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Is It a Show or a Commercial?

Increasingly, it's both, as advertisers find new ways to pitch their products inside TV programs

By Brian Stelter

On Harlem Heights, a new reality show on BET, the young stars swish Listerine, treat their allergies with Zyrtec, and sweeten their coffee with Splenda.

The products were placed within the scenes of Harlem Heights as part of a deal between Johnson & Johnson, the company that makes all three products, and cable channel BET. Through the arrangement, Listerine, Zyrtec, and Ambi skin-care products are woven into the stories of the eight young New York professionals who are profiled on Harlem Heights; in addition, Splenda and the hand sanitizer Purell are readily available as the cast go about their daily lives.

Welcome to the next generation of product placement: Brands of sodas, cars, and mouthwash are no longer just occasional props on TV shows and movies, as they were until about five years ago. Now, as part of more elaborate marketing deals, advertisers are increasingly working with writers, producers, and the networks to incorporate products into the story lines of both scripted and reality shows. Even news shows are doing it, raising difficult questions about journalistic integrity.

Examples are everywhere. Last spring, the characters on CSI: NY gathered around video-conferencing screens, ostensibly to share information about a shooting, but really to promote Cisco Systems' TelePresence video-conferencing system. In February, characters on the ABC soap One Life to Live spent the month talking up the health benefits of Campbell's soups.

In the past year, MTV has produced a series of commercials for its advertisers that look like shows. For example, a short chase movie called Get Moe was actually a series of 60-second commercials for Mountain Dew. A series of shorts called Men of Action thrust the heroes into violent confrontations that somehow promoted the virtues of KFC and Kay Jewelers.

Fast Forward

One "new" type of ad—a live commercial within a show—is actually a throwback to the early days of TV. Two late-night shows — The Tonight Show With Jay Leno and Jimmy Kimmel Live! — have recently experimented with live commercials. Leno simply lent his starpower by introducing the ad (for Klondike bars), but Kimmel and his sidekick actually do the live ads themselves (for Nikon, Pontiac, and Quizno's), transforming the commercials into comedy skits.

Companies are turning to more sophisticated kinds of product placement on television because they're worried that viewers are no longer paying attention to their ads. TiVo and other DVRs, which let viewers fast-forward through commercials, are the primary culprits.

About a third of U.S. households—some 30 million—currently have DVRs, but those numbers are likely to rise quickly with the changeover to all-digital broadcasting this year and the increasing number of cable and phone companies offering DVRs as part of their packages. That means millions more viewers will be able to skip right past the 30-second commercials that have long been the backbone of television's economic model.

Advertisers are scrambling to adapt, and more sophisticated product placements are one of the ways to get viewers' attention. Some companies are cutting their conventional ad budgets to put more money into product-placement deals; spending on product placement in the United States grew by a third last year.

"We want to blur the lines between the commercial breaks and the entertainment content," says Dario Spina, who handles "integrated marketing" for MTV's entertainment channels like Comedy Central and Spike. Some creators of TV shows and watchdog groups worry that "branded entertainment" could turn television characters into product promoters instead of storytellers.

It's a "a huge, out-of-control issue," says Robert Weissman of Commercial Alert, a nonprofit group that aims to limit commercial marketing. He says the involvement of advertisers in the shaping of scripts and plots represents "fundamental encroachments on the independence of the programming."

News Shows

The Federal Communications Commission (F.C.C.) has similar concerns, and is considering rules that would require broadcasters to clearly disclose product placements—not just flash them across the screen at the speed of light, which is the current practice.

"We're not saying they can't do it—we're just saying they have to let the audience know what they're doing," says Jonathan S. Adelstein, an F.C.C. commissioner.

Product placement has even found a home on news programs. Last summer, a Fox affiliate in Las Vegas raised alarms when it agreed to a product-placement deal with McDonald's. For several weeks, anchors on its morning news show had cups of McDonald's iced coffee on their desks (though they rarely touched the cups). The CBS stations in Hartford, Conn., and Atlanta have also accepted product placements on their morning shows, fueling the debate over potential conflicts of interest.

Others question whether it even works. "In the end, they just make the audiences even more skeptical of everything," says Herbert Jack Rotfeld, a professor of marketing at Auburn University in Alabama.

TV's Early Days

In some ways, this newfangled form of branded entertainment recalls the beginnings of television. Half a century ago, advertisers themselves often produced shows like The Colgate Comedy Hour and Texaco Star Theater, in which a chorus line of well-dressed gas station attendants opened each show by singing the Texaco jingle ("We're the men of Texaco, we work from Maine to Mexico") before introducing the host, Milton Berle. In fact, "soap operas" got their name because they were so closely associated with their sponsors, soap and detergent manufacturers like Procter & Gamble and Colgate-Palmolive.

News shows were also in on the act. Today, it's called NBC Nightly News With Brian Williams, but until 1956, it was the Camel News Caravan or the Plymouth News Caravan, depending on whether the cigarette maker or the car company was the sponsor that night.

A combination of rising production costs and the quiz-show scandals of the late 1950s pushed sponsors out of the business of producing shows themselves. Coming up with new ways to reach consumers, commercial ad spots as we know them today were born.

But products gradually (and subtly) found their way back into TV shows. Hoping that Hollywood's glamour would rub off on their everyday products, companies bartered their wares to producers, giving free props in exchange for the on-screen exposure. It meant extra revenue for the networks, and in a way, made the shows feel more real-life.

Then, about eight years ago, product placement became much more intense, partly because of the success of Survivor. The show's producer sold sponsorships to advertisers—including Reebok, Ericsson, and Dr. Scholl's—who each paid $4 million to insert their products into the show.

The sponsorship revenue covered most of the show's production costs, which meant CBS could put Survivor on the air without any real financial risk. And because success in television always spawns swarms of imitators, the networks latched onto this low-cost programming model.

The result? Reality shows started clogging the networks. They were cheap to produce, popular with viewers—and tailor-made for product-placement deals.

In 2008, more than 90,000 product placements appeared on the six broadcast networks, up 6 percent from the previous year, according to the Nielsen Company. The Biggest Loser on NBC topped the list of shows with the most product placements, with 6,804.

Taking their cue from the success of the product-placement model, philanthropic foundations have recently begun paying networks to weave social messages into TV programs. Call it "message placement": Instead of selling soda or cars, they promote education and healthy living.

This past year, the Bill and Melinda Gates Foundation helped shape story lines and insert messages on stopping the spread of infectious diseases and surgical safety into popular TV shows like ER, Law & Order: SVU, and Private Practice.

"There's a lot of research that shows that when a character in a series says, 'I'm going to be an organ donor,' it's effective, more effective than giving out a pamphlet," says Martin Kaplan of the Norman Lear Center at the University of Southern California's Annenberg School for Communication.

As the number of product placements continues to increase, industry analysts say the practice is becoming more and more accepted.

Savvy Viewers

"We haven't seen any noteworthy backlash on the consumer side about product placement," says David Kaplan at Nielsen. "Consumers get that this is part-and-parcel with their television viewing experience these days."

Maybe that's because viewers have become pretty savvy about product placements: Does anyone really wonder why Simon Cowell has a huge Coke cup in front of him on every American Idol?

"I think that most people in the United States know that there's some financial arrangement there," says Ambar Rao, a marketing professor at Washington University in St. Louis.

Tom Meyer, the president of a leading Los Angeles brand-management company, agrees.

"These shows have always been funded by advertising," he says, "and if advertising is changing, it has to be understood that the mechanics of how we deliver advertising must change, or advertisers will walk away."