Is It Worth the Price?

by Evan Fleischer, Oct 22, 2002, 12:00 AM

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Fox’s American Idol has set a new TV ad rate record by setting the price for an integrated marketing and sponsorship package at $26 million, the highest ever for a reality show. Is the price worth it?

Renewing advertisers Ford and Coca Cola seem to think so. What they got in exchange for their sponsorship last season was heralded as an example of "groundbreaking sponsor integration." But, was it truly groundbreaking? Will what they get for sponsorship of the sequel be worth the money they are laying out?

Let’s take a look at what they’re getting for that money. Last season they got the judges drinking out of Coke-branded cups, the contestants waiting to go on in the Coca-Cola “red room,” pre-taped segments with the contestants titled “Coca-Cola Moments,” and contestants using Ford’s Focus as the vehicle of choice during taping. That sponsor integration is certainly effective, but is it really groundbreaking? And is it worth the price?

There’s no denying that American Idol is a big hit. But, let’s just think for a moment about the money being spent here. Let’s assume that Coke and Ford are getting a renewing advertiser rate that is significantly below the $26 million asking price. For argument’s sake, let’s say that they are each paying $15 million (which I think is a conservative estimate), for a combined total of $30 million dollars. THIRTY MILLION DOLLARS! Granted, in addition to their product placement, that money buys the sponsors 55 spots across the 15-week series, plus licensing, Internet exposure, some other added values, the title "Official Sponsor of American Idol," but any way you look at it, that’s a lot of money.

With $30 million Ford and Coke could produce their own reality TV show. Here’s an idea: 6 teams of two travel across the country in Ford Focuses with only Coke products to sustain them. Now that’s interesting TV. How about a reality show that follows the lives of 8 strangers picked to work in a Coca Cola bottling plant, or on a Ford assembly line? That has much more to do with the reality most people face than does the prospect of becoming a pop star.

Obviously, neither Ford nor Coke will produce their own reality TV show, but they should be able to get more for their money from American Idol. They should be able to get something that is trulygroundbreaking.

Honestly, the “red room” was an interesting way to integrate Coke. The style of the room reflected Coke’s brand rather well, and they got exposure on a top rated series spread out over months. This is how integration should work. But, is it groundbreaking? I think not.

It will ultimately fall to the viewers of American Idol to decide if what sponsors are paying is worth it. It will be up to the viewers to decide if the ways in which sponsors have been integrated are too annoying, or if they are truly groundbreaking enough to influence buying habits. And after all, as long as the ratings hold up, American Idol can charge whatever they want.

Some television shows wait a lifetime for a moment like this.

Evan Fleischer is a junior partner and co-founder of the michael alan group. He can be reached at evan@michael-alan.com

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