New TV Ratings System Tracks Product Placement, Sponsorship

Like the growth of product integration deals, there doesn't appear to be any shortage of companies trying to measure the value of the hot new media strategy. Intermedia Advertising Group (IAG), the New York-based firm best known for measuring the popularity of TV ads through a panel of online TV viewers, Monday unveiled plans to enter the burgeoning field of product placement.

The yet-to-be-launched service, IAG In-Program Performance, will assess both the recall and viewer attitudes toward product placements and sponsorships IAG currently measures network primetime along with MTV, USA Network and TNT. By the middle of 2004, the company plans to extend measurement to the top 10 rated national cable networks. IAG began surveying at the start of the TV season last month.

The system looks at, among other things, the type of product and whether it's mentioned, shown or both; whether the product is shown in the background or foreground; its duration of time on screen; whether it's embedded; how many program segments the product appears in. It also takes into account whether the central character or a bit player uses the product and, perhaps most interestingly, whether viewers see the product placement as positive or negative to the brand in the context of the show. The survey question asks whether, on a scale of one to five, the viewer is favorably inclined toward the product's presence within the program.

"That question sums up the debate that's been going on for two years over how to measure product placement," said Alan Gould, co-chief executive officer at IAG. "You obviously need a way to measure recall. That's the first step, just like with traditional advertising. The second step is, does it fit, does it work, is it natural, because you can have a placement that may break through and people will recognize it and recall it. But they may be so put off by the fact that it doesn't really fit within the content, which is the main reason why they're watching."

IAG has more than 40 syndicated clients for its ad performance studies. Gould said IAG's clients had been asking for a way to measure product placement outside the context of CPM. IAG will be collecting the information every day, which will help build a base of knowledge.

"They want to understand recall, they want to understand fit," Gould said. "They all have ways to work with the data to get ROI themselves. Everybody places different values on certain types of advertising and what it does for them. What they've asked us to provide them is hard recall and fit measures. In essence, we've been asked to create transparency." Gould said the IAG's survey doesn't claim more than that.

IAG's effort is one of several in the industry to quantify product placement. Another company, iTVX of New Rochelle, N.Y., has about a two-year headstart. Founder Frank Zazza, who has more than two decades worth of product placement experience, has been turning heads with his company's approach to measurement. He's done countless demonstrations to agencies, advertisers and industry groups, most recently at a Kagan conference on product placement a month ago in New York City.

Zazza said that iTVX has been chipping away at what he calls the "subjectivity" issue, creating an actual valuation based on dollar value. There are now 45 parameters and it's more than just audience recall, he said.

"What we have done is find out all the parameters that are necessary for evaluating product placement," Zazza said. He also points to the need for further research, not only from advertisers and agencies but also from academics who can help get at the answers as well. Zazza's company has held discussions with professors from the University of Texas and the Wharton School of Business at the University of Pennsylvania.

Isabella C.M. Cunningham, chair of the department of advertising at the University of Texas at Austin, said that the measurement of product placement is still in its infancy although product placement itself has been done for decades.

"There's nothing new about product placement," she said. "The only new thing is that people have started to worry about measuring it and finding the relative value."

Students and professors at the University of Texas are also doing a lot of research on the topic of product placement. Cunningham said there hasn't been a lot of research into attitudes toward the placed products, and that's one area that the University of Texas is working hard. One question: If a product has a negative attitude in the mind of the public, does placing it in a program that has high likeability change the viewers' attitudes toward the product?

Cunningham said research needs to be done into the product placement's role in the media mix, whether it works better if the advertiser places commercials at the same time or on different channels, and what the best role for print media is joined with product placements.

Steve Sternberg, director of research at MAGNA Global, said that while an incentive system like IAG's Reward TV may have some value in limited situations, an objective approach would be better. Agencies would want a representative sample.

"Product placement should not be the centerpiece of any strategy, but rather must still be seen as added value, until there is adequate research to place a 'value' on various levels of product placement," Sternberg said.

Sternberg said there is right now no basis to place a fractional value of a 30-second commercial on product placement.

"With commercials, you're paying for a message, not just an appearance," he said. "Whatever value is finally determined will vary significantly based on the level of product integration into the show."

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