Product Placement On Newspaper Sites?

By: Steve Outing

Lots of pundits start off the new year with predictions of trends for the coming 12 months. One that I found particularly insightful was “TV Trends to Watch in 2002,” by Cory Bergman, founder of LostRemote, a Web site and newsletter aimed at the television industry that focuses on the topic of media convergence.

Bergman’s column is as pertinent to newspaper and online publishers as it is to TV executives. Indeed, it behooves print-media and online executives to stay on top of broadcast trends.

A couple of Bergman’s predictions particularly struck a chord with me: the year of the DVR, and commercials with content. Stay with me, and I’ll explain why they are relevant to newspapers and online news publishers.

DVRs are “digital video recorders,” like TiVo and ReplayTV. They’ve taken a while to catch on, and still relatively few Americans own them. (The market leader currently is TiVo, with an installed base in the hundreds of thousands.) I have a TiVO, and frankly, I can’t understand why every American TV viewer doesn’t have a DVR or lust after one. (Perhaps poor marketing?)

DVRs give unprecedented control over TV watching: automatically record your favorite programs; watch whenever you want; skip commercials; share programs with others; etc. The feature that’s most relevant to online media is skipping commercials. On my TiVO unit (which is already dated technology, compared to the newest models), I regularly fast-forward through commercials.

On the sexy new ReplayTV models by SonicBlue, you can zap commercials even more conveniently. The newest ReplayTV boxes have options to play back recorded programs with commercials automatically removed by technology smart enough to detect what’s advertising and what’s programming. The units can be connected to the Internet, allowing you to send recorded programs to your friends — so they can watch commercial programming sans commercials.

(This commercial zapping is not without its detractors, however. The TV networks are suing SonicBlue over the “Commercial Advance” feature of its new ReplayTV units. But whether TV executives like it or not — and whether or not they prevail in this initial round of court fights — this sort of anti-commercials technology will march forward.)

Everybody Loves Raymond’s iMac

And this brings us to Bergman’s other trend: commercials with content or product placement. What’s meant by that phrase is that in an environment where consumers can use commonly available technology to eliminate commercial breaks from TV programming, the commercial messages (which make the programming possible) must be interjected into the programming itself.

We’ve seen this increasingly in recent years: the TV series actor is sipping a Diet Coke, or eating a Yoplait Yogurt, or working on a new Apple iMac — during the show itself. Those are paid commercials — ones that DVR users can’t skip over.

While commercials in content don’t yet dominate on TV, and are subtly done, the day is coming that commercial content will be more blatantly included in programming (that is, editorial content). The DVR’s penetration into the consumer marketplace is forcing TV executives’ hands; they’ll have no choice but to react decisively to the threat posed by masses of consumers skipping traditionally placed commercials. (The TV networks’ legal action against DVR makers is akin to the music industry trying to shut down Napster. This may be a short-term solution to skipped ads, but long term, lawsuits against DVR manufacturers will not halt the technology that allows consumers to exert control over what they view.)

Bergman believes that 2002 will be the year that DVR sales take off in a big way. I think he’s right. And this year, he predicts, the networks will significantly increase the practice of infusing programming with commercial content, in reaction.

Is it content, or is it an ad?

And this brings us to online media sites and advertising. The trends of television also apply to the online world. Just as product placement in programming is a major trend in TV, so too is it in the online advertising world.

Some experts believe that integrating advertising and content will shortly become a significant part of the online advertising landscape. Dave Morgan, an online newspaper advertising pioneer and now founder of Tacoda Systems, an online advertising measurement applications company, thinks that such advertising will represent 5% to 10% of all online marketing spending within three years.

Morgan says he’s a “huge believer” in product placement advertising online, because: “1) It is effective; look at how placements in movies can create enormous cultural and brand shifts — such as Ray Bans in the movie Top Gun, etc.

“2) Advertisers are getting more practice at it and are getting better at it. With new FCC rules, placements are all over broadcast television now. No more generic cereal at the table or generic soda; we see branded chips, cereals, soda, doughnuts, Apple laptops all over TV now, and entire books now being sponsored by marketers and published by traditional book publishers.

“3) Consumers can now take their media a la carte without having to consume adjacent advertising (remote control, TiVo, blockers online).

“4) We can now target, track, and report on it for online advertising. An ad server can dynamically deliver text into the middle of a story or a branded PDA into someone’s hand just as easily as a banner ad or button.”

Outside of news sites, which haven’t generally been as hip to the trend of product placement within online content as more marketing-oriented sectors of the Internet, the concept has picked up considerable steam over the last two years, according to Adam Boettiger, founder of I-Advertising, a community of online advertising professionals.

Boettiger says the growth of online product placements is a result of this being an effective Internet advertising technique. “It didn’t happen as a way to make up for poor performance of other forms of online advertising,” he says. “Contextual placements are quite effective for branding and awareness.”

No one’s going to argue that product placements have any place within hard-news content — for obvious ethical reasons — but there is opportunity elsewhere. “I think that most of the insertion will be into entertainment content, where there is no expectation of editorial ‘church and state,'” says Morgan.

For instance, fashion features can include clickable images of clothing that links to marketing information and online purchasing services. Says Morgan: “I could imagine inserting branded furniture and appliances into 360-degree images of apartments and houses that users are searching in online classifieds. … I can also imagine ‘blue screening’ Webcams of live sporting events where the media companies’ advertising images are placed around the field in place of or in addition to those that were sold by the stadium.”

Obviously, we’re getting into territory where weighty ethical considerations come into play — a melding of editorial and advertising that will make publishers and especially editors uncomfortable. Nevertheless, this is a trend that online advertising staffs at online news sites should be contemplating today. Start thinking about product placements now and develop some strategies.

Like it or not, this is the latest development in online advertising. Strategize now, and you won’t be in a position like the television networks as DVRs start to rock their worlds.

Does the Web screw cartoonists?

In my most recent E&P Online column, I suggested that the trend of newspapers moving comic strips to the Web is a good thing — in the case where a strip is going to be removed from the print edition anyway. A feature’s fans lose the convenience of finding the strip in their daily print editions, but at least they can still find it online at a newspaper’s Web site. It’s better than having a comic killed completely by a publisher.

(This applies to many types of features that are no longer deemed appropriate or worthy of print, but which still retain a loyal audience that doesn’t want to see them go.)

But I neglected to mention the down side of this issue, according to Jim Toomey, who draws the “Sherman’s Lagoon” comic strip for King Features. Toomey pointed out how this trend — while it may be a nice benefit to publishers — is actually terrible for cartoonists.

“We shouldn’t be giving editors an easy, cheap — sometimes free — way to placate angry comics readers by telling them, essentially, ‘we haven’t really cut it, just go to our Web site,'” Toomey says. “It’s a win-win for the paper because they drive traffic to their site — especially the younger viewers that tend to like most of the less-established strips that were cut — and they get a leaner budget. But, it’s a lose-lose for us, the syndicates and the cartoonists. We lose a powerful weapon: angry readers.

“Readers have managed to help reinstate “Sherman’s Lagoon” in at least a dozen papers, many big ones. And, of course, we lose revenue, because online newspaper sites pay nothing or next to nothing. I think online revenues make up about 2% of my revenue,” he says.

Toomey’s view is that the syndicates need to tighten up their rules about newspapers and their Web sites. “If a paper cuts the print version of a strip, the syndicate should require that they stop running the online version, or at least pay rates comparable to what they paid for the print version,” he says. “The way most of the deals were struck, the syndicate ‘threw in’ the Web rights with any print sale. Now, budget-sensitive papers are cutting the print and trying to keep the Web rights. And, so far, the syndicates are letting it happen.

“This is wrong. I can’t give my content away. If I can’t make a living as a creator of content, then I need to find another job. I’m all for developing newspaper Web sites, but it needs to done in a logical, fair way. In many cases, what’s happening now is basically intellectual property theft in the name of developing an online business, a la Napster.”

Cartoonists like Toomey are, of course, talented at expressing such opinions with pictures and a handful of words. Reflecting on this issue, Toomey was inspired to draw this strip, which ran on “Sherman’s Lagoon” on Jan. 14.

Other recent columns

In case you missed recent Stop The Presses!, here are links to the last few columns:

Use Web To Supplement Your Print Edition, Wednesday, Jan. 9
Preparing For the Upturn, Wednesday, Dec. 19
Industry Must Cooperate To Save News Sites, Wednesday, Dec. 12
Tying Print To Online During Hard Times, Wednesday, Nov. 28
Using the Invisible Web In Research, Wednesday, Nov. 14
Sports League Sites Battle Media, Wednesday, Oct. 31
Previous columns

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