29 June 2006

More Ad Pitches Could Get Embedded

The already hazy line between entertainment and advertising is about to get blurrier.

Commercial products could pop up more frequently than ever in TV shows, movies, music and video games with the introduction of an eBay-like website that gives buyers and sellers a simple, one-stop marketplace for deals.

"To date, product placement has been opportunistic and Rolodex-based," says Hamet Watt, CEO of NextMedium, which launched the product placement marketplace it calls Embed. "We're trying to create a real business. Our goal is to establish brand integration as an ad category."

His Los Angeles-based firm is hitching its star to one of the hottest forms of entertainment advertising. Lots of companies see product placement - the product appears on and might be written into a story or game - as an effective way to reach consumers who increasingly use digital video recorders and other devices to avoid commercials.

Content makers like the extra revenue. David Norton of Reveille - which makes and distributes The Biggest Loser, Nashville Star and The Office - says the company assigns a producer to each show specifically to be sure brands are treated well.

The number of broadcast TV product placements in prime time grew 30% in 2005, vs. 2004 says Nielsen Media Research's Annie Touliatos. The time devoted to them rose 21%. While the price is generally not disclosed, she estimates that companies' placement airtime would have cost nearly $2.3 billion last year if it sold for prices comparable to conventional commercials.

NextMedium says that it's providing the first marketplace where producers can let a broad array of potential buyers know what kinds of placements they're willing to take. For example, they might allow products to appear as props or part of a character's wardrobe, to have them mentioned in dialogue or given away as a reward in a game show. They also can offer sponsorships.

Buyers can check out data such as a TV show's ratings and what other products are already being featured in a production.

Buyers and sellers then can indicate what they think a given opportunity is worth.

Embed is open to those who pay a subscription fee. NextMedium also gets a fee for each transaction.

Watt says the site will keep deals confidential. "To feel organic, it can't be publicized that the brand paid for placement," he says.

That's exactly what worries critics of this trend.

"Undisclosed product placement is dishonest advertising," says Gary Ruskin, executive director of activist group Commercial Alert. "We're trying to get Congress to pass legislation prohibiting undisclosed product placement."

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