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Initiative Puts Value on Placement

Aug 22, 2005  •  Post A Comment

With marketers putting more of their TV dollars into integrated advertising and product placement deals, the ad buying firm Initiative says it has developed a system that can guide planners in assessing the value of an integration opportunity.

Initiative Executive VP and Director of Futures and Technologies David Ernst said the tool, dubbed PreSENSE, is being used both to analyze the impact of integrations after they run and to predict the value of integrations being proposed by networks and production companies.

The agency has been gathering research on product integration and product placement for about three years and has been working on PreSENSE over the past six months to help its clients.

“It’s becoming a big, important aspect of their arsenal in terms of how they can communicate with consumers, and it’s important for us to be able to evaluate and place a value on these types of communications,” Mr. Ernst said.

Already, PreSENSE has been used to forecast the value of integrations in the upcoming broadcast season, he said.

“It gives us a very good understanding of what the value is in terms of what is being asked by our clients,” Mr. Ernst said. “Some people have some notions of how valuable integration is that are not grounded in anything, other than the fact that it’s popular right now. We’re finding out that on average a product integration can generate the relative value of what three, maybe four 30-second ads could do.” Most people, he said, “carry around in their heads a much higher value than that.” He added that integrations offer a “tremendous value if you have the right show, the right audience and the right execution.”

PreSENSE basically works by comparing the impact a product integration has on consumers to what it would cost using traditional commercials to achieve similar results.

“We really felt we had the kind of databases and tools and knowledge about the way television works and the way communications impact consumers that we could take another step and go into more nontraditional forms of communication and measure them,” Mr. Ernst said. “We’ve done so much research that we’ve developed a database that we’re able to use to help us forecast, based on the type of integration, the amount of different elements and the kind of impact we expect to see playing out in the market.”

PreSENSE becomes a tool not only to decide how much each of a number of product placement opportunities might be worth, but to weigh them against spending money on more traditional advertising.

“Each has [its] role. We’re just trying to understand what the relative value would be,” he said.

PreSENSE evaluated integrations by looking at metrics, including the program rating, the duration of product placement activity, the cost of a 30-second spot in the same show and the type of placement a product gets. Is it only visual, or is the product also mentioned? Are there endorsements of the brand by people within the show? It also weighs brand impact based on custom audience surveys that the agency conducts. These surveys have helped the agency understand the relative value of what has worked in past integrations and establish benchmarks for future integrations.

Initiative generated numbers for integrations that appeared during the past season of “The Apprentice.”

Burger King’s appearance on the show generated a 63 percent recall score over 429 seconds. PreSENSE values that at $4.2 million, equivalent to 11.3 30-second spots, based on figures from TNS Media Intelligence/CMR. At the same time, Sony generated 66 percent awareness over 192 seconds, a package with a value of $2.9 million, according to PreSENSE.

“We’re taking not only the number of seconds in the integration, we’re looking at it by element, what actually occurred,” Mr. Ernst said. “Were people talking about the Burger King brand, did you see a logo, are you actually within a Burger King, do you see a Burger King cup?

“All of these different elements have different impact factors that we’ve derived through all of our research studies. Then we go further and ask consumers, Did you identify the Burger King brand within the episode?”

In looking at the results PreSENSE has generated in analyzing product placement, some conclusions can be drawn about their impact.

Initiative has found that the range between a very successful integration and an unsuccessful one can be huge. “It’s much more volatile than advertising, so you see higher highs and lower lows,” Mr. Ernst said. “One thing that is clear, it’s based on the execution, how well the execution is related to the story line and the types of viewers that the program attracts.”

By and large, leading brands in a category tend to perform better than brands that are second or third or fourth in the category. “There’s a higher relevance and attractiveness and affinity for these brands,” he said.

Mr. Ernst said marketers have to strike a delicate balance between being well integrated into the show and not being overly noticeable. “The advertiser has to play a balancing act between being too in your face and creating a negative impression, and being almost so seamless that you’re invisible,” he said.

And the more central the story line that a product is integrated into, the better. In reality shows there can be three or four story lines. Some brands get related to the “A” story lines while others get the less important ones, and that creates a higher or lower attentiveness, Mr. Ernst said.

“The Apprentice” is one of the best-performing shows. “Brands fit very nicely in that show,” he said. “We’re going to have brands be an integral part of the plot. In other shows, you can see where the brands are peripheral.”

“The Contender,” for example, “doesn’t do quite as well,” he said.

In addition to reality shows, Initiative has looked at integrations within scripted shows.

“We’ve found that it’s harder for brands to generate recall within scripted shows than within reality shows,” Mr. Ernst said.

He attributes the gap to the fact that viewers watch reality shows expecting that brands are going to be an integral part of the program and the plotline. They don’t have the same expectation while watching a scripted comedy or drama. “Viewers are not watching scripted shows with the same frame of reference, and they don’t seem to be recalling it as well,” he said.

Mr. Ernst said he thinks PreSENSE is unique in the industry because it taps into the impact that the show and the brand are having on consumers. Other efforts at measuring product placement deal with duration or use smaller focus groups.

And Mr. Ernst said the principles of PreSENSE may have usefulness in other difficult-to-measure areas. “We’re looking at how we can use this for multiplatform measurement,” he said.