Networks, Automakers Intersect

Jan 8, 2007  •  Post A Comment

In the premiere of FX’s new series “Dirt,” tabloid editor Lucy Spiller, played by Courteney Cox, leaves a Hollywood party and while she’s waiting for her car, she has a conversation with a man. “Keep up with me if you can,” she says.

Then the valet pulls up with her car, a black Pontiac Solstice GXP convertible.

The appearance of the Solstice is no accident. It’s part of a product placement and marketing deal with General Motors’ Pontiac division that allowed the network to present the show without commercials.

It’s also no accident that FX did the deal with an automaker. Car companies, traditionally the biggest TV advertisers,

are pushing the marketing envelope to attract customers and doing some of the most inventive advertising deals with television networks. The networks in turn are offering sponsorships, product placement, video-on-demand, online video and other advertising enhancements to avoid losing those auto ad dollars.

“There’s a couple of ways of breaking through the clutter and one of them is to eliminate the clutter and leave yourself as the only one standing,” Mark-Hans Richer, marketing director for Pontiac, said of the “Dirt” sponsorship. “There’s nothing wrong with commercials. Clearly we still air commercials, but the definition of commercial and even what advertising is has expanded greatly.”

The auto companies spent $9.9 billion on TV advertising in 2005, compared to only $422.1 million on the Internet. But with technology making it easier for viewers to zap commercials, they’re turning to new media for accountability and efficiency. General Motors increased its online spending 67 percent to $66.1 billion and Pontiac last year launched a new model, the G5, with online ads only.

While other industries are also testing new forms of advertising, automakers’ willingness to experiment has a lot to do with the nature of their product: There’s a big difference between trying to get someone to sample a $2.50 hamburger and getting them to buy a $25,000 vehicle.

“Automotive has unique challenges because of the size of the transaction we’re asking for and the clutter in the category,” Mr. Richer said. “So it does lend itself to more creative marketing because the competition is so much stronger and because the barrier to success is so much higher.”

The automakers have a lot of money to spend and have been very aggressive in seeking new approaches, said Ed Erhardt, president of ESPN ABC Sports Customer Marketing and Sales.

“They can hold a pitch and say, `We’ve got $15 million, bring us your best,’ and everyone jumps. So they get the best ideas in the marketplace.”

General Motors’s GMC Truck line is featured in the opening of ESPN’s “Monday Night Football” and Toyota and its Lexus division sponsor halftime as part of a multimedia package. Toyota is also involved in ESPN’s Sports Nation online community.

Toyota has done a number of other deals, including sponsoring special mobile-phone episodes of Fox’s “Prison Break.” The company has also advertised on Web replays of ABC’s prime-time shows and created on-air and online tie-ins with NBC’s “Friday Night Lights.” In addition, Toyota has created a special half-time feature on NBC’s “Sunday Night Football” that ties into high-school football in the heartland for its Tundra pickup truck.

Those programs are a major component Toyota’s marketing programs, a company spokesman said. And they’re already helping the company meet its marketing goals.

Automakers’ role in driving demand for new advertising ideas is also illustrated by a pitch arranged for the IFC cable network by Acura.

“They basically said the assignment was it needs to be different from all other television advertising,” said Evan Shapiro, general manager of IFC, a commercial-free network that has increased its sponsorship activity.

IFC created a “Sunday Best” package for Acura to sponsor and produced branded entertainment shorts featuring the automaker’s new RDX sport utility vehicle. The network bought the package and increased its spending on the network.

The package also includes research to determine the return on the automaker’s investment in the campaign.

“We have been demonstrating to our partners that being outside the box and thinking a little bit more aggressively about how to spend your money pays dividends,” Mr. Shapiro said.

AMC has been adding automakers to its roster of advertisers, and those automakers have been attaching themselves to key properties on the network. Ford was the title sponsor of AMC’s Golden Globe-nominated original movie “Broken Trail,” which drew a record number of viewers to the market. Ford’s Lincoln division sponsored AMC’s “Friday Night Feature” and Hyundai sponsored the network’s “Movie of the Month.”

“They become a part of our air, they become part of our events, they become part of our multiplatform integration,” said Charlie Collier, general manager of AMC.

GM has also become a major player in video-on-demand. It started by buying spots during traditional TV shows. For example, it sponsors the CBS prime-time series that appear on Comcast’s On Demand service. But the automaker has also developed its own on-demand service, called GM Showroom, where someone in the market for a full-sized pick-up can watch a 29-minute video about the new Silverado.

“Basically we’ve seen television morph rapidly in terms of technology and how people are using it and we’ve wanted to leverage those changes to better our position as a manufacturer in terms of getting our story in front of vehicle shoppers,” said Paul Edwards, director of media operations for GM’s Showroom VOD operation.

GM has its showroom running on the four biggest cable providers, with information on 60 vehicles available in 20 million households.

“We’re in the early stages,” he said. “We feel the future holds a lot of potential.”

That means it’s important for traditional TV networks to forge close ties with their auto clients. At FX, President John Landgraf built a relationship with Dino Bernacchi, who until recently was Pontiac’s advertising manager and was promoted to a corporate position overseeing product integration for GM.

“He and I formed a strong relationship early on and those conversations and that relationship resulted in very significant integration,” Mr. Landgraf said.

In the initial “Dirt” sponsorship deal, the car was supposed to appear in three episodes. Now it will appear in eight. And the executives’ relationship is working both ways: Mr. Bernacchi suggested one story line for the series in which material found in the trunk of the Solstice plays a key role. That episode will also feature the car in a chase scene.

Those appearances can have more horsepower than a spot, Mr. Landgraf said.

“Pontiac’s ads are excellent, but when you take an actress like Courteney Cox, who plays a character, Lucy Spiller, who is complicated, successful, beautiful, glamorous, lives in this very high-end, alluring world of Hollywood, and you make the Solstice, which is a beautiful car, an extension of the character, you’re doing something different.”

After last week’s premiere, Pontiac’s Mr. Richer seemed pleased.

“We’re very encouraged by the initial results from the show’s ratings the first night and very happy with the partnership with FX and the folks who are running the show.”