Ready, Fire, Aim! - Mihail's Public Blog: Get placement, forget ads

Monday, June 20, 2005

Get placement, forget ads

With product placement taking off within television programs, where companies pay the producers of those shows to include them and realizing that they don't need to also advertise on the networks or cable channels carrying those programs. According to this Wall Street Journal story (subscription required):

Instead, the program's producer, reality show impresario Mark Burnett, received SLS stock options with a current value of about $100,000. CBS was cut out of the equation. SLS isn't buying traditional commercials on the show and hasn't dealt with CBS for the program, says SLS Chief Executive John Gott. With the sort of exposure SLS products will get, traditional commercials "probably won't be necessary," he says. The show is scheduled to air July 11.

...As a result, product placement may take money out of the broadcast networks' pockets, says Rino Scanzoni, chief investment officer of WPP Group PLC's Mediaedge:cia, an ad-space-buying firm. He estimates that in the recent negotiations with broadcast networks for the coming prime-time TV season, advertisers shifted between $100 million and $125 million out of traditional ads into fees associated with product placement. Advertisers have in recent years committed $9 billion to $9.5 billion for ad time in this market.

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