April 30th, 2003

Going Hollywood: Beverage Companies are Dealing with Advertising Overload with Less Traditional Tie-

By Mark R. Greer
Beverage Industry

During one of many hilarious scenes in the 1992 cult classic, "Wayne’s
World," actor Mike Myers stares into the camera and says, "Contract
or no, I will not bow to any corporate sponsor," before promptly and prominently
displaying products from Frosted Flakes to Nuprin to Pepsi.

We laugh at the irony—mostly because it’s true. Placing products in movies
is not a new concept, but recent advertising campaigns show that sophisticated
and intricate cross-promotions with movies, television and the Internet—from
product placement within the film to Internet sales campaigns to sweepstakes
--can make your total advertising package and reach more powerful than ever.

Consider some recent examples: Snapple Beverage Group, White Plains, N.Y.,
partnered with Fox Sport’s new extreme sports show "54321" ensuring
that the host and all guests consume the fruit drink on set while its logo appears
in the background. Dr Pepper/Seven Up Co. Inc., Plano, Texas, will join forces
this summer with "X-Men 2" during a cross-promotional sweepstakes.
Rolling Rock beer, owned by Labatt USA, Norwalk, Conn., is featured in the recently
released comedy "Old School," while that brand, along with Labatt
Blue and Dos Equis, appear on the bar-themed set of Fox’s "The Best Damn
Sports Show Period." The Coca-Cola Co.’s Nestea Cool will appear in commercials
for the upcoming sequel of "Charlie’s Angels" following Coca-Cola’s
$ 150 million deal last fall as the sole marketer for the latest installment
in the widely popular Harry Potter series, "Harry Potter and the Sorcerer’s
Stone."

So why the emphasis on product placement? Fractionalization of audiences and
increased choices for advertising media are to blame for the ineffectiveness
of traditional consumer advertising, according to industry experts.

"The traditional forms of mass media are becoming more saturated, and
there’s a lot of noise in our time-strapped country, so it’s difficult to break
through the clutter," says Richard George, dean of the department of food
marketing, Haub School of Business, St. Joseph’s University, Philadelphia. "We
face thousands of attempts to influence our behavior every day, and we deflect
most of it. During the commercial break, you grab the clicker, and you are not
there when the commercial comes on. [Product placements] are a means to reach
potential buyers more effectively."

George noted that with hundreds of specialty channels available via satellite,
a nationally popular show like "60 Minutes" earns ratings that are
a fraction of those during the 1960s, when there were fewer options for television
stations.

"A movie or television show tie-in is more engaging and natural than a
traditional commercial message," says Brenda Williams, Labatt USA spokeswoman.
"When a product is embedded in the content of a movie or show, it can carry
increased credibility with our target audience." And companies can market
exclusively to the same audience during the release of the film’s DVD.

The increase in product placement has prompted the creation of a whole set
of marketing companies specifically created for movie tie-ins. One of the industry’s
leading companies, UPP Entertainment Marketing of Burbank, Calif., reviews approximately
20 movie scripts each week to find the most harmonious union of film and product.
UPP’s clients include Jim Beam, Shasta, Veryfine juices, Bombay Sapphire Gin,
Bacardi rum and Alize cognac, and some of its best triumphs include placing
Evian water in "City Slickers," Gatorade sports drink in "Ace
Ventura: Pet Detective" and Coors beer in "E.T."

"This concept of integration is a big push. There are a lot of corporations
that realize being integrated from a product placement standpoint has a greater
value than a 30-second spot," says Steve Rasnick, vice president of the
California-based marketing firm. "Irrespective of what ad agencies tell
you, there’s a falloff in a commercial. People get up, they change the channel
and TiVo gets around commercials altogether, so by being integrated into the
program, you have a large, captive audience—and an interested one."

Brand fit

The most important key to product placements and cross-promotions is to ensure
a brand fits, says Bev Sorensen, promotion manager for Dr Pepper, who is working
with the soft drink’s latest tie-in, "X-Men 2." The sequel of the
comic book-turned-movie hit opened May 2, and Sorensen says the tie-in with
"X2" is a good match for the younger audience Dr Pepper is targeting.

"For every promotion we do, we look at the demographics and see if [the
promotion] is in line with the direction we want to take with the image,"
Sorensen says. In the case of "X2," marketing Dr Pepper’s new flavor,
Red Fusion, with the movie through sweepstakes and commemorative cans successfully
reaches the film’s predominantly 12- to 24-year-old audience.

"Product placement works well when it is a natural fit," she adds.
"When it’s forced, people will know. Consumers are smarter than that and
we respect that. You will take away from the credibility of film if it is forced."
Although the drink was filmed in the movie, Sorensen says she doesn’t know if
it will make the final cut.

Product placement "has to be within context," Haub School of Business’
George agrees. "The issue becomes one of ‘everything in moderation, even
moderation.’ The product ought to mirror the market. If people are at dinner
drinking Coke, that’s OK."

"Move tie-ins, like the one Rolling Rock now has with "Old School,"
are a great opportunity to get increased attention and awareness with national
audiences," says Labatt’s Williams. The recently released DreamWorks picture
shows a group of middle-aged men who attempt to revive their college years by
starting their own fraternity.

"Old School" was particularly relevant for our target audience of
young adult males and helps make Rolling Rock larger than life with our key
consumers," says Williams. Another key benefit is our ability to leverage
these tie-ins in other ways, such as online media, packaging, promotions and
publicity."

Promotional outlets

In addition to the placement in the script, varied, layered marketing tactics,
from the Internet to contests, are the goal for many beverage companies. The
true success of marketing tie-ins in the near future hinges on more than just
peppering the product across the silver screen. For example, Labbatt created
drink coasters featuring "Old School" stars for its key bar accounts.
Rolling Rock also was featured in onscreen commercials before the film’s debut,
which a Rolling Rock-sponsored contest winner attended in Hollywood.

Another example is Dr Pepper/Seven Up, which combined tradition with innovation
when it partnered last fall with ESPN for the cable sports channel’s original
movie, "The Junction Boys," about a sweltering summer of football
in 1954 under coach Bear Bryant in Junction, Texas. The company played up the
regional connection by placing old-fashioned bottles of its product in the film,
then coupled the tie-in with spots from its "Be You" ad campaign featuring
country singer Garth Brooks, which ran during the made-forTV movie’s commercial
breaks.

Pete’s Wicked Ale discovered that Hollywood can also create interesting opportunities
for inexpensive retail promotions when it teamed with "Blair Witch 2."
UPP used Internet promotions, a sweepstakes to visit the movie’s world premiere,
and retail placement using the tagline "It’ll Scare the Ale Out of You"
to market the drink.

"Today in the world of the Internet, one can become involved for rather
nominal dollars and still have an impact on the number of eyes that see the
product," UPP’s Rasnick says. "So instead of having to kowtow to retailers
in particular beverage categories, a smaller category can have a nice placement
in the film, which does nothing but excite the hell out of the sales-force."

Cross-promotion overdrive

That philosophy begs the question: Does "promotion overkill" exist?
Are tie-ins and commercials too much? Can media saturation backfire and draw
the ire of an increasingly market-savvy public? A recent survey done by WPP
Group’s Lightspeed Research shows the public does not take kindly to all marriages
between corporate marketing and Hollywood, as 62 percent of respondents said
they found the various advertising tactics distracting.

Ultimately, the intense saturation of beverages in the movies might help smaller
companies. Rasnick says that Shasta, which has been a UPP client for 12 years,
often benefits from offering an alternative to the beverage behemoths.

"Shasta is not a major player, but we are able to weave them in and out
of innumerable television shows every season," he says. "Shasta does
not come to the table with wheelbarrows full of money, but a lot of production
companies are sick and tired of seeing the Nikes and Cokes of the world. That’s
their artistic decision, so they’ll actually look for something different."

In any case, the tie-ins’ power, at least right now, is supreme. "Marketing
is a race with no finish line," George says. "We’ll get people emulating
and copying this to the point of diminished returns. I think this is evolutionary."
George adds that in the next few years, incessant product placements could create
"one long infomercial that becomes more clutter. But at the moment, a well-placed
[tie-in] has real potential."

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