The Impact of Branded Entertainment on Today’s

Television Viewer
Frank Dudley
Vice President, Marketing
FIND/SVP

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The Impact of Branded Entertainment on Today’s Television Viewer

Purpose of Our Study

To determine if branded entertainment

works and how it compares to the
effectiveness of television commercials
and other traditional forms of advertising.

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The Impact of Branded Entertainment on Today’s Television Viewer

 Who Did We Survey?

§ 1,000 adults

§ Nationally representative

§ 47% Men, 53% Women

§ Ages
• 18-24 (9%)
• 25-34 (18%)
• 35-44 (23%)
• 45-54 (24%)
• 55-64 (16%)
• 64 or older (10%)

§ Marital status
• Single (26%), Living with a partner (8%), Married (49%),
Separated/divorced/widowed (17%)

§ 30% With children under the age of 18

§ 46% Work full-time, 15% Retired

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The Impact of Branded Entertainment on Today’s Television Viewer

What Is Branded Entertainment?

For the purpose of this study, Branded Entertainment is defined as the following:

Product Placement
The appearance of a branded product in a film, television program, or other form of
entertainment media, like a song, video game or book. It can range from a few seconds
in duration to several minutes or more.

Branded Integration
When a product or brand becomes an essential plot element. This is potentially more
valuable to the advertiser and also more expensive, since it involves the product in the
action and often requires special scripting.

Branded Content
Bringing a brand into the foreground, as either a highly-visible sponsor or the focus of
the program itself in television programs or films.

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The Impact of Branded Entertainment on Today’s Television Viewer

Advertising Spending Facts

§ Spending on paid product placements almost doubled to $1 billion

in 2004.1

§ Total spending, including barter and gratis arrangements, was estimated to reach
$3.5 billion in 2004, increasing to $4.2 billion in 2005, and $6.9 billion in 2009.2

§ TV spending outstripped film spending ($1.9 billion and $1.3 billion respectively).3

§ $326 million was allocated to other media, including recorded music and video
games, with ad spending in videogames expected to reach $800 million3 in 2005.

§ According to a 2005 Association of National Advertisers member poll, 63% of

respondents had engaged in branded entertainment projects within the last year
and 11% plan to use this tactic in the immediate future.

1 “Product Placement Spending in Media 2005,” PDQ Media Study, March 29, 2005.
2 “Paid Placement Soar, Study Finds,” Hollywood Reporter, March 30, 2005.
3 "Marketers Leverage Brands Via Video Game Industry,” Primedia Insight, April 19, 2005.

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The Impact of Branded Entertainment on Today’s Television Viewer

ROI for Branded Entertainment

Branded Entertainment’s record is promising, although anecdotal:

§ Pontiac’s integration into “The Apprentice” resulted in a wave of pre-orders for the
first 1,000 Solstice Roadsters to be built.

§ Coke’s $10 million sponsorship of “American Idol” reached a peak audience of 23

million viewers.

§ Doritos sales “spiked” as a result of a prominent role in the first season of “Survivor.”

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The Impact of Branded Entertainment on Today’s Television Viewer

ROI for Branded Entertainment

Suggested Best Practices for Measurement of Branded Entertainment:

§ Screen Time: How much time does the product get on screen? Is it in the
foreground of the scene, or tucked away in the background? How clear to the
viewers are the logo and other identifying marks?

§ Character Building: Do the various characters, including the star, use the
product? Does anyone mention it or say how good it is?

§ Awareness and Recall: Did the product appear during an important plot point?
Are there 30-second commercials for the product during the show? Are viewers
distracted from the product placement by other factors?

§ Business Function: What is the reason for the placement? Does the advertiser
want the product appearance to generate buzz and publicity or create more
sales – or both?

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The Impact of Branded Entertainment on Today’s Television Viewer

Recent Trends and Developments

§ In-Game Placement is a small but growing category. Spending on in-game

placement will reach $800 million in 2009, up from $120 million in 2004.

§ Spending on “Advergaming” [games created around products] is forecast to

account for $266 million, or one-third of total revenues.

§ Although the FCC has declined to set guidelines thus far, several members have
expressed concern about “covert commercial pitches” on television, particularly as
it relates to children’s programming.

§ Commercial Alert is recommending real-time pop-up notifications of product

placements in television programming.

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The Impact of Branded Entertainment on Today’s Television Viewer

TV Commercials vs. Branded Entertainment Activities

TV Commercials are still a valuable advertising tool to educate and influence

consumer purchasing behavior.

Likeliness that activity would influence me

to purchase product
52%
TV Commercial 42%
6%

Someone using the product in a 23%

68%
scene in a TV show 9% Much More/Somewhat More Likely to
Purchase
22% Would Have No Effect
A Host mentioning the product 69%
10%
Much Less/Somewhat Less Likely to
23% Purchase
A Host giving away the product to a
69%
guest or audience members 9%

18%
A line in the show that says "this
73%
show is brought to you by..." 9%

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The Impact of Branded Entertainment on Today’s Television Viewer

 Consumer Understanding and Marketers’ Objectives

Primary objective of TV Commercials is clear to most consumers; primary

objective of Product Placement is not.

Primary Objective of Activity Is to Try to Get You to

Buy Product: % Agree Completely

TV Commercial 73%

A line in the show that says "this show is

54%
brought to you by..."

A Host giving away the product to a guest or

52%
audience members

A Host mentioning the product 46%

Someone using the product in a scene in a TV

43%
show

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The Impact of Branded Entertainment on Today’s Television Viewer

 TV Commercials: Influence on New vs. Existing Products

Over half of respondents say a TV Commercial is likely to influence them to

purchase a new or existing product – or both.

Likelihood of a TV Commercial to Motivate

Purchase of a Product

Both new and existing

product
15% 3%
Makes no difference
35%
Would not be motivated
to purchase either
20% New product
27%
Existing product

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The Impact of Branded Entertainment on Today’s Television Viewer

 Product Placement: Influence on New vs. Existing
Products
More respondents feel they are less likely to be influenced by Product
Placement than by a TV Commercial – regardless of if it is a new or existing
product being promoted.

Likelihood of Product Placement to

Motivate Purchase of a Product
Existing product

6% 7% New product
37% 17%
Both new and existing
product
Would not be motivated
33% to purchase either
Makes no difference

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The Impact of Branded Entertainment on Today’s Television Viewer

 Acceptance by Type of TV Show

Consumers surveyed were more likely to accept Product Placement in

scripted shows vs. other types – many still felt it was not appropriate in any
type of show.

Type of TV Show Product Placement and

Commercials are Most Accepted

63%
55% 57%
51%
47%
36%
30%
26%
25%
20%

Situation Drama/Soap Not acceptable Talk Show Reality TV

Comedy Opera in any type of Show
show

TV Commercial Product used in a Scene

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The Impact of Branded Entertainment on Today’s Television Viewer

 Placement Acceptable, but Brand Recall is Low

Awareness of Name of Cars Given Away on Oprah

Show

Don't know 71%

40%
Pontiac 19%
44%

Chevrolet 5%
9%

Lexus 2%
3%
Didn't See Oprah Show
Toyota 2% Episode
3%
Saw Oprah Show
Cadillac 1%
1% Episode

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The Impact of Branded Entertainment on Today’s Television Viewer

 What about Targeting Children?

Whether it is through TV Commercials or Product Placement, marketers

must use caution when targeting children.

Age Level Deemed Inappropriate to Target Television

Advertising to Children

Under 5 years
40%
34%

Do not feel it's inappropriate for any age

36%
40%

32%
5-7 years 28%

24%
8-10 years 22%

20%
14-16 years 16%

17%
11-13 years 17%

Don't know/no answer

11%
11%

Commercials Product Placement (use of a product in scene)

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The Impact of Branded Entertainment on Today’s Television Viewer

 Impact of TiVo and DVRs

While only 15% of consumers surveyed own a digital recording device

like TiVo, 62% said not having to watch TV Commercials was a benefit.

Benefits of Using a Digital Video Recording

Device (like TiVo)

Can watch show whenever I want 76%

Don't have to watch TV commercials 62%

Can watch show faster because I fast

58%
forward through commercials

Can fast forward/rewind through show 55%

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The Impact of Branded Entertainment on Today’s Television Viewer

 Conclusions

§ Branded entertainment is a growing medium and can be an essential tool in

driving awareness and sales.

§ Branded entertainment should be part of a fully-integrated effort that includes

advertising, public relations and other targeted marketing activities.

§ Define your business objectives and budget before spending the money – once
goals are defined, you will be able to create the right measurement process to
validate the investment.

§ ROI is still difficult to measure using the advertising metrics that are in place
today.

§ Internet may pose a greater threat to brands using any strategy that utilizes TV.

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The Impact of Branded Entertainment on Today’s Television Viewer