As Seen On TV

Last week provided an interesting window into the future of advertising, on the Internet, TV and everything in between. At this years Upfronts, the annual ritual when advertisers sign-up for large blocks of advertising for the upcoming year, the decision by Johnson and Johnson and Coke not to participate sent waves of angst through the traditional media industry. According to J&J, the decision was driven by an interest in moving away from broadcast year budgeting to the calendar year budgeting, which, in theory, aligns with their business budgeting cycles. Regardless of the reasoning, the move is the first step in away from traditional TV advertising as the primary venue to promote big brands. As significant as this omission was to the TV advertising industry, Interpublic’s announcement that they would be committing ‘multi-millions’ of dollars to TIVO on behalf of clients--including none other than J&J--was equally as significant. The most interesting detail on the announcement, though, was the lack of detail, with Interpublic reps saying only that they would target ‘customized advertising opportunities’ to include ‘broadband and commerce capabilities’. Whatever the shape of the final campaign, its nothing that old fashion TV can compete with today. The reality that consumer-brand conglomerates, not exactly a risk-loving group, would forgo prime-time for the amorphous promise of ‘broadband and commerce capabilities’ must be deflating to networks and their ad execs.

Yet, despite the bad week, help may be on the way. Two companies in particular, Delivery Agent (DA) and Entertainment Media Works (EMW), are trying to bridge the gap between commerce and television. Both companies focus on integrating e-commerce and TV and do so by collecting a list of products from stylists and set designers for specific shows, which they then make available for sale on a branded website. Today, most of the selling is happening on stand-alone sites such as The Seen-On shopping guide, which DA launched with ABC in February. Seen-On has a microsite for most of ABC’s primetime lineup, some of which include fairly mundane fare such as the Dancing with the Stars box set. However, for some shows, the product offering is a bit more portentous with the likes of Gabrielle's Juicy Couture terry tracksuit worn on the April 30th Desperate Housewives. Sold for $164 through Neiman Marcus Online, ABC takes a cut each time one is purchased through Seen On. As it exists today, the arrangement sounds very much like an old-fashioned affiliate marketing model, and for networks, such convergence, albeit crude, is certainly a step in the right direction. When Interactive TV becomes a reality, we may see even more lucrative arrangement like CPC, in addition to what amounts to a CPA model today.

With $15mm of fresh capital from Bessemer, vendors like DA have their sites set even higher. In addition to their branded microsites, DA also offers something called ‘production agent’, which allows ‘on-set cataloging’ for all products worn or used on a show. The hook for producers is that it saves time and relieves them from what was previously a manual, paper-based process. During this cataloging, DA is also building up a database of all the products used on shows they work with. If things go according to plan, rather than just delivering marginal ROI as a time-saver, DA has the potential to become the ebay of product placement; a place where producers list all of their sets and scenes before shooting starts and where retailers bid to have their products included in the hottest shows. If they are successful, this technology has the potential to change how advertisers think about TV. Rather than wondering which 50% of their ad spend was wasted in the latest fall season, such a system could provide more detailed metrics on the correlation between product placement and sales. This ability to track the link between a dollar spent and a dollar earned is a large driver behind Online advertising's recent growth. If DA and EMW are successfull, in ten years time, the Upfronts may be more like bidding for a pair tickets online than the vaudville production they resemble today.