Brand Integration Article
Can Brand's Save Hollywood?
by Brent Stafford and Michael Malone
The events of September 11 . . .
The events of Sept. 11 have had a tremendous impact on Hollywood and the entertainment industry overall. Networks and studios immediately scrambled to cancel TV programming that might offend viewers' changed sensibilities. Out of respect for the victims and with viewers glued to the news, season premieres were delayed. So, while ratings for network and cable news programming rose, primetime ratings for four of the six networks dropped—ABC by 21% and FOX by 15%.
All this added up to hundreds of millions in lost advertising dollars, compounding the effects of this year's lackluster up-front advertising market. As Hollywood's content producers and talent agencies begin development for next year, networks and studios have made it clear they will no longer continue funding exorbitant talent and production costs. Producers without pre-existing distribution deals are finding it impossible to sell programming without committed brand advertisers on board.
As a result, several major TV program producers have already shut their doors: Sony's Columbia Tristar Television (CTTV) division, entertainment mogul Michael Ovitz's Artist Television Group and Steve Golin's Propaganda Films. CTTV, a long-time leader in the production and distribution of shows that include Seinfeld, Dawson's Creek, Walker Texas Ranger, King of Queens, The Nanny, News Radio, Different Strokes, Charlie's Angeles and Who's the Boss reported it could no longer make a profit.
This provides a clear signal that the existing network TV financing model—long under siege from soaring production costs, the explosion of new cable options and an increasingly fragmented audience — needs a major overhaul.
Before 9/11, networks had turned to cheaper-to-produce "reality shows" as a quick fix in their search for new financing. With viewers shunning those shows now, networks are looking for a more permanent solution.
One aspect of reality TV gave them an idea: it was easy to integrate brands into their content (e.g., contestants wearing Reebok shirts) for which advertisers were only too happy to pay extra.
Search for alternative forms of financing
Right now, the most talked about movement in Hollywood in its search for alternative funding is the integration of brands into regular programming content. Networks and producers are willing to move beyond traditional product placement—to bring brands alive in the message, scripts and/or complete story lines of primetime and daytime shows. Even Standards and Practices are looking the other way a little to help ease the revenue crunch, which was unthinkable only a year ago.
This presents a unique opportunity for brand advertisers looking for more bang for their advertising dollar. As the importance of other consumer touch points grow in consumer decision making, contextualized brand integration offers marketers an additional powerful tool to reach audiences between commercial breaks.
The challenge, however, is to close the loop. And make sure these efforts don't compromise the core equity of the brand. As America recovers and emerges triumphant, we believe there will be a new paradigm in Hollywood that provides one of the most exciting opportunities for brands and marketers.