Video: Ad aware

By Jerry Cobb Reporter
CNBC
updated 3/8/2006 3:52:11 PM ET 2006-03-08T20:52:11

Product placement is not new, but digital technology has added a new twist to the practice of putting brand-name items into TV shows. It raises new issues for Hollywood’s creative community.

When a scene from the CBS TV show “Numbers” was filmed there was nothing on the table. In post-production, presto, a steaming cup of Campbell’s soup is added.

Same with an episode of “Still Standing.” Originally nothing in the shot, and afterwards a box of Cheeze-Its appears.

The process is called digital brand integration and it is the newest form of product placement developed by a company called Marathon Ventures.

“We can place a product, virtually any size, in almost any location. It really depends on what the program and the video in each individual episode provides in terms of a logical or contextual background,” said the company’s president, David Brenner.

In an exterior shot from “Still Standing,” with a wave of the digital wand a Saturn SUV is added. Sitcoms are ideal for product placement with lots of interior locations and opportunities to see brand-name items.

Different products can even be inserted into the same show for different distribution windows.

“You could place one product in a first-run telecast, a second product what that program is rerun, and a third product when the show goes into syndication, and another product when it goes on cable,” Brenner said.

Advertisers spent nearly $2 billion putting their products into TV shows last year. Most of that was traditional physical product placement, and much of it on reality shows like “The Apprentice.” One study estimates an hour of reality programming currently contains an average of 20 minutes of product placement.

“It does undermine the value of whatever you are watching if there is a blatant pitch. On the other hand if it is done well and you barely notice it, it can be pretty effective,” said Todd Wasserman of Brandweek.

Hollywood’s unionized actors, writers and directors say it has gone too far and the Writers Guild is circulating a product placement parity video on the Web and plans to push the studios and producers to develop a code of conduct and share the revenue generated by these deals.

“Yes, we believe it is something we can get in bargaining and that we intend to begin the bargaining as soon as possible,” said Patrick Verrone, president of Writers Guild of America West.

Now the union pushback over product placement is just part of a larger battle brewing between the studios and the talent guilds over how to share new revenue streams from digital technologies.

The talent guilds feel they got the short end of the stick in earlier negotiations with the studios over how to share DVD revenue. They’re determined to get a piece of new revenue streams for everything from product placement deals to digital downloads of movies and TV shows. They are threatening to strike over the new product placement issues.

Meanwhile advertisers and producers are expected to rely more heavily on product placement, especially as more TV viewers use digital video recorders to fast forward past 30-second commercials.

"Marketers are really worried about this because the old way of doing business of running 30-second commercials between shows that everybody watched is clearly going away," said Brandweek’s Wasserman.

© 2012 CNBC, Inc. All Rights Reserved

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