• by Hank Kim , Richard Linnett , October 31, 2005

Basking in the last rays of an Indian summer sun on the outdoor terrace at the Bryant Park Grill in midtown Manhattan, Van Vandegrift, CEO of Matrixx, a Hollywood production and product placement company, cocked his angular glasses to get a better view of the passing celebutants. "It's the Gastineau Girls!" he gushed, as indeed the glittery mom-daughter duo flitted by with their E! Entertainment camera crew in tow. It was Fashion Week in New York, and one couldn't fault Vandegrift for being distracted. Unfortunately, the table discussion took a decidedly unsexy turn. Some killjoy had to bring up the issue of audience guarantees and make-goods in product-integration deals.

Many advertisers are cautious about doing branded entertainment deals because they are reluctant to shift ad budgets away from guaranteed up-front television deals. To help clients overcome their fear, a few innovative producers are now offering make-goods on branded entertainment deals, and Vandegrift is one of them.

If producers want to thrive in this brave new world of branded entertainment, says Vandegrift, "They better check their 'take the money and run' attitude at the door." While it may be tough work arranging advertiser reparations, according to Vandegrift, willing producers can "forge long-term relationships with clients that leave them with a positive experience, an exchange of value."

Of course, it's relatively easy for networks to offer make-goods; they simply give advertisers available ad inventory on their schedules. But producers generally don't own ad inventory, so what do they have to offer?

Here's where Vandegrift gets creative. If a program in which a brand appears doesn't deliver the contracted X number of verbal mentions and Y number of visual occurrences, Vandegrift and his team integrate the advertiser into the next slate of episodes. For example, marketers at Alienware, a Matrixx computing client, were not satisfied with their brand integration in season two of the A&E show "Growing Up Gotti." So Vandegrift and his team "modified [and transferred] the integration agreement to season three," he says.

If a program is not renewed for additional episodes, Vandegrift will shift a client to another production with similar demographics. For example, Vandegrift and his crew had secured integration in the original season of Bravo's "Blow Out" for their client Fuze, a beverage brand targeted mainly at women. At the eleventh hour, the deal fell through, and the client had already incurred significant shipping expenses. A nimble-footed Vandegrift quickly shifted the brand over to a New Line Cinema feature film "The Scorned," also targeted at women. As a result, Fuze will get exposure in theaters, in a subsequent cable broadcast on E! Entertainment, and in the DVD release. Both the Alienware and Fuze deals were not contingent upon a media buy, which made these deals easy propositions compared to guarantees that involve an ad sales component.

Ben Silverman, the irrepressible producer of such brand-supported shows as "The Restaurant" and "Meet Mr. Mom," both on NBC, has pioneered a new model. He and his outfit, the NBC Universal-backed Reveille Co., have convinced network ad sales in some instances to offer audience guarantees on production-integration deals that include media buys.

Silverman's way of doing business, as many people already know, is to create programs funded by advertisers whose brands are integrated into the content. He waives network license fees and controls half the ad inventory for his advertiser clients. Lately, he's been offering advertisers guarantees as part of the package.

Silverman understands how nervous advertising clients can get about committing big budgets to nontraditional ventures. He told us that for integration deals on cable attached to a significant media buy, his make-goods could take the form of spot inventory on the network. That is, of course, as long as the network agrees.

"Whenever I can, specifically in cable, I'll offer make-goods," Silverman says. By going the extra mile to allay client fears about branded entertainment, guys like Silverman and Vandegrift can move the needle forward significantly, both in the business of deal-making and in creating accountability where little to none existed before.

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