July 21st, 2008

Research Firm Nielsen Tallying Product Placement Ads

By Alana Semuels
Los Angeles Times

Firms are vying to provide the information to advertisers who want to keep tabs on where competitors' products are popping up in TV shows.

SHELTON, CONN.—-- On the fourth floor of an office building in this green Connecticut town, Sarah Martin goes to work every day as a television watcher.

She doesn’t mind watching “Ellen” and “Lost.” She hates the days she has to sit through “American Chopper.”

Unfortunately, she can’t fast-forward.

Martin’s job is to count when brand names such as Coca-Cola or Cadillac or Yamaha appear in TV shows—on a soda can, whizzing past in a street scene, flashing on a billboard in the background, anywhere within the camera’s range. She works for research firm Nielsen, which provides the information to advertisers who want to keep tabs on where competitors’ products are popping up in TV shows.

They are popping up quite a bit these days: Martin said when she started her job a year and a half ago, she’d count an average of 10 brands in a prime-time network show. Now, it’s closer to 50. Viewers of the logo-laden “American Chopper” on Discovery Channel might be exposed to brands as many as 1,000 times per show.

“I used to watch TV all the time,” she said. “Now I go home and do other things,” such as reading books.

Martin is part of a small army of people employed by research firms and advertisers to track product placement, one of the fastest-growing segments of the advertising industry. Advertisers spent $2.9 billion in 2007 to place their products in TV shows and movies, up 33.7% from the year before, according to media research firm PQ Media. This year spending is projected to hit $3.6 billion, not including “barter” arrangements—in which a company gives away products to be used in shows, rather than paying for them to be placed there.

Firms for a long time have been measuring the frequency of traditional print and broadcast advertising. As a result, advertisers know who is spending what, and where.

But product placement has traditionally been a back-door industry, arranged by prop masters on TV shows and movies rather than by professional agencies. This has made it much more difficult to monitor who is placing products, and how often and where they appear.

Some, such as the Federal Communications Commission, are concerned that it is too difficult to discern when product placements occur. Last month, the FCC said it would consider new rules to better inform viewers when brands appear on shows in exchange for money. Such disclosures currently run during the credits, but the agency plans to examine whether product placement notices should be written in bigger print and displayed for a longer period.

Advertisers, on the other hand, are eager to know whether their money to plug their products is being well spent. Did viewers notice that the car the villain was driving was an Audi? Did a character holding a box of Wheaties really make people want to buy it? Did it make a difference how many times cups of Coca-Cola appeared on “American Idol”?

Several companies are now vying to become the place where advertisers look for those answers.

In April, Nielsen spent $225 million to acquire IAG Research, one of the biggest companies to measure the effectiveness of advertising and product placement. Nielsen is in the process of figuring out ways to combine parts of IAG with Nielsen Product Placement Service, the division that employs Martin and about 15 other “coders” to count when products appear in shows. IAG says that when combined with Nielsen, it will provide the first comprehensive service for tracking product placement.

The merger comes at a time when the Internet has upended the business of measuring advertising through its technical ability to count when viewers see an ad and respond to it. Advertisers now expect a high degree of specificity in knowing the effectiveness of their ads. That has put pressure on traditional forms of old media—such as TV—to improve their ability to measure how consumers respond to advertising, including product placement.

“If you can’t measure it, you can’t sell it,” said Alan Wurtzel, president of research and media development at NBC Universal, which uses data from IAG to show advertisers whether consumers respond to their placements.

IAG comes up with its product placement ratings by asking 2.5 million people to fill out surveys online after watching their favorite shows, said co-Chief Executive Alan Gould. The surveys ask whether viewers remember the brand, think more positively about it or want to purchase it, and whether the placement disrupted their viewing experience. Gould says clients have included Toyota, Ford, Verizon and American Express.

“The marketplace for branded entertainment is going to continue to grow,” he said. “And to fuel that marketplace, buyers and sellers will need an independent data source.”

Others are trying different approaches to measure the effectiveness of brand placement. Frank Zazza, the product promoter who was responsible for promoting the placing of Reese’s Pieces in “E.T.” and putting Junior Mints in Cosmo Kramer’s hands in “Seinfeld,” now runs a firm called ITVX that seeks to measure viewer recall of product placement.

His system takes into account as many as 60 different factors, Zazza said, such as whether a product appears in the foreground or background, whether a viewer is aware that a brand is on screen, and whether the show’s commercials are coordinated with the product placements.

As advertisers and producers become more sophisticated at seeding products into programming, “it becomes more complicated to measure,” he said.

Most advertising and media buying agencies have their own ways to measure the success of product placements, but few are willing to discuss their methodology.

That means it might take a long time for companies to adopt standards set by Nielsen—or by anyone else, for that matter. If advertisers adopt a standard of measurement for product placement, then they would lose their ability to negotiate what they pay, said Devery Holmes, president of product placement firm NMA Entertainment & Marketing.

“Even if a reasonable methodology were developed by a creditable company like Nielsen,” she said, “it is very likely that brand media buyers would not endorse it publicly.” That’s because a single measurement standard could lead to set pricing, which would make it hard for advertisers to negotiate rates.

Still, Nielsen is determined to establish its place in product placement measurement just as it holds sway in TV ratings. “If we do our jobs correctly, we will become the dominant way in which the industry measures product placement,” Gould said. He pointed out that if advertisers are the only ones measuring brands in shows, “it would be the people creating the stuff also grading themselves.”

The grind of counting all those products and brands isn’t about to let up, regardless of whether Nielsen establishes itself as the big gorilla in the business. Technological advances aside, it’s still a job that can be done only by humans.

“I didn’t wear glasses before I started here,” said Lauren Goerig, 24, a coder who works in Nielsen’s Shelton facility.

On her desk, crowded with Post-it notes and cans of Red Bull, a computer was playing the CBS drama “Criminal Minds.” She quickly tapped on the keyboard when a poster for the Museum of Natural History flashed on the screen. A couple of scenes later, she’s clicking again when Special Agent Emily Prentiss says to her colleague, Derek Morgan, “Remember the time when we got on board and they hadn’t chilled the Cristal?,” catching a reference to the trendy champagne.

The job has a way of rubbing off even in her off-work hours.

“When I watch shows at home, I’ll say, ‘He’s driving a GMC truck,’ “ she said. “My boyfriend just shakes his head.”

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