• by Hank Kim , Richard Linnett , October 26, 2006

Meet our good friend Roy. We like Roy, but like most good friends he can be a pain in the ass. He's loud and crass; he tends to interrupt, doesn't listen, indeed essentially dominates the conversation. Sometimes we just want to slap him. But we can't do that, because our clients want him around. As a matter of fact, they like Roy more than we do.

Indeed, if it weren't for the client, we probably wouldn't bother to hang out with this dude at all. He's really got no class, no style. All he ever thinks about is numbers, man; he doesn't care about creativity, gut feelings, human emotions. He's like a freaking soulless machine.

Oh, yeah - we need to correct ourselves. Roy's name is actually spelled ROI. And as any self-respecting marketing maven knows, you can't live without this ROI fella. He's even running with the entertainment crowd - movie stars, agents, producers, the high-and-mighty shakers who introduce brands to the pizzazz of Hollywood.

Lately ROI has been bunking with Ben Silverman, Mark Burnett, and those crazy cats at Madison Road Entertainment - the guys who bestowed upon the world such priceless jewels as "Treasure Hunters" on NBC and those extraordinary brand integrations in "The Apprentice," "The Office," "America's Next Top Model," "Bernie Mack," and our personal favorite, "The Sports Illustrated Swimsuit Model Search."

In previous columns we've witnessed ROI rubbing shoulders in the world of advertising-funded programming and brand integrations. Let's have an overview, but first the following caveat: Our friend ROI is not the ROI of sales; he's the ROI of audience delivery. The branded entertainment crowd has yet to really crack the code of sales ROI. One day he will be our good friend, too.

In the meantime, back to the big picture. We learned from Van Vandegrift, CEO of Matrix, a Hollywood production and placement company, that if his clients do not get enough ROI after integrating their brands in his various projects - which range from D1 Drift Racing sponsorships to "Growing Up Gotti" on A&E - he makes good by integrating them into other projects with comparable demos on the Matrix slate.

For example, when a season of "Blow Out" on Bravo didn't blow away his client, he integrated the brand as a make-good in a New Line Cinema feature film with a strong female demo. Of course, some people might call that old-fashioned bait and switch, but hey, you didn't hear that from us.

And then there's Reveille Production's Ben Silverman, producer of such brandertainments as "The Restaurant" and "Meet Mr. Mom," who told us that he has convinced cable network ad sales groups to offer audience guarantees on his product-integration deals that include media buys.

Over at Madison Road, they're working on a model that we think is the most sensible of all.

"We've developed a pay-for-performance model that takes into account how involved the brand message is in the program and the level of integration and we assign a CPM that is either a multiple of or a fraction of 30-second spot," says Brett Lyons, senior vice president of brand development and integration at Madison.

In other words, clients pay cash-on-delivery after the program airs with the integration. If the integration makes its audience numbers, the client pays. If not, they pay according to delivery. "Sometimes things end up on the cutting-room floor or the show doesn't even air and the brand doesn't get any delivery," says Lyons. "So they don't pay for it. They pay for exactly what they get. There is absolutely no risk."

Lyons points out that the idea of providing make-goods in branded integration is problematic. "When production wraps, it's all done. You can't say, 'Hey, can you give me a few more of those integrations?' It's finished."

Not surprisingly, Madison Road is also diving headfirst into the steamy debate over branded entertainment measurement and valuation. "We are looking to partner with a few major advertisers to look at the impact of integrations," says Lyons. "We're not just looking at onscreen airtime based on seconds, but in a pre- and post-study looking at the effect on viewers of the messaging of brands that are being integrated into storylines."

Lyons says Madison Road is studying the effects of brand messaging in the first season of "Treasure Hunters" and will roll out findings in the first quarter of 2007.

It looks like ROI has a new buddy, and his name is not Siegfried.

Hank Kim and Richard Linnett are directors at MPG Entertainment. (hank.kim@mpg.com and richard.linnett@mpg.com)