Plugs spring a leak

Networks on brink of tipping point as product placement triples in primetime

By JOHN DEMPSEY

At the Sept. 20 taping of CBS' "Rock Star: INXS" closing episode, the two finalists were answering questions just before the climactic showdown. Co-host Dave Navarro's first query: How do you like your new 2006 Honda Civic?

J.D. Fortune, the contestant, refused to take the question seriously, and Navarro started laughing.

The message was clear: Blatant product placement on TV shows may be hitting the saturation point.

At a Goldman Sachs conference in New York last week, Viacom co-prexy/co-COO Leslie Moonves boasted that in-show commercial plugs will triple in value this year, adding that "you'll see it in almost every single show on the networks" in 2005-06.

Exhibit A: In the first six months of 2005, Amanda Bynes' sitcom on the WB, "What I Like About You," featured 1,838 plugs for products, according to Nielsen -- everything from Herbal Essence shampoo to Fruity Pebbles and Count Chocula.

Last year, advertisers ponied up $550 million in cash to insert their goods into broadcast or cable shows. This year, it's likely to jump 50% to $825 million.

If Moonves is right that this season's program schedules on broadcast and cable will be awash with more product placements than during any comparable period in TV history, some media buyers say a tipping point could be reached if the plugs become so intrusive they ignite viewer backlash.

Advertisers may be grumbling over the high prices, particularly the $5 million and more Mark Burnett often demands to thread a product throughout an entire hour of "The Apprentice." But these advertisers don't know how much is too much because there are no criteria by which to measure product placements: Nielsen is months away from releasing a study on whether these in-show plugs are causing viewers to buy the toothpaste, peanut butter or whatever.

As viewers turn to TiVo and other devices to zap 30-second spots from their TV diets, the product-placement industry has risen to meet the challenge. Earlier this season, General Mills was looking for more than just a standard shot of the Count Chocula cereal box resting on the kitchen table of Holly Tyler, the teenage character played by Bynes.

So the writers of the comedy made a running gag out of Holly's addiction to the sugar-saturated breakfast food.

"What I Like About You" deserves pride of place because a Nielsen Media Research survey shows that no other scripted primetime series this year shoehorned more of what Nielsen calls "occurrences" into each script. Second-place "King of Queens" on CBS lagged "What I Like" by more than 600 occurrences.

An occurrence can mean anything from a quick shot of a FedEx truck in the background of a scene to a teenager sitting in a booth at the local McDonald's extolling the virtues of a Big Mac to his buddies. Andy Donchin, a top media buyer at Carat North America, makes a distinction between the FedEx shot, which he calls a product placement, and the McDonald's interchange, which he calls branded entertainment. To Nielsen, though, if the same Coca-Cola can is shown in 23 different camera angles on an edition of "American Idol," that's 23 separate occurrences.

"Advertisers have to be careful that they don't kill the goose that's laying the golden eggs," says Patrick Quinn, president of PQ Media, which gathers the data on product placement used by the industry.

Quinn's fear is viewer turnoff from plugs within a show that draw attention to themselves.

Dave Harkness, senior VP of strategy for Nielsen, says he monitors carefully such things as how long a camera stays on a wristwatch with the name of the manufacturer clearly visible.

An extra payment by the watchmaker to the network can buy an extra few seconds of close-up camera time.

As part of a Nielsen study of 10,000 people this fall, Harkness will try to find out whether the quicker shot of the watch could be more effective in brainwashing viewers than a longer shot that's so irritating it drives people to deliberately boycott the product.

Many of its clients called on Nielsen to undertake the study because PQ's latest report indicates that the $550 million in cash that advertisers coughed up to get their products inserted into a broadcast or cable-TV show in 2004 represents an 84.2% jump over that of the previous year.

While the cash part of these product-placement transactions is mushrooming, PQ says the dollar value of free plugs is growing at a snail's pace: only 2.8% in 2004 to $118 million.

The barter part of product placement, in which, say, Ford offers the network free use of a truck in a scene in exchange for a shot of the Ford nameplate, is still the most widely used -- $1.2 billion in 2004 -- but it's growing less than half as fast as cash exchanges, up 39.1% in 2004.

The main reason advertisers are gung ho about shoehorning their products into the body of a TV show, says Bob Flood, head of media buying for Optimedia Intl., is the increasing use of digital video recorders such as TiVo by viewers drunk with power over their ability to erase commercials by fast-forwarding through them.

With Jupiter Research predicting that 55 million homes will own one or more DVRs by 2010, the product-placement trend may escalate to a full-blown mania.

Working longer hours, and spending more time commuting to work, people don't have time to sit through 20 minutes of commercials and promos in a typical one-hour series episode.

A lot of the money that used to drive annual double-digit increases in 30-second spots on broadcast and cable TV has shifted to product placement, not only in TV and movies but in videogames, the Internet, recorded music, radio and magazines, PQ Media says. This year these other media will pocket a strapping $384.9 million -- an 18.1% increase over last year's total.

This glut of product placement could end up with all the charm of a spam email offering Prozac at rock-bottom prices, says John Rash, head of media buying for Campbell Mithum.

"Viewers are going to get annoyed," he says, "if they're riveted to a comedy or a drama and all of a sudden they find themselves hit with a clumsy product placement that diverts their attention."

And when viewer annoyance translates into lower ratings, the networks could start cutting back on the paid plugs, particularly if mega-producers like Dick Wolf and Jerry Bruckheimer begin blowing the whistle.

But right now, product placement is like crack cocaine to the networks.

Quinn of PQ Media says that, at the current pace, advertisers will funnel more than $1 billion in cash to the networks for in-show plugs in 2006. This money is vital, he says, "because it's helping to offset production costs," which keep ballooning every year.

And if the temptation of all of that money becomes impossible to resist, in a few years the stars of dramas and sitcoms on broadcast and cable TV could end up wearing shirts, jackets and hats plastered with a product name and logo.

There's already a TV model for such hucksterism: The auto-racing drivers who shamelessly sell every inch of fabric on their uniforms to equally shameless product vendors.