• by Paul Gough , September 10, 2003

Conventional advertising CPMs may be a good starting point for determining the return on investment of product placements, but a panel of industry leaders said it may require an entirely different metric to get at the true value of these increasingly popular plugs.

In fact, ROI was the major focus of the Kagan World Media conference on sponsored programming and product placement, which was held Wednesday in New York.

The forum, which drew media buyers and content providers from the United States and Canada, tried to home in on the value that should be placed on placements and sponsorships. The conclusion: Its value depends not just on the spot itself but how well it belongs in the TV show or film and its integration within a campaign.

While a lot of people know about the placement of Reece's Pieces in "ET," AOL's presence in "You've Got Mail" or the more recent demolition of dozens of Mini Coopers in "The Italian Job," it's seeped into television on sitcoms like "Seinfeld" and "Everybody Loves Raymond," and the surge in popularity of reality shows.

Guy McCarter, director of Omnicom's OMD Entertainment unit, said the trend toward placement and sponsorship has come from advertisers' wanting to get more value for their ad spend.

"Our clients are asking for exposure beyond the 30-second spot," McCarter said.

For OMD's clients, that request has been fulfilled in the "Pepsi Smash" music series on The WB and Sunday's "Play for a Billion" sweepstakes; Cingular's work with MTV's Video Music Awards and an integration of Kay's Jewelers into a dream sequence on ABC's "The Bonnie Hunt Show." OMD also brought Mountain Dew and Doritos into a reward program on the first "Survivor."

At Interpublic's Magna Global Entertainment, vice president/associate director Tracy Dorsey said her company is still determining what works and what doesn't in the field of product placement and sponsorship. Magna Global's recent efforts include the Emmy-winning Johnson & Johnson-branded original film series on TNT and bringing product placement to NBC's summer reality series "The Restaurant." But she said that one thing's for sure: Product placement isn't the be all and end all. It's part of the whole.

"Product placement is just one tool in the overall marketing package," Dorsey said. "We look at the bigger picture."

McCarter said that product placement's role is to complement a larger deal, one that includes traditional spots as well.

"When you build those larger deals, you want the effect integrated and you want it to be close to your spot," McCarter said.

Frank Zazza, a veteran marketer who has more than two decades of experience and whose company, iTVX, tracks and measures product placements, said it's important to tie it into other promotions. He said the strength of the Reece's Pieces placement wasn't just that it was in "ET" but that it was part of a larger campaign that included TV spots.

"The product placement without a promotion really goes unknown and unseen," Zazza said. "Don't just do the product placement and forget about it ... It's very, very important that we now look at product placement as a tool for the building of the final product."

But determining the value is difficult and is only now getting the attention it deserves. Dorsey said that the placement has to serve the brand's goals, just like other parts of the campaign. But the evaluation methods that go into valuing a conventional spot can't be used to determine product placement ROI.

"Product placement is very subjective," Dorsey said. "Third seconds of screen does not equal a 30-second commercial."

Zazza's company, iTVX, several years developing a process that tracks and measures product placement. Since some level of subjectivity is involved, the process isn't as simple as getting a rating for a show. But iTVX's goal has been to chip away at the subjectivity to reveal cost and exposure data.

Joel Henrie, president of Motion Picture Placement in Los Angeles, said product placement is about 100 times cheaper than the typical 30-second spot and does provide value.

"I think we all know it's there," said Henrie. "We just don't have the Stanford Research Institute measurement to back it up."