Evaluating Product Placement For TV Nets, Int’l Distribution
Product
placement it’s an old hat newly dusted and used as a financing tool for
producers and advertisers. Companies are now finding ways to quantify
its effectiveness and letting nets in on the action. But when it comes
to U.S. syndication and international distribution, product placement
can still cause headaches.
“In the late ’70s, there were four or five of us [in the U.S.] doing product
placement,” said Frank Zazza, founder of New York-based product placement-analysis
company iTVX. “Now, there are 600 companies doing it [and] working diligently
to get their products placed.” Zazza explained that TV product placement
is primarily dependent upon a company’s relationship with a show’s set directors. “There’s
not a lot of space, literally, to show products. It’s a very competitive environment,
and 97 percent of the placement that gets done is because people have established
a relationship. As set directors move from one production to another, certain
products will move with them.”
Product placement has traditionally involved the supply of products
to a producer, such as free food for the crew or free clothing for
the cast. Often, money would also change hands. But putting a dollar
figure on placement was difficult, and no concrete business model was
ever established. “A producer or director
working with Coca-Cola, for example, can do whatever he wants to do,” remarked
Zazza. “There’s no absolute guarantee that how he uses the product is going
to be effective. What if it ends up on the cutting-room floor? What if the show
doesn’t happen at all?” So-called “make-good” deals were offered
- which promised that if a placement failed to happen on one show, it would happen
down the line - but the whole process made advertisers uneasy. And meanwhile,
networks weren’t really part of the picture. As Zazza explained, it wasn’t until
recently that product placement became a real financial boon for the nets. “For
instance, a lot of the Seinfeld product placement that happened, which
is so well-known now, was never paid for in terms of results.”
Since
that time, it has become apparent that if the networks could prove
the value of a product placement to an advertiser, they could reap
financial rewards for themselves, primarily by pitching surrounding
commercial spots to brands that are prominently featured in a program.
Meanwhile, from an advertiser’s perspective, there is less risk-taking
involved, because only an effective placement will be rewarded with
an advertiser’s dollars.
Zazza developed a valuation tool that allows nets and advertisers
to quantify the effectiveness of a product mention. “Product placements are judged on
a 10-level scale that goes from a background placement to a verbal plus placement,
where the product is actually mentioned and held in someone’s hands, for instance.” Zazza’s
system takes into account things like clutter, (where products are competing
for a viewer’s attention), the level of interaction between an actor and the
product, and the point at which the placement appears in a program. “People
want to know how a program’s going to end. They will always come back in for
the resolution, and their awareness [of a placement] will be higher.”
To get a final price tag for the placement, the cost of a 30-second
spot is divided by 30. Each level of the product placement scale
is worth a certain percentage of one second. “At around level
seven, which is an implied endorsement (such as [Jerry] Seinfeld eating
out of a box of cereal), the placement becomes equal to one second
of a commercial segment,” Zazza explained. “This
gives networks and advertisers a methodology for doing business.”
CBS has announced a partnership with iTVX wherein the company will derive values
for placements in programs on both CBS and its sister network, UPN. Fox is expected
to announce a similar partnership shortly. On the advertising side, iTVX is working
with major companies like Verizon, Kraft, and Snapple.
Networks and advertisers now have a way to deal with product placement
in primetime, and the business model is becoming less about guesswork
and more about outcomes. But when it comes to U.S. syndication and
international distribution, complications arise. First, as time passes,
products may evolve or even be discontinued. On top of that, logos
and trademarks can change. Virtual brand-switching, where computer
technology is used to alter a product placement, has already been
used in a few instances to address this problem, but Zazza admitted
it’s not a great option. “Don’t buy into all the hoopla about virtual product placement.
The truth is, the technology sucks. You have to worry about things like shadows
and lighting. It’s hard to pull off. And to do it in post [-production],” said
Zazza, “doesn’t pay. It would cost you more than actually buying a commercial.
You want to do placement in the original airing and have it there for a lifetime.”
In general, Zazza doesn’t anticipate syndication causing many problems. “I
see it as an adjunct. If a network knows product placement is going to happen
and the program is going into syndication, they can contact the agency or the
manufacturer directly to buy the commercial right after the placement. It’s an
opportunity for the broadcaster to persuade advertisers to spend.”
What about when it comes to international distribution? “If a product that
is not available internationally is featured in a program, how does that transcend
to international sales?” wondered independent producer Vince Scarza. “A
producer has to think about this,” he continued. “For instance, [U.S.
cabler Bravo’s] Queer Eye for the Straight Guy is product placement head
to toe. But most of it is very American. In one of the shows, they take someone
to Bed, Bath & Beyond. But that store doesn’t exist in Europe,” he observed. “In
another episode, they go to Ikea. Now, that’s a store that’s all over the place,
so internationally, that’s a good product placement. If I use Bertolli olive
oil or DeCecco pasta, things that are available everywhere, that’s going to work
well. Producers have to think about bringing international products into their
shows.”
Scarza pointed out another conundrum when it comes to product placement: “There
could be a potential conflict between featuring a product or brand in a show,
and then selling a commercial to a direct competitor of that product or brand.
In other words, there’s a cross-marketing problem, and the sales departments
and the legal departments are going to have to stay on top of that sort of thing.
What if Queer Eye features Bed, Bath & Beyond, and Bravo’s selling
commercial time to Ikea? What kind of problems is that going to cause? It’s a
potentially touchy issue.”
But Scarza added that reality shows “can get away with murder,
because they generally get sold as format rights. It’s much more
problematic with drama. You have to be far more subtle.”
Still, Scarza, like Zazza, feels that product placement is generally
a very beneficial tool. “It’s a big business that will continue well into the future. It’s
a win-win situation. The producer wins because they either get money from companies
or free products or both. The companies win because their products get shown
to millions of people, practically for free.” And for the networks, the
bonanza is only beginning.
Finally, international distribution of programs featuring product placement is
complicated by the fact that, in some foreign countries, placement is considered
ad time, and therefore is subject to the total time restrictions placed on broadcasters
for showing ads during a program. Italy is one territory, for instance, that
requires broadcasters to include product placement in their total ad time tally.