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Branding Deals Gaining Cachet

Jan 3, 2005  •  Post A Comment

It was once called “product placement” and was all about providing products and merchandise to prop masters on TV shows so that they could show up as part of the environment of a show.

Last year, the new world of “product integration” came of age. Now the deals are more complicated, often involve high fees and are done with network sales departments, which often expect the companies to buy ad time as well.

No producer has done more to advance these kinds of branded entertainment deals than Mark Burnett, most recently with “The Apprentice” on NBC. This past season the show’s partners in integrated marketing deals included such major players as Procter & Gamble, Levi Strauss & Co., Masterfoods and Pepsi-Cola.

Product integration deals for “Apprentice” brought in sky-high $2 million to $4 million fees for each product that was integrated into a specific episode. Among the products were a new flavor of Crest toothpaste, a new M&M brand candy bar and an effort to design a new can for Pepsi Edge.

“The Apprentice” raised the bar for product deals, which were previously priced, on average, in the range of $125,000 to $250,000 per episode for a typical broadcast or cable show.

The integration business grew in other ways as well. As many as 30 or more network and cable shows have established themselves with healthy ratings offering producers significant product integration deals. These shows include Bravo’s “Blow Out,” UPN’s “America’s Next Top Model,” NBC’s “The Biggest Loser,” Discovery Channel’s “Monster Garage” and A&E’s “Growing Up Gotti,” all of which will have new episodes this year.

“This was a big year in terms of branded entertainment becoming more prolific-across many networks, across many different programs,” said Tom Mazza, president of Madison Road Entertainment, whose company put together a number of deals for NBC’s “The Apprentice,” UPN’s “America’s Next Top Model” and others.

“It was a explosive year,” said Van Vandegrift, executive producer for Matrixx, another integrated branded entertainment company that has done work on NBC’s “The Biggest Loser” and “The $25 Million Dollar Hoax.”

“There are so many more opportunities,” he added. “We did more shows in the last two quarters of 2004 than in the first three years of our business.” For 2005, Mr. Vandegrift said, Matrixx is working on more than 20 projects.

Even second-year shows such as ABC’s “Extreme Makeover: Home Edition” are breaking new ground. Sears Roebuck & Co. now has a major presence in “Home Edition,” a show that remodels a home free for a family in need. The show’s ratings have risen significantly for ABC on Sunday night.

CBS’s “Survivor,” the granddaddy of reality shows and a driving force in branded entertainment, broke some new ground as well in 2004. In “Survivor: All-Stars,” Procter & Gamble integrated what is believed to be a record number of products by a single company, 15, into one episode.

As a result of these successes, networks are restructuring some deals. For instance, due to its success, the second season of Bravo’s “Blow Out” will be a cash license fee series. That means Bravo now gets to sell all the lucrative advertising time.

The first season was an all-barter show, meaning no cash exchanged hands between the producer, Ben Silverman’s NBC Universal-based Reveille Productions, and Bravo. Instead Reveille got half the advertising time, which it sold to Magna Global Entertainment clients American Express, Revlon and Luxottica Group’s LensCrafters.

Similarly, CBS structured the first season of “Survivor” as a barter deal with Mark Burnett Productions. But after its success, CBS went to a cash license fee arrangement, and now controls all advertising time.