By Steve McClellan
Special to TelevisionWeek
Back in the 1950s, when television was just getting off the ground, sponsored programming was the primary business model for the fledgling medium. Shows like “Kraft Television Theatre” and “Colgate Comedy Hour” were household names. Advertisers owned and controlled the show’s content and even dictated scheduling if the show was hugely popular.
Now the model is back, albeit in modified form. In its revived configuration the sponsored show is not being embraced again as the primary model for doing business. Instead, it is seen as one way to supplement the 30-second commercial, which, while less effective than it once was, has been the model of choice for doing business in the ad-supported programming world for the past 30 years or so.
But the new wave of sponsored programming has swelled to the extent that it is rapidly being integrated into the media planning process. “Most clients either have been or are getting involved with it or have it on the planning table,” said Andy Donchin, senior VP and director of national broadcast at Carat USA.
The 30-second spot has come under a barrage of criticism in recent times as advertisers seek more bang for their advertising buck. The :30 has become less efficient over the past two decades as literally hundreds of new video programming options have become available to consumers.
More recently the 30-second spot has been targeted by consumers, who now have the technology to avoid commercials by surfing away from or fast-forwarding through them, and in some cases editing them out altogether from the programs they watch. It’s not surprising, then, that in a recent survey by the American Advertising Federation more than 75 percent of the respondents said they believe digital video recorder ad-skipping technology will have a dramatic effect on the landscape of TV advertising with continued growth of nontraditional ad formats. A minority of respondents, 21 percent, believe that the DVR may just kill off the 30-second spot altogether.
Anything’s possible, but most advertisers and agencies today are trying to figure out ways to alter their media mix while keeping :30s at the core. That’s why there is growing interest in sponsored programming, which typically involves some form of product integration into the content of the show.
Take Allied Domecq, for example. The spirits company has dabbled in simpler forms of product placement, in both film and TV, for years. But for the first time, the company has purchased a major sponsorship in a TV series. It’s a new show called “The Club,” now running on Spike TV. The show centers on the efforts of a hotshot Los Angeles promoter who is given the task of turning an independent nightclub in Las Vegas into a destination spot to rival the casino-owned nightspots.
“This type of sponsorship and integration has become part of the planning process,” said David Karraker, VP of communications for Allied Domecq North America. “In the world of electronic recorders, the ability to have brands integrated into the story line so you can’t be `TiVoed’ out is critical. But what’s really important for us is that it be completely organic and completely natural so that the consumer doesn’t feel like they’re being marketed to.”
Allied Domecq has seven brands featured in the program, including Canadian Club whiskey, Stolichnaya vodka and Malibu rum. And not just as bottles sitting on a bar. Canadian Club, for example, is the drink of choice of a group of the club’s bartenders during a friendly game of poker in their off hours. The “Stoli Chill Lounge” inside the club is the integration vehicle for the vodka. One of the featured DJs in “The Club” enjoys sipping Malibu.
Another sponsor of the series is Heineken beer. Julie Mulholland, who runs Los Angeles-based Mulholland Entertainment, which specializes in putting together branded entertainment packages for marketers, negotiated Heineken’s sponsorship deal for “The Club.” Ms. Mulholland said the primary objective for advertisers seeking sponsorships is different now than it was in the early days of TV, when advertisers frequently had complete creative control of the shows they sponsored.
Today, she said, “Their objective is to help create relevance within their target audience. It’s about borrowing equity from a programming environment that makes sense to their consumer and that makes them like the brand better.”
Sponsored programming is also opening up new opportunities to ad agencies, many of which are getting into the production of sponsored programming as a way of serving the needs of their clients better.
Agency veteran Robert Riesenberg has been producing such shows for more than two decades and opened up program production shops both for the Interpublic Group of Companies (Magna Global Entertainment) and, earlier this year, for Omnicom with Full Circle Entertainment. Full Circle is co-producing “The Club” with Reveille Entertainment for Spike TV. It was Reveille and Magna that brought “The Restaurant” to NBC in 2003.
While at Magna, Mr. Riesenberg also came up with the idea for “House Rules,” a series that aired on TBS that was fully sponsored by home improvement retailer Lowe’s. This year, in addition to “The Club,” Full Circle produced the cross-dressing reality show “He’s a Lady” for TBS and a Tim McGraw special.
One indication that sponsored programs are gaining momentum is the planned output from Full Circle this year-30 to 40 hours of new programs, several-fold more than the company produced in 2004.
And nowadays, while advertisers want their brands in shows, for the most part they don’t want to be producers, Mr. Riesenberg said. “What I’ve learned is to make it as simple as possible for the client,” he said. “We handle all the complexities of the production process and basically hand them a show on a silver platter.”
Both agency and client benefit in the aftermarket as well. “The Club,” for example, will be sold in numerous international markets with fees to be split by Full Circle and Reveille. Meanwhile, the client gets the benefit of the brand integration wherever the show travels. And increasingly, clients buy spots in those international markets as well.
The hardest questions to answer are what’s the return on such efforts and how to do you measure it. Ratings are just part of the answer. “The Club” has boosted its time-period average by 9 percent among men 18 to 49, according to a Spike spokesman.
At the end of the day, Allied Domecq’s Mr. Karraker said, “The question is, did the show communicate the essence of the brand? It’s a gut feel.”
Added Carat’s Mr. Donchin: “One of the harder things to get is a true objective measurement on all of this. But it’s definitely going to have more value than a 30-second spot that gets TiVoed away.”