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Cross-marketing deals between cable networks and advertisers proliferate 5/09/2004 08:00:00 PM Eastern

New cross-marketing deals—where advertiser and networks shape a special or series from the plot line to the marketing campaign—are becoming cable's bread and butter. This year, they're a big part of cable's marketing plans.

Sales executives and media buyers estimate that cross-marketing arrangements account for roughly 25% of the $6 billion in upfront money that cable networks booked in advertising last year. Over the next five years, many expect cross marketing deals to account for at least 40% of ad spending on cable.

As programming costs rise for networks and producers, the issues of competition and clutter compel advertisers to become a much more active partner in guiding new entertainment.

Time Warner's TBS and TNT networks have experimented with various arrangements over the years, from sponsorships to product placements. Now those networks are seeking even tighter collaboration with marketers, says Linda Yaccarino, executive vice president and general manager for Turner Entertainment Sales and Marketing, which oversees both networks.

Because of consolidation, networks are increasingly trying to leverage advertising and promotions into creating strong brands that live off the TV screen—particularly networks like Discovery, USA, Sci Fi, and Hallmark.

Each has learned to market its own brand identity strategically to gain better advantage in establishing itself as a worthy marketing partner for advertisers.

"Advertisers are attracted to ratings, of course, but, when it comes to cross-marketing, the brand is most important because being able to offer them a unique association is an added bonus," says Bill Abbott, executive vice president for national advertising sales at Hallmark Channel. "Our brand needs no introduction. We're well-established, with Hallmark being around for 50 years. The identity helps them get it right away."

But most networks' identities don't precede them the way Hallmark's does. And some networks have other problems. Perhaps more than most general-entertainment networks, TBS and TNT faced numerous challenges in getting advertisers to partner with them on cross marketing initiatives. Several media buyers believe that, because the channel relies so heavily on repeats and old films, such as its James Bond series, TBS and TNT aren't prime spots for cross-marketing efforts.

"It would be interesting to see a Miller Beer or a Volvo commercial inserted into a old rerun," one media buyer notes . "But I don't mean that in a positive way."

Not so fast, says Turner's Yaccarino. TNT has figured a way around that. Taking reruns of Law & Order, the network is currently working with Pfizer, Listerine, Rolaids and Sudafed on wrapping the show around a branded vignette that recaps the show's first half-hour. The sponsorship includes co-branded "tune-in" spots and on-air billboards. Another fitting partnership Yaccarino points to is the "Kleenex Tearjerker," a melodramatic movie-of-the-week that will obviously get a plug in the title alone and then in spots during the films.

"We don't just want to have advertisers saying 'Law & Order
is presented by...,'" Yaccarino says. Turner has worked with Pfizer on shaping the update segments, each of which is sponsored by one of several advertisers on a rotating basis. "We spend a lot of time with the client trying to figure out what the face of the TBS and TNT viewer looks like. Then, we ask what is the face of the consumer who buys Pfizer's products. It's where those faces intersect that guides us in striking the right balance."

Making the old new again is also part of Hallmark's cross-marketing effort. Earlier this year, Hallmark created its Sponsorship Solutions Unit to find advertisers that would like to put their signature on some of its movies, the way, in fact, that Hallmark Hall of Fame movies specials are presented on CBS.

In May, Kraft Foods signed up as the exclusive national sponsor of the movie The Parent Trap,
staring Lindsey Lohan, who is currently appearing on theater screens in the comedy Mean Girls. Not only does Kraft get sponsorship treatment when the movie airs, but it gets mentioned in every promotional spot and any print advertising.

Each of the first two airings of The Parent Trap, on June 13 and 24, will contain only eight total minutes of national advertising—all by Kraft—in keeping with Hallmark's mandate to develop high-visibility, low-clutter environments for advertisers, Abbott says.

Under terms of the agreement, Kraft's advertising time will include customized, 30-second vignettes showcasing multiple Kraft brands, including Oreo, Kraft Macaroni & Cheese Dinner, and Oscar Mayer meats.

"We anticipate that we'll do many deals like the Kraft/Parent Trap
deal in the upfront," Abbott says. "We've had a number of conversations with an assortment of different clients. It's the exclusivity and the lower commercial load that's the appeal, as well as associating with a famous brand that has 4,300 Gold Crown stores. That's where the marketing credibility comes from."

Hallmark is also pushing product placement in films. The snag is the company's tradition of doing period dramas: It's hard to stick an SUV in one of those.

Although USA Network doesn't have its own stores, it wants a presence in retail outlets, too. For upcoming original movie The Last Ride, airing June 2, the
network is putting General Motors' Pontiac literally on the marquee. It's an action-adventure drama starring Dennis Hopper. USA's promo: "Twenty-five years ago, they used a '69 GTO to get away. Now they'll use a new one to get even." USA, a division of Universal (all of which is likely to become a part of NBC this week), also will use Universal's DVD-marketing division to create home-video opportunities for advertisers.

"The GM deal touches on all marketing platforms, from network to online to our DVD group at Universal," says Kevin McAuliffe, senior vice president, integrated brand entertainment, USA/Sci Fi Networks. "We have been jointly developing the creative with GM for the movie, which started back in March, immediately after we signed the deal. That's unprecedented."

While the film stars Hopper and Chris Carmack, of Fox's The O.C.,
it's the Pontiac GTO, in both its classic and modern forms (the 2004 model boasts 350 horsepower, by the way), that takes center stage, serving as a catalyst in bringing the characters together.

McAuliffe notes that GM and USA talked for year trying to find the proper venue for advertisers, given the specific timing of the marketing of new vehicles and the long production period for most movies. "It was a matter of a confluence of their needs and ours."

There will be on-air and off-the-air promotion for both the car and the networks. "It's as comprehensive as a piece of creative can be," McAuliffe says. "After that, we'll launch a DVD that will move out into the normal retail channels. Our home-video division will carry the ball at that point." The DVD, of course, will feature unique content about the introduction of the Pontiac GTO.

In Discovery's case, its home-improvement show that airs on its TLC channel, Trading Spaces, has practically become a department in Home Depot's cavernous emporiums.

"We've had a deal with Home Depot for less than a year," notes Joe Abruzzese, president of ad sales, Discovery Networks US. "We offer them exclusivity, and the stars of the show all wear Home Depot logos. All the products are supplied by Home Depot, and we do seminars at the store locations."

The deal was put together by Interpublic Group media shop Initiative, New York. The media agency recently did an awareness study, tracking the affects of the Home Depot association with Trading Spaces.

"Initiative tracked consumers before the show started and a month after it first aired, and the results were stark: Consumers cited Lowe's as the most recognized home-improvement store, but, after the show began airing, Home Depot was the most-recognized," Abruzzese says. "That kind of overnight [recognition] is unheard of."

March