By  on December 29, 2004

LOS ANGELES — Product placements are on the rise as an alternative to TV commercials.

It’s a marketing tactic gaining ground most prominently in a handful of industries, including apparel, autos, soft drinks and electronics — in large part because the effectiveness of commercials has come into question in an age when new technologies, like digital video recorders and satellite radio, enable viewers to avoid them.

The phenomenon’s importance has been unmistakable in the apparel world as evidenced by the past merchandise-moving ability of shows such as NBC’s “Friends” and HBO’s “Sex and the City,” noted participants in an advertising panel at the third annual HD Expo, held last month at the Petersen Automotive Museum in Los Angeles. For example, L.A.-based contemporary line Ella Moss saw sales spike after Sarah Jessica Parker wore one of the brand’s items on “Sex and the City.”

“There’s a large opportunity for the fashion world to capitalize on the practice, as long as they can match a brand with a cast,” said Terrence Coles, director of sales and marketing for Pier 3, an entertainment marketing company that has worked with such brands as L.L. Bean and Skyy Vodka. “You can’t create value for a client by throwing a bunch of things out there and seeing what sticks.”

Fashion companies ought to think of themselves as partners in placement ventures, because the payoff could last for years, Coles said. He pointed to the fall season’s crop of fashion-centric shows — including Fox’s “The O.C.” and the blockbuster launch of ABC’s “Desperate Housewives,” which is averaging 20 million viewers per broadcast — as good entertainment vehicles in which to place fashion products. “‘Desperate Housewives’ is the show to be on if you’re a fashion brand,” Coles maintained. “Those brands that got in early will probably get to stick around for a while.”

Halston won a significant placement in the Dec. 12 broadcast of “Desperate Housewives,” which featured a Halston fashion show, replete with silk gowns, some with laser-cuts and others with hand-painted paillettes. Even before the show aired, Halston designer Bradley Bayou related that he began fielding calls for similar outfits, spurred in part by the show’s stars, who were wearing Halston designs to evening events.What’s helping to legitimize the practice of product placement is the ability to now measure it. How much does a placement help?

Nielsen Media Research, which has long generated the TV ratings used to set ad rates, this March began measuring how often products and brand names appear on prime-time shows on broadcast television. It reported apparel made recognizable by visible brand names or logos or by mentions was the top “brand occurrence” category, seen or heard 653 times for the fall TV season running from Sept. 20 to Nov. 2. Nike was the most commonly placed apparel brand, capturing 23 percent, or 149, of those appearances.

A TV ratings agency source cited an estimate that a combined $300 million has been spent on product placements this year by ABC, CBS, NBC, Fox, WB and UPN.

“If you know what a 30-second commercial costs on a television show and if you have the ability to measure the product placement on that show, you now have a [basis for] dialogue you can present to the customer,” Coles said.

Product placement’s growing prevalence also means more money is changing hands in the endeavor, sparking a more integrated effort between the marketing teams at various brands and TV shows. Increasingly, those efforts are superseding those of public relations people previously charged with handling such negotiations and are prompting ad agencies to create departments devoted to the practice. “It used to be considered a side option that public relations people would handle,” recounted Stacy Jones, vice president of Creative Entertainment Services, a product placement agency. “Now marketing teams are working on it and [allocating] dollars to it.”

Those dollars are also winning new interest from TV and movie production companies, which have begun funneling product placement revenue back into marketing and promotions for TV shows in which a placement appeared.

The price networks can command depends on a brand’s level of integration in a program. A product sponsorship, like the ever-present Coca-Cola brand on Fox’s “American Idol,” can cost around $20 million to $30 million for a season. Plot placements mean a brand gets worked into a script, another pricy venture costing anywhere from $100,000 to a few million dollars.Product plug overload can backfire with viewers, however, as seen in shows such as NBC’s former program “The Restaurant,” said Greg Solman, West Coast bureau chief of Adweek. “Everybody knew American Express paid for Rocco to use the card to open his restaurant — especially when it led to an American Express commercial starring [that character] saying he’d used the card to start his restaurant,” Coles noted.

As a result, most brands would do best to err on the side of discretion — unless they get lucky. “Coke was in front of everybody on ‘[American] Idol’ but the content was so good that everybody forgave them,” contended Richard Storrs, president of A Creative Group, a full-service entertainment marketing agency and parent of Creative Entertainment Services.

Many brands pride themselves on getting free plugs in TV shows by virtue of offering their newest products or through networking that enables brands to seed celebrities with products to be used in their everyday lives.

“We haven’t paid for one dollar of product placement,” said Davina Kent, TiVo advertising and research sales manager, noting TiVo’s placement of its digital video recording technology on “Oprah” and “Sex and the City.”

One challenge specific to fashion is achieving instant viewer recognition for a brand. For example, it took time until the Manolo Blahnik stilettos trumpeted by Sarah Jessica Parker in “Sex and the City” became readily identifiable by the general public. Similarly, Johnson noted, viewers will identify logo purses by Coach more easily than a piece of lingerie from Victoria’s Secret.

L.L. Bean got a boost, Coles said, when it provided clothing and accessories from slippers, to chambray shirts, jeans and canoes for this year’s movie, “Welcome to Mooseport,” a 20th Century Fox comedy starring Gene Hackman and Ray Romano. “If fashion companies can get more than one garment on a show,” Coles said, “they can really make a brand statement.”

For maximum effect, however, brands that pull off successful product placements on TV programs and in movies still need to touch viewers in other parts of their lives. “Fashion companies have to do more cross-promotion — maybe store appearances — to make a more meaningful statement,” Jones pointed out.

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