The convergence of brands and entertainment is rising. But what's it actually worth?Tune into any reality TV show, from The Apprentice to The Amazing Race, and you won't have to wait long for evidence that product placements are a growing segment of marketing. From films to video games, pop songs to editorial pages of magazines, integrating products into entertainment is one of the hottest ways for corporate America to pitch its goods - and also an exploding area of growth for PR agencies, ad shops, and a multitude of other players looking to be the go-to source for brokering these partnerships. "Product placement used to be handshake deals," says Mark Owens, MD of Ketchum Entertainment Marketing. "There has been a seismic shift over the past three or four years where it has become much more of a marketing discipline and less of a behind-the-scenes sort of business." While the sophistication of such deals is definitely far greater than even a year ago, it's still a wide-open field with lots of contenders. More and more PR firms are formalizing their stakes in this arena with new divisions or hires aimed solely at building product placement abilities and cementing their spots as legitimate players in this market. BWR, for example, long known for its expertise in personal and entertainment PR, created such a unit this month and already boasts client placements in projects like TV program The OC and upcoming Paramount movie The Bad News Bears. "I think it's absolutely a natural extension of the business," says Matt Meyerson, who heads the BWR unit. "I'm not saying every PR agency in America can do what we do, but as BWR, we have a place at the table." Despite the strong commitment from many agencies to provide product placement abilities, the greatest challenge for PR firms might be the increasing scope of these deals. Ever since Oprah Winfrey gave a new Pontiac to every member of her audience last year, the price tag of product placement efforts has been skyrocketing. Nielsen Media Research reported that product placement deals made up a $360 million industry in 2003, with the top 10 programs that had product placements registering more than 18,000 "brand occurrences." This month, NBC Universal and Volkswagen showed just how much corporations are willing to spend to grab the best entertainment tie-ins and how much the industry has grown when the two companies signed a multiyear product placement deal across NBC Universal's film, TV, and amusement parks valued at more than $200 million. Some experts say that those high numbers are more familiar territory to ad agencies and media buyers than PR. That could make it hard for PR firms to convince corporations they are the best suited to broker the deal. But it isn't stopping them from trying. "Everybody is a cowboy trying to attach themselves to this business, and I honestly believe anyone can play," says Rogers & Cowan head Tom Tardio, whose agency has done traditional product placements for almost two decades. He points out that what an agency like his brings to the equation is longstanding relationships in the close-knit entertainment industry. "Advertising agencies aren't used to working with celebrities. They're not in Hollywood," he points out. Meyerson agrees. He says his division already has seen interest from both fellow WPP agency Ogilvy and BWR Fortune 500 corporate clients. And although the numbers might be unfamiliar territory, he says that being part of the larger WPP network gives him the resources to do any size deal. "The goal is not to have the traditional $3,000- to $7,000-a-month client," he says. "That's not going to make us a smash-bang division. I may not be able to broker the $200 million VW deal without the help of a big media buyer or an ad agency, but that's fine because we have the benefit of being associated with Ogilvy and WPP." Measuring value One place where PR shops do have an advantage over other marketing disciplines is the industry's familiarity with soft results. Unlike advertising agencies, which often live and die by such numbers as TV ratings, PR pros share more in common with the entertainment industry when it comes to appreciating the non-numerical nuances of these deals. Still, one of the most talked-about niches of the product placement industry is the growing number of companies looking for ways to quantify the results. The industry suffers from a glaring lack of hard data to support the value of these efforts. PR pros are all too familiar with the problem - finding the best way to measure ROI. While a product like Crest being featured throughout an entire episode of The Apprentice (teams competed to launch its new vanilla flavor) clearly raises buzz, there are no definitive measures for how it affects bottom-line basics, such as sales or brand reputation. That leaves marketers at a loss when trying to determine how much money a company should be willing to shell out up front to win such placements and how to later determine if it was money well spent. "We'll always remember Reese's Pieces in ET," points out Amy Willstatter, president of Bridge To Hollywood/Bridge to Broadway, which helped insurance company Aflac score a prominent placement for its duck icon in Lemony Snicket's A Series of Unfortunate Events and is now pioneering product placement in Broadway shows. "Does that make me buy Reese's Pieces instead of M&M's? I don't know." Although the need for valuation is clear, it's still a fledgling effort in a rapidly changing business. What should actually be measured is still largely up in the air - there is no industry standard or consensus on even what factors make a placement valuable or how that value should be understood in a marketplace used to 30-second commercial costs. And each player brings its own background to the equation. Should value be translated into what the deal would be worth in terms of commercial dollars, which would make the ad industry most comfortable? Or do focus-group results, more common to PR, make more sense? And the biggest questions of all are the criteria for judging. Some elements seem obvious, such as the amount of time the product is on display or if a major character interacts with it. Think of Seinfeld's George eating a Snickers with a knife and fork or having his Twix stolen by an auto mechanic - both clearly more valuable placements than simply having the product shown in passing. When it comes to creating and judging value, "integration is very important," says Frank Zazaa, who helped broker those Seinfeld deals and now runs iTVX, which offers a product placement valuation service. "You don't just write product placement [into the plot] and that's it." He points out that having a product written in as part of the story not only increases its value, but also is fast becoming the preferred method of creating integrations. In fact, those more complicated placements have spawned their own vernacular, and calling them simple product placements is something of an insult. They are "brand integrations," "branded entertainment," or other creative monikers that up them to gold status - and higher price tags - in this highly competitive arena. The big picture Other factors that affect a placement's value are more intangible, such as if the product was used in a way that could carry negative connotations. "It's sort of subjective," says Owens. "If you have a certain company's car being driven by the bad guys who are drug dealers, that is not necessarily a great placement," he points out, regardless of how visible or integrated the product is. However, some experts caution that trying to put a price tag on a placement misses the point of product integration - that it should be a part of a larger plan and a larger effort, and, therefore, the value can't be determined only from the placement itself, but also needs to take into account how well the company capitalizes on it. These other factors can include everything from supporting advertising to cross-promotional marketing with the entertainment partners. "If it's done right, it should be part of an overall strategy," says Michael Kassan, head of Media Link, which has helped with product placement deals for clients like Microsoft and American Express. Willstatter agrees and uses the Aflac/Lemony Snicket's case as an example. Aflac didn't stop with just the placement in the film. The company created a large PR effort around it, including regional screenings that affiliated agents could take clients to, a nonprofit tie-in, and a commercial featuring actor Jim Carrey. "It's about activating the deal," says Tardio. "To be successful [a product integration] has to have a tremendous amount of marketing expertise applied to it. Publicity and promotions are the two key ingredients." -------- New research companies Highlighting the rise in demand for such metrics, a plethora of new research companies has sprung up in the past year with methods for placing a value on product placements. Some rely on complex computer formulas, others on post-placement sales. Whatever the method, each points to the growing need of marketers to quantify and justify the growing costs of these kinds of deals. Here are some top contenders:
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