February 26, 2006

Digital Product Placement Alters TV Landscape

LOS ANGELES -- A breakthrough in television advertising debuted without fanfare last spring as a brand-name box of crackers appeared on the CBS sitcom "Yes, Dear" for about 20 seconds, seen but hardly noticed by millions of viewers.

Unbeknownst to them, the image of Kellogg's Club Crackers had been digitally painted onto the top of a coffee table after the scene was filmed, launching the latest advance in a growing marketing practice known in the industry as product placement but derided by critics as "stealth advertising."

The "Yes, Dear" episode in April 2005 marked the first commercial use of a patent-pending innovation dubbed Digital Brand Integration, or DBI, developed by New York-based Marathon Ventures, and grew out of an unprecedented marketing deal with CBS.

Since then, CBS has used the technology to plug brands such as StarKist Tuna and Chevrolet on several other shows, including the hit police drama "CSI: Crime Scene Investigation" and new sitcom "How I Met Your Mother."

David Brenner, founder and president of Marathon, said his company expects to unveil a new pact soon with the Fox network, a unit of News Corp. Ltd.

Blending brand names and products into television shows, as opposed to traditional ads that run during commercial breaks, has gained greater currency in recent years as the industry faces the rising popularity of  TiVo and other devices that let viewers skip commercials.

But some industry experts suggest that product placement -- digital or otherwise -- has limited value in delivering a commercial message.

Hollywood producers and writers also have raised concerns about their work being turned into virtual infomercials, and consumer activists have fretted about blurring the line between entertainment content and advertising.

CBS executives declined to comment.


The electronic insertion of Club Crackers into an episode of "Yes, Dear" was not the first instance of a TV show being digitally altered to superimpose brand-name images.

The technology, pioneered by a New Jersey-based outfit called Princeton Video Image, has been a part of U.S. network sports broadcasts for nearly a decade.

Virtual product placement in scripted prime-time series dates back to a non-paid experiment conducted on the UPN network in March 1999, when images of several brands, including Coca-Cola and Blockbuster video, were digitally spliced into an episode of the now-defunct drama "Seven Days."

Back then, network executives voiced skepticism about widespread use of the technology in scripted prime-time programs. Part of what was missing was a system that allowed the networks to easily market placement spots to advertisers.

Brenner said his system puts computer-generated brand integration on the same business footing as traditional TV ads by giving networks control over an "inventory" of placement opportunities they can sell on a routine basis.

It also improves the speed and ease with which brand and product images can be inserted in post-production. Brand images can thus be altered or replaced when the show goes into reruns and off-network syndication.

"We have created a system that allows everybody involved to make more money," Brenner told Reuters in an interview.

The key component in his DBI system is a process for cataloging each frame of video in a given TV episode to build a list of precise scenes and positions offering advertisers the best natural fit for their products. The idea is for digitally inserted images to be visible but not overly conspicuous.


"Although we want the product to be noticed, we don't ever want it to intrude on the creative process or the creative dynamic of the show," Brenner said.

Experts say striking that balance poses one of the greatest challenges to product placement.

"Simply placing a can of something, or a box of Wheaties on a table in the background ... I'm not sure if that builds brand preference or brand loyalty, or if consumers, quite honestly, realize it's there," said David Cohen, interactive media director at advertising agency Universal McCann.

Conversely, Cohen said, "The moment it starts reeking of overt product placement ... is when it starts losing its effectiveness and its appeal."

Stacey Lynn Koerner, executive vice president for research at ad-buying agency Initiative, said much depends on how the placement is used.

"If the brand is striving to be considered as hip or on the cutting edge, and it is placed contextually in an environment with a very cool, hip character, repetitively ... there may be some value in that," she said.

Product placement has taken off in recent years as media companies seek to confront the growing challenge posed by digital video recorders (DVRs), led by TiVo Inc., which threaten to unravel the 50-year-old business model of commercial television.

According to Nielsen Media Research, network placements in prime time last year numbered 108,261, up more than 30 percent from 2004. The trend has been most pronounced on reality series such as NBC's "The Apprentice."