We're trying to get that information directly from the producers," he said. "This is the first opportunity the networks have had to get some understanding of product placement. ... Now they have a way of understanding and linking [it] with the advertising sold in the programming. They'll work to get some control of the brand appearances."

In last week's first full season report, the new Nielsen system ranked Coca-Cola Co. as the champion of product inclusions in show content.

Coca-Cola products or mentions appeared 2,260 times, second only to Nike apparel products, which appeared 1,048 times in programming, according to the report.

Mr. Harkness said the Nielsen study found that January was the heaviest month for brand inclusion in TV content. He said during that month many original shows were launched and many more product inclusions appeared.

'Apprentice' gets bigtime product placement
Brooks Barnes
Wall Street Journal
Sept. 2, 2004 08:31 AM

When NBC's "The Apprentice" launched in January, some television critics complained that many of the tasks at the center of the Donald Trump-hosted series were more appropriate for preschoolers than people competing for a $250,000-a-year job. In one episode, the 16 contestants set up a lemonade stand. In another, they sold T-shirts at a flea market.

The jobs were rudimentary for a reason: "We asked some big companies to participate," Mr. Trump says. "Nobody wanted to go on television with some show that might not be a hit."

The producers didn't have to go begging the second time around. In one of TV's biggest product-placement deals yet, the second season of the blockbuster reality show will focus on a major U.S. company and its products in almost every episode. Contestants design a boy's toy for Mattel Inc., help market Levi Strauss & Co.'s jeans, launch a new Crest toothpaste product for Procter & Gamble Co., and redesign the packaging for one of PepsiCo Inc.'s biggest brands. Rounding out the corporate cast are Cunard Line Ltd., Toys "R" Us Inc., Mars Inc., Delta Air Lines, Visa, Volkswagen AG's Lamborghini and Ciao Bella Gelato Co.

Driven by advertiser fears about the growth of digital video recorders that allow viewers to skip ads while they watch television, TV networks are increasingly willing to incorporate products into the background of prime-time programming. But brand experts say never before have so many major companies inked such overt product-placement deals in such a high-profile show.

The move sets up perhaps the biggest test yet of the traditional divide between advertising and programming. "We're starting to see just how far the lines will blur," says Jack Trout, president of Trout & Partners, a Greenwich, Conn., marketing-strategy firm.

The willingness of major companies to participate in "The Apprentice" this time around is a testament to the success of the series, which premiered to solid ratings last spring but grew into a TV juggernaut. An average of 20 million people tuned in to each episode, with 40 million watching the finale, according to VNU NV's Nielsen Media Research. More important to advertisers, Nielsen data show that "The Apprentice" delivered one of the most upscale audiences on network TV. "The demographics overlap completely with our target consumers," says Diane Dietz, marketing manager for P&G's Crest division, which is moving to position itself as a beauty brand.

Even so, P&G and the other partner companies are taking a big risk, marketing experts say. For starters, each company relinquished control of its tightly controlled public image and brand - the show's producers have final say over how footage is edited, and most of the companies involved won't see their episode until it airs. Among the other potential pitfalls: Such "product placement to the extreme," as Mr. Trout calls it, might turn off sophisticated consumers, and ratings could suffer if Mr. Trump's troubles with his debt-laden casino empire escalate.

Then there's the cost. NBC, part of General Electric Co., and Mark Burnett, the show's creator and executive producer, negotiated with each company separately, but many participants paid "product integration" fees of about $1 million each, according to people familiar with the contracts. Including ad purchases during the shows, at least one company spent upwards of $20 million.

One company decided "The Apprentice" wasn't worth that price. DaimlerChrysler AG's Chrysler Group, which donated prizes in the first season, declined the producers' offer to sponsor the upcoming season. Chrysler spokeswoman Suraya DaSante says the company had a good experience with the show, but didn't want "to commit so much from both a monetary and a resource perspective."

Mr. Burnett, also creator of the hit CBS series "Survivor," which brims with product placements, says the price isn't out of line based on the audience "The Apprentice" delivers. He notes that companies get exposure around the world - the show also airs in Australia and in large parts of Africa, South America and Latin America - and that NBC just released the first season on DVD.

Mr. Burnett also says that "The Apprentice" offers advertisers more than a passing mention; in many cases, up to half of each hour-long episode is footage of the contestants working at the various companies. "These tasks cost a fortune to pull off," Mr. Burnett says. "If there was no fee it would be like giving away advertising."

That's exactly what Mr. Burnett did in the first season, however, after companies he approached slammed their doors in his face. New York-based Marquis Jet Partners, which sells time shares on private planes, got screen time in three episodes for the cost of one free flight from New York to Boston for each of the contestants, says Marquis Vice President Ken Austin. Ad-space buyers estimate the exposure the company received translated into $5 million to $10 million in advertising.

But Mr. Austin has a warning for the companies that signed up for season two: Don't expect a big sales bump. He says his company received about $1 million in new business it can trace to the show. "It didn't rock the world for us in terms of sales," he says. "I'm not sure Pepsi will fly off the store shelves the next morning, either."

Pepsi, for one, says it isn't looking for the show to drive sales. Rather, the company wants to "spotlight our entire company and culture," says Dave Burwick, Pepsi's chief marketing officer. While "The Apprentice" was taped almost entirely in New York during season one, contestants flew around the country in the second season as a way to instill the flavor of various corporate cultures, producers say. Among the destinations: Pepsi headquarters in Purchase, N.Y.

Robert Hanson, Levi's brand president, says the format of "The Apprentice" makes the show particularly attractive. Placements can seem "tacky and stick out like sore thumbs" in most TV series, he says. But because products are woven into the action on "The Apprentice," the branding effort appears more natural, he says. "The contestants are talking about your product throughout the whole show," says Janis Smith-Gomez, vice president of marketing for Masterfoods, a Mars unit that is launching its new Amazing Bar on the series. "That's much more valuable than just having your product sitting in the background."

The first episode, set to air Sept. 9, is typical in how the companies are woven into the plot. The 18 candidates meet at the flagship Toys "R" Us store in Times Square, where Mr. Trump assigns them the task of creating a toy for boys 5 to 8 years old. Splitting into two teams, the contestants interview kids in the store and then meet with Mattel designers to start building prototypes. Three top-level Mattel executives judge the ideas and select a winner.

Mattel spokeswoman Sara Rosales says about two dozen employees participated in the episode, which was filmed over three days. The company says it is conducting focus-group research on the winning toy and tweaking it for mass manufacture.

Before filming, Ms. Rosales says the company's chief concern was that the show would make fun of its executives who, in effect, make a living playing with toys. Also, as a precaution, Mattel kept producers away from its marquee brands. "It's not like we let them loose on Fisher Price, Barbie or Hot Wheels," Ms. Rosales says.

Getting Emotional About Brands
Marketers realize that emotions are important. But they’re not quite sure why -- or what to do about it.
by William J. McEwen
Thursday, September 09, 2004

It should come as no surprise that humans are emotional creatures. Even a casual glimpse into the nation's driveways, liquor cabinets, and cosmetics shelves reveals that consumers make buying decisions based in part on their feelings and emotions about particular brands. And marketers have long recognized the fact that emotions play a key role when consumers are talking about -- or purchasing -- products in categories as disparate as those represented by brands like Mercedes, Kodak, and Louis Vuitton.

Although none of this seems all that newsworthy, marketers appear to be rediscovering the power of human emotions, as evidenced by a raft of books and articles now in bookstores and on marketers' desks. Perhaps you've already read Passion Branding, Emotional Branding, The Culting of Brands, or Lovemarks. Or you may have noticed that the Journal of Advertising Research recently devoted an entire issue to studies of "Emotion in Advertising."

Suddenly, it seems that the new marketing millennium is all about emotions. And whatever has sparked this resurgence of interest, it's apparently contagious.

Emotional connections: links that last
Why all the interest? In part, it's because of the intensified focus on customer retention. To reap the enhanced financial benefits that can result from customer loyalty, marketers have enthusiastically pursued strategies intended to keep customers coming back. In fact, marketers want to move beyond customer "retention," which is merely a behavior, to generating customer "commitment," "delight," and even "evangelism" -- all of which represent enduring psychological bonds that link a customer to a company. (See "The Constant Customer," "Beyond Customer Loyalty," and "Customer Satisfaction Doesn't Count" in See Also.)

In their books and articles, brand consultants have talked about consumer emotions and emotional connections. They've written about the passionately strong bonds that companies as varied as Harley-Davidson, Krispy Kreme, eBay, Starbucks, and Virgin have cultivated with their consumers. There are fascinating stories of brands that have intense customer loyalty that is the stuff of legend. They describe the sort of loyalty that, as marketers, we all covet.

But what about the marketer who is challenged to sell checking accounts rather than motorcycles? What about the brand managers who are tasked with pitching canned peaches, software, or home mortgages? Is there any hope for them? Or should they change jobs and join a company that sells, say, expensive watches, seeking a brand or product where a rich array of human emotions can come into play?

Many of the writers who focus on the brand new world of emotions have overlooked the mundane, favoring the highly visible "badge" brands that operate in "emotional" categories. Much of their writing and analysis seems to imply that emotions are something that your brand or product either inspires or it doesn't. Sports cars and perfume are emotional, while office supplies and household cleaners are not.

Whether or not its brand or product is viewed as "emotional," a company faces a major dilemma when it seeks to better understand how consumers connect with its brands. Emotions are treated as something that can be sensed but that otherwise defy scientific measurement. For example, Coca-Cola has "it" -- but we're never quite sure what "it" is. And too often, when measures of emotions are proposed or provided, they are complex and difficult to administer. They rely on strategies that are not always easy to replicate, like nonverbal photo sorts or deep psychological projective probing. More to the point, while these measures may correlate with consumers' stated intentions, they may fail to provide the sort of evidence that is demanded in the boardroom: How well do they link to actual, hard-number financial outcomes?

Psychologists have been studying human emotions for some time, and they've identified a number of them, ranging from "anger" to "disgust" and from "envy" to "love." But what are the emotions that a brand marketer should seek to embrace? What is the value of an emotional association? How on earth can a CEO tell when an emotional connection is present or when it's growing or intensifying -- and above all, why should he or she care?

In short, despite the interesting stories and intriguing case histories, all the books on emotional branding really haven't given much guidance to brand managers.

Cracking the emotional code
As mentioned in several Gallup Management Journal articles, The Gallup Organization has dug deeply into the nature of emotional relationships and how they can be reliably assessed and effectively managed. (See "Building a Brand Relationship," "Marketing's Missing Link," and "The Engagement Imperative" in See Also.) Gallup scientists have examined the role that emotions play in consumer decisions, and they have documented the impact of those emotions on a wide variety of hard-number business outcomes.

The following conclusions emerged from the findings of an extensive global R&D effort, along with the results of a number of company applications:

• Emotional connections are not only the province of certain "emotional" categories or brands. Consumers are emotional about checking accounts and discount merchandise, not just about soft drinks and expensive fountain pens. Bank of America and Wal-Mart create emotional connections just as surely as JetBlue and iPod do. They do it in different ways -- depending far more on their people than on their products -- but the result is the same.

• Gallup surveys have shown that 11% of U.S. car owners are passionate about the car they own, but 13% are passionate about the place where they bank, and 12% are passionate about the mass merchant retailers where they shop. People aren't either "emotional" or "unemotional." Consumers are typically highly emotional about some brands and products while completely indifferent and "unattached" to others. Business customers are as emotional about their B2B purchases as car buyers, clothing shoppers, and resort visitors are about their selections.

• Consumers' emotional connections have a specific -- and fairly simple -- structure, regardless of the nature of the particular emotions involved. As revealed by Gallup's customer engagement metric, the structure begins at the foundation of the customer relationship with Confidence, then proceeds through Integrity to Pride to -- at the pinnacle of the relationship -- Passion about the service, product, or brand. (See sidebar: "Levels of Customer Engagement.")

• Emotional connections are not merely warm and fuzzy, nor are they simply interesting to contemplate and debate. They have powerful financial consequences, ranging from share-of-wallet to frequency and amount of repeat business. "Fully engaged" retail customers spend more and return more frequently than those who are disengaged. Retailers that have taken action to enhance their customer engagement by capitalizing on the engagement-building skills of their own customer-facing employees have seen double-digit increases in both sales and profit per square foot. Gallup has seen these results not just in the United States, but around the globe -- and we've seen them for banks, auto dealers, hardware stores, and business services marketers. Emotional connections are universally important, and managing those emotional bonds pays off handsomely.

• Some companies are very good at creating emotional connections with their customers. Most, however, are not. Companies that are successful at creating emotional connections benefit from stronger results, not only in cash flow and profit, but in market share.

• Emotional connections aren't static. They ebb and flow, and the results can affect a company's long-term business success. Emotional connections can be measured. They can be enhanced. And they can be managed. It's not easy, but it's demonstrably possible.

Thus, brand "passion" is not simply a topic that provides for interesting reading. And brand passion not an atypical emotional response -- something reserved only for atypical brands operating in atypical marketing environments. Emotional brand connections are, for any company that plans and hopes to compete, a business imperative.

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