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Old 01-15-2005, 01:31 PM   #426 (permalink)
Cynthetiq
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sometimes the deals themselves become news and some of the more conscious people will at least see it coming...

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January 13, 2005
ADVERTISING
Volkswagen Product Placement on NBC
By NAT IVES

MORE and more, it seems, marketers believe all roads lead to Hollywood. Volkswagen is set to announce today that it has signed a long-term deal with NBC Universal providing the automaker with opportunities for product placement and promotions tied to a number of entertainment programs and events.

The deal, which will cost Volkswagen an estimated $200 million, guarantees the company the chance to place its cars in movies released by Universal Studios or television programs that appear on NBC or sibling networks like Bravo, SciFi and USA. Volkswagen will also be able to promote its vehicles on various DVD releases and at Universal theme parks in California, Florida and Spain.

The agreement, which is for three to five years, offers a steady income stream for NBC Universal, which is controlled by General Electric, and is also a signal that product placement will remain important at Volkswagen for some time.

But no one expects product placement to replace traditional corporate advertising campaigns in the foreseeable future.

"The classical communications tools like advertising will always be there and we will always need them," said Dirk Grosse-Leege, the head of corporate communications at Volkswagen, speaking from Germany. Volkswagen and its dealers spent $661.9 million to advertise in traditional major media in the United States in 2003 and $437.5 million from January through September of 2004, according to TNS Media Intelligence/CMR, which tracks estimated ad spending.

"But product placement is gaining much more importance," Mr. Grosse-Leege said, noting that some of the money to pay for the deal with NBC Universal will come from the budget for traditional advertising.

Volkswagen is not new to product placement, having arranged appearances by the New Beetle in "Shorties Watchin' Shorties" on Comedy Central. But its excursions have been relatively limited.

Other automakers have been less timid. Last year Ford Motor signed a deal securing product placement opportunities in releases from Revolution Studios; the partnership was responsible for the presence of the Lincoln Navigator in the coming Ice Cube movie, "Are We There Yet?" Ford's British division also paid the author Carole Matthews to mention the Fiesta, a model sold in Europe, in two novels. And Ford opened an office this month in Beverly Hills, Calif., to facilitate its entertainment marketing efforts.

But Volkswagen's deal for long-term presence at Universal Studios puts it in a position to catch up fast. It will have an office there to facilitate on-the-set decisions and learn about the process, and twice a year it will invite writers and other participants in its advertising creative process for demonstrations and test drives.

For Volkswagen, part of the motivation is to infuse its ads with some of Hollywood's drama and emotion to sell car models like Golf, Jetta, Passat and Touareg. Its cars are known for technology and quality, Mr. Grosse-Leege said, but not for their emotional tug on consumers.

"We want this to be front and center when people are writing scripts," said Stephanie Sperber, executive vice president at Universal Studios Partnerships, a division of NBC Universal created in June to pursue corporate partnerships across many entertainment platforms.

The deal, the fine points of which are still being negotiated, does not specify how many movies, television shows or DVD's will be pressed into service for Volkswagen marketing. "There is no limit to their exploitation of our assets," Ms. Sperber said.

It is the sort of exploitation, in fact, that corporate executives describe as a reason to collect entertainment assets across many channels. In that light, the Volkswagen deal may be viewed as a dividend from the creation of NBC Universal in October 2003, when the NBC parent, General Electric, acquired the entertainment assets of Vivendi Universal, including Universal's movie and television studios, theme parks and three cable channels.

"This is the first deal that we've done in terms of a marketing alliance since NBC Universal was formed," Ms. Sperber said.

Despite the continued sweep of marketers into entertainment, critics of product placement have not gone away.

Last year Commercial Alert, a corporate critic advocacy group co-founded by Ralph Nader, asked the Federal Communications Commission and the Federal Trade Commission to require on-screen disclaimers whenever product placement appears during a television show. The commissions have said they are investigating the request.

But the bigger threat to product placement may be product placement, should its use continue to accelerate at current rates, said Adam Hanft, chief executive at Hanft Unlimited in New York. "We're reaching the tipping point where overexposure of product placement is going to wind up creating the same kind of wallpaper effect that commercial television has created."

"There will be great traditional marketers and great product placement marketers," Mr. Hanft said. "And there will be bad."
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