The threat is the personal video recorder. The question is: Do marketers try to beat the devices, or join them?
“The genie is out of the bottle,” said Rob Kennelly, agent-TV packaging for Creative Artists Agency, during last week’s Madison + Vine conference held at the Beverly Hills Hotel. “We should be able to figure out how to bring brands closer together.”
But Jamie Kellner, chairman and CEO of Turner Broadcasting System, said PVRs are destructive to the TV business, contribute to lower ratings and lower advertising revenue and result in fewer quality programs for TV distributors. He criticized Mr. Kennelly for buying into the notion that branded entertainment will be the savior of the TV business. “I think you are drinking the Kool-Aid.”
“What drives our business is people selling light bulbs and vacuum cleaners in Salt Lake City,” Mr. Kellner said, speaking at the conference’s Return on Investment Accountability panel. “If you take even a small percentage away, you are going to push this business under profitablity.”
“I’m not against technology; I’m against the idea of a free lunch,” he said. Viewers will have to pay for TV if advertising drops as a result of commercial-skipping, he added.
Brodie Keast, senior VP and general manager of TiVo, said 60 percent to 70 percent of people watching TiVo-recorded programming are skipping commercials. But TiVo isn’t just about skipping ads, he said. “It’s the byproduct of how people change their viewing habits. It’s the idea that you’re never going to miss your favorite show, and that you’ll try new shows.”
Bruce Redditt, executive VP, Omnicom Group, said many branded-entertainment projects proposed as a remedy to PVRs are limited to the largest U.S. marketers, who can afford the commercials. “How do you sell a mattress factory or Tidy Bowl?” Mr. Redditt asked.
Another issue is the inability to accurately measure the effectiveness of branded-content deals. “It’s a CPM at a premium,” Mr. Redditt said. “Accountability is something Hollywood has a hard time with.”
From the audience, David Lubars, president and executive creative director for Publicis Groupe’s Fallon North America, creator of BMW’s Internet Films, suggested that viewers still see commercials when fast-forwarding, and that there is value there.
Mr. Kellner then addressed Michael Browner, executive director, media and marketing operations, at the nation’s largest advertiser, General Motors Corp., who was in the audience: “We’ll have to fast-forward your commercials double-time.” Countered Mr. Browner, “Then we’ll simply cut the check half-time.”
But it was clear that those crafting the next wave are learning to ride some rough currents.
In another panel, “Where Do You Draw the Line,” one of this TV season’s failures, ABC’s offbeat drama “Push, Nevada,” was discussed. Sprint PCS and Toyota Motor Sales USA were major marketing partners in the project, which included product placement.
“If it had taken off, it may have been like BMW Films,” said Steve Sturm, VP-general manager of Toyota. Part of the problem, Mr. Sturm said, was that Toyota was promised high-profile guest stars to appear in the drama, produced by Ben Affleck and Matt Damon. “The stars were low-list [talent],” he said.
`Most of it fails’
TV network deals have their own headaches with product-integration deals, especially when it comes to the success rate of new shows. “You have to accept that most of it fails,” said Jordan Levin, president of entertainment for The WB Network. “Ultimately, you are betting with your gut.”
There’s also no guarantee of total success. “If there is one grand slam over the seven-year relationship, then everyone is happy,” said Lori Sale, executive VP, worldwide promotion, for Miramax Films, which inked a multiyear promotional deal with Coors Brewing Co. that included having the beer’s logo displayed at major Miramax film openings. As part of the deal, Miramax filmmakers don’t have to use Coors when beer is shown; but if they don’t, they need to use a fictional brand.
The conference stirred passionate talk about new marketing models for how consumer-product companies could work with content companies.
“The message was that these communities have to work together,” said Cindy Hauser, head of broadcast and new-business development at Ant Farm, a Los Angeles entertainment ad agency. “There wasn’t a lot of pussyfooting around.”
Setting that serious tone was a keynote address by Steven Heyer, president and chief operating officer at Coca-Cola Co., that received perhaps the best response for its assertion that there’s a new game in town. “It was articulate, it had an edge, it was a home run,” said Ms. Hauser.
At least one participant said the convergence talk is just a new spin on an old topic. Bob Levin, an entertainment-marketing consultant and former president-worldwide marketing for MGM Distribution Co., said, “If I hear the word `organic’ one more time, I’m going to start a garden. This is no different than when Dinah Shore sang years ago, `See the USA in your Chevrolet.”’
The Advertising page is edited by Louis Chunovic, who can be reached by phone at 212-210-0233, by fax at 212-210-0400, or by e-mail at lchunovic@crain.com.