Madison In-Kind: Where's the Real Money in Product Placement

With so much focus on product placement these days, I ask the simple question: Where is the real money? Many TV business stories don't reveal much about what the growing business of product placement and brand entertainment exactly means to TV producers, marketers, and networks in dollars and cents.

For most advertisers, product placement is still a vanity license plate - having very little to do with the actual driving of product or extending media and marketing plans.

For virtually all TV producers, product placement fees are small or non-existent. For third-party middlemen who exist between the worlds of Hollywood and Madison Avenue, it's still a shaky business with few rules, little protection for marketers, and no sustaining business plan.

Media agency MindShare USA didn't come up with "The Days" on ABC this past summer because of product placement for its clients. It needed a good show for its clients to run in, and to make some money.



The exception to these rules is probably with the Mark Burnett-produced show - "The Apprentice." If press accounts are to be believed, "The Apprentice" set marketers back $1 million for each product placement this season. For that tidy sum, one product or company will be heavily featured in the better part of the 43 minutes of content in each episode. That's a lot of product exposure.

If each "Apprentice" episode costs $2 million to produce, each product placement deal will pay for half the production costs. That's not bad. Young business Turks will design and sell a new Mattel toy and later try to come up with a new jazzy marketing plan for Procter & Gamble's Crest brand.

Still, where the floss?

Virtually no show can command this kind of placement - or "integration" - fee. How many "Apprentice"-like shows can exist on the schedule to promote products this way? Shows such as "Survivor" or "American Idol" don't give up that much content time to marketers. They can't. It wouldn't make good TV.

CBS, ABC, NBC, and Fox could all become "business" story and show networks. "Joey" could work at a real Starbucks while looking for acting work. "ER" might use some real Johnson & Johnson branded bandages in every episode. Still, you better have some comedy and drama lines to show for it - not just reality blather. TV viewers can be fickle.

The real financial key isn't in the product placement. That's just the tease. Networks need clients to buy advertising time. Without the billions of dollars in advertising the networks need to run operations, it's not worth airing those shows.

With the coming of TiVo and the fear of TV viewers skipping commercials, it's in the networks best interest to let advertisers play along. But in the long-term, if networks can't run shows, product placement won't be the savior. Something familiar might be.

We'll be stuck with something much less satisfying - little art, too much commerce, and some hard bodies.

We'll all be bowing to Bowflex.

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