• by Wayne Friedman , Staff Writer, January 14, 2005

The New York Times announced yesterday that Volkswagen has signed a long-term deal with NBC Universal to tie their products to entertainment programs and events. If Volkswagen truly paid $200 million for primarily a multiyear product placement deal at NBC Universal, perhaps the German car company should shift into a business of making interest-free loans and gifts to entertainment companies - not automobiles.

The way the press reports it - especially The New York Times - you would think Volkswagen was paying $200 million to have its products placed in theatrical films and in NBC television programs.

Quite simply, there is no way that could be happening. If Volkswagen did pay that much it would be the biggest media buying and marketing mistake in entertainment programming in years.

Volkswagen will do what other major consumer products companies have done with movie studios, and what its predecessor Toyota Motors Co. did with Universal Pictures -- use the association of Universal Pictures' trademarks and logos of its theme parks and theatrical films to sell more cars.

The bulk of the $200 million will be spent on TV advertising, such as on NBC and on other TV networks and programs, to help supplement media buys for the openings of Universal Pictures.

If they get a car or two into a movie - that will be a bonus. But traditional placement - or even new wave product integration on TV -- is in no way driving this deal.

In return, Volkswagen will hopefully sell more cars because it will have a connection with, say the sequel of "Meet The Parents" or "Meet The Fockers." That's nothing new. A number of major consumer marketers such as McDonalds, Burger King, BMW, and General Motors do such deals with a number of studios for movies.

Oh yes, they might have some product placement deals on television - but not that much. That wouldn't make sense. Volkswagen spends almost $700 million in traditional media in the United States. Spending even $50 million per year, purely on product placement/integration deals would take years to accomplish.

That's because most product deals are for nominal amounts of money. Typically, higher price products, such as cars, come to the studios with no money exchanged because a free fleet of 20 cars at $30,000 each is enough of a deal for a studio in helping lower its production expenses.

Product placements deals can take months to arrange, unlike the quickness and fluidity of buying traditional TV commercial time, or print schedules in magazines - which can happen in a week or overnight. Additionally, the deal was struck with Universal Studios Partnerships, which is a group for theatrical features and Universal theme parks - not TV.

If Volkswagen really spends this much on product placement, we could call Universal Pictures the bus driver -- because, as is said during a basketball highlight on ESPN's "SportsCenter" -- they would be taking Volkswagen to school.