Home Depot Makes ‘Splash’ on HGTV

Scripps, Long Resistant to Integration, Signs Series Sponsor

By Jon Lafayette

Scripps Networks is gradually embracing integrating sponsors into its programming after a long holdout.

Home Depot has agreed to sponsor the series “Color Splash” on Scripps’ HGTV this season. As part of the deal, a special Valentine’s Day episode of the show will include a scene shot in a Home Depot and will feature the hardware chain’s associates dispensing advice.
Home Depot also will sponsor a sweepstakes with a top prize of a $40,000 kitchen makeover using products found in the store.

It marks the first time a sponsor has been so heavily involved in a show on one of Scripps’ major networks.

Home Depot is one of HGTV’s biggest advertisers. In the first 11 months of 2007, it spent $12.7 million on HGTV out of the $89.6 million it spent on cable overall, according to Nielsen Monitor-Plus. Home Depot also spent $172.5 million on network, syndication and spot advertising.

It is one of many clients that have seen studies from IAG Research showing that as commercial-skipping using digital video recorders increases, a more immersive approach to TV advertising enhances the likability and recall scores of a campaign.

“Over the course of the year, we have wanted to do something that went above and beyond running television spots and billboards, so as we moved into the 2007-08 discussions, the opportunity to integrate with ‘Color Splash’ came up. We really got excited about it because Scripps had not typically considered those types of organic product placements and integrations,” said Christi Korzekwa, senior director for media and partnership marketing at Home Depot.

“We were pleasantly surprised,” said George Newi, senior VP at Initiative, which handles media buying for Home Depot. “Scripps has long held that their programming should be less influenced with product placement.”

Jon Steinlauf, senior VP for ad sales at Scripps, said many of the company’s clients, large and small, have said they’d like to be involved in its networks’ content.

“When we talk to companies that are doing lots of business with us, and they say to us we would love for you to consider x-y-z, we’d be foolish not to listen,” he said. “I think as a programmer and a marketer, we have to be sensitive to the ever-changing marketing objectives of our clients.”

But he added the company was taking very small steps.

“We’re not open for business for integration every night, every show. We’re open for business with integration on an extremely selective basis,” he said. “If there’s a violation of the contract we have with our audience to provide a brand with integrity, to provide objective information about the choices that we make in shows, then I think you’ll find us backpedaling away from this. The trust we have with our audience about our brand is more important than anything else.”

As more networks embrace product placement, the government is taking a closer look at the practice. The Federal Communications Commission is considering drafting new regulations for product placement. The ad industry is asking the commission to hold hearings before taking any action. Scripps has been an advertiser favorite because its networks are tightly focused and attract highly engaged, high-income viewers.

It has long been active in creating sponsored vignettes featuring sponsors’ products in commercial breaks. Those vignettes have been shown to significantly increase recall for those advertisers.

“We’ve built a very successful network without having to rely upon integration into content because we do so many other things for advertisers,” Mr. Steinlauf said.

But in recent years, Scripps has been slowly wading into product integration.

“As the years go by, we go into planning sessions with our networks, all five of our networks, and we talk about the i-word: integrations,” Mr. Steinlauf said. “So many other networks have done integration for many years in some of their top shows, a lot of reality shows, but we’ve resisted it. But we’ve had a few exceptions.”

On HGTV, sponsors take part in its sweepstakes program, such as its “Dream Home” specials. If a sponsor’s product is used to build the home, the designer mentions the product and talks about its merits.

Scripps’ smaller networks, Do It Yourself Network and Fine Living, have been doing an increasing amount of sponsor-driven programming.

The Valentine’s Day episode of “Color Splash” will premiere Feb. 10, a Sunday night; the show usually airs Saturdays and Monday. It will be rerun several times until Feb. 14. Home Depot will have commercials and vignettes in the show. Over the course of the season, Home Depot will have category exclusivity and be the sponsor of the show’s Web site.

Mr. Steinlauf declined to say how much extra Home Depot was paying for the integration.

“I would say there are some premiums associated with doing this that are new to their deal,” he said.

Ms. Korzekwa said, “Any time a network provides opportunities that are mutually beneficial to us and provides us with exposure that is unique, you’re going to find us wanting to support that in a financial way, in a more assertive and aggressive way.”

Home improvement is a big category for HGTV and DIY, but Mr. Steinlauf said the networks haven’t suffered in either viewership or ad revenue because of trends in the economy.

“Some people have compared the housing slump of these last couple of years to the stock market bubble of the beginning of the decade and said, ‘Isn’t HGTV going to be to this period of time what CNBC was [then],’” he said. But even if people can’t sell their homes, they’re still tuning in for ideas to make them better places to live.

“We’re having a great start to 2008 on both networks in terms of sellouts and pricing and revenue pace,” he said.

Ira Teinowitz contributed to this story.

Monday, 10:40: Corrected spelling of Jon Steinlauf