Brand Me, Baby!

Ask Jarrod Moses: From beauty pageants to sitcoms, it's all about product placement. Is this billion-dollar business the future of TV advertising?
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In the subterranean expanse of the exclusive BLVD nightclub in Lower
Manhattan, gorgeous Shandi Finnessey, Miss USA, is talking to a guy with an
admiring look in his eye. But he's not admiring the obvious. He's actually
paying attention to what she's talking about: The epic silliness of trying to
swing a bat in the celebrity softball game during baseball's All-Star break,
while wearing her Miss USA sash—per pageant co-owner Donald Trump's orders.
He insists she wear the cumbersome thing at all public appearances.

"God bless Donald Trump," Jarrod Moses says later, once he and Finnessey
have gone their separate schmoozing ways. "He's doing the right thing."

Moses, 34, is CEO and president of Alliance, a feisty unit of the ad
giant Grey Global devoted to the integration of brands and entertainment. The
embedded advertising business is burning through TV like wildfire. Frank Zazza,
CEO of iTVX, which measures the value of product placement, says it will become
a billion-dollar industry within the next year.

From Survivor's notorious brand
flag-waving for about $12 million a pop to The
Restaurant
's naked AmExhibitionism to the Queer Eye for a home-furnishings ad buy, this retro
marketing tactic (Texaco Star Theatre, anyone?) is transforming the way
Americans experience television. CBS says a handful of its scripted shows are
slated for product integration this season, and The WB has established a
"Preferred Partnership" program that gives advertisers sole product-placement
rights. (Procter & Gamble took What I Like About
You
, while Verizon dialed up Smallville.) But dropping brands is child's play
compared to the impact sponsor-produced content could portend.

Taking The Restaurant's lead—its
production costs were underwritten last year by AmEx, Mitsubishi and Coors
Brewing—ABC's drama The Days followed
suit. It was bankrolled by the WPP Group's MindShare media shop, which intended
to recoup its investment with ad time, product placement for clients and a
share of any syndication money. (MindShare and Alliance may become partners if
WPP's rumored interest in buying Grey Global comes to fruition.)

Branding Bonanza

Still, not everyone has a mania for "advertainment." The trend has
alarmed the folks at the Ralph Nader-affiliated Commercial Alert.

"It's part of the commercial takeover of every nook and cranny of our
lives and culture," says Executive Director Gary Ruskin. The watchdog group
filed complaints last year with the Federal Trade Commission and the Federal
Communications Commission, seeking clearer viewer notification of brand
embedding.

Ruskin wants to see an on-screen alert when, say, a Reebok-wearing
Survivor competitor munches Doritos. Having
successfully stopped search engines from letting advertisers pretend their
pitches were search results, he says, "We think we're on strong legal ground."
He expects a ruling by the end of the year.

However, as far as the industry is concerned, the genie is out of the
Pepsi bottle.

Alliance is still a relatively minor player in a business where, if
reality-TV kingpin producer Mark Burnett sneezes, Kleenex bids for the
tissue-placement rights.

iTVX's Zazza sighs when asked about Alliance's position in the pecking
order. "Every agency has a division going after this stuff," he says. Indeed,
Moses, usually a man of Trumpian self-confidence, is shy when it comes to
releasing financial information. His company may be small, but the
Rocky-obsessed cruiserweight amateur boxer
is a big man with large ideas. This is someone who went to Uzbekistan in his
early 20s after the fall of the Soviet Union to help American investors launch
various enterprises that include a baseball team.

If there's an urgency in the way he's pushing the TV-ad world now—his
latest project is forming an ad-funded "think tank" of Hollywood producers and
writers to create brand-friendly content—Moses comes by it honestly. Ever
since the death of his physician father from skin cancer at 40, when Moses was
12, he has approached life with a "balls to the wall, do as much as I can as
fast as I can because you never know how long your life is going to be"
attitude.

That explains his presence at BLVD.

Alliance had engineered a collaboration between CoverGirl and Atlantic
Records on a philanthropic project called CG Vibes. This was the launch. Miss
USA was there because the company had brokered a CoverGirl logoed interview
segment in the Miss Universe pageant.

The spot is the show

While there, the ever-networking Moses ("I roll about 100 calls a day")
ran into an executive from Lava Records—the music company at the center of
reality series On the Road, which debuted on
Spike TV in July. It follows eight contestants vying for a yearlong job at Lava
by trying to be the best gofer on the band Sugar Ray's summer tour. An Alliance
client, Kia Motors, is featured prominently as the contestants use Kia Spectras
for their mad errand-running—not only to win the Lava job, but also a new
Kia.

This is better than product placement. This is a show Alliance created
for the automaker, which bought a late-night
time slot on Spike. Though On the Road's
time-buy status made it a quasi-infomercial, it looked persuasively like
regulation reality TV. Kevin Kay, Spike's executive vice president of
production and programming, says he regards it as "an innovative marketing and
programming opportunity for the guy-oriented cable channel.

And it answers the ad clutter concern.

After all, as commercials increase, eyeballs-per-spot decrease and
TiVoification ramps up, embedding brands in content from inception—rather
than just shoehorning it as placement and "script write-in"—looks more
attractive.

"The idea of producing programming that is self-funded, that we own, is
something we want to do for two reasons," Moses says. "One, it's the future of
TV. Two, I want clients to know we're in this game with them. We're not just
asking for their money, then sitting back and collecting a percentage. We're
going to fund it with them. Everybody's going to have skins in the game."

When he opened Alliance eight years ago, he was "literally walking from
studio to studio and network to network, knocking on doors" in Los Angeles
trying to promote strategic partnerships between producers and brands. The
reaction was so chilly and future so uncertain that he rented a car for two
years because signing a lease seemed overly optimistic.

Productive partnerships

A breakthrough came in 1998, when the fledgling WB network commissioned
Moses to find new marketing strategies. He hammered out a collaboration between
J. Crew and a new show called Dawson's
Creek
. The good-looking Dawson's
teens would wear the clothes on-air, and the J. Crew would devote an entire
catalog to the show, featuring the actors. Dawson's
Creek
was an immediate hit, J. Crew got a healthy bump in sales and
everyone "saved millions in marketing," Moses says.

But as Moses did the Hollywood deal-making dance between content
providers and the ad industry, he had a revelation. He became convinced that
talent agencies and management groups were compromised by their mixed
allegiances. Was the celebrity endorsement good for the client-brand or for the
client-celeb? He resolved to become a "brand agent." In an age of atomized TV
audiences, Moses says, major brands "touch more people than any TV show."

It was a short leap from one insight to another: Brands could create
their own TV content. Now, producers trying to get ideas off the ground court
Alliance—where the staff has increased "tenfold" in two years to 62
employees. Folders for about two dozen new projects are lined up on Moses' desk
at his midtown office in New York.

Moses surveys these folders under the gaze of Sylvester Stallone in a
Rockyposter on the wall. It's almost
inevitable he'd be a Rocky buff. He grew up
in Philadelphia, his mother, Susan, worked as Talia Shire's stand-in for the
Rocky movies, his paternal grandfather was a
boxer in the Army, and Moses and his older brother Bryce grew up pounding each
other with boxing gloves until they were tired enough to sleep. One thing he's
learned as an amateur boxer is this: "You can't get into a rhythm because the
other guy will figure it out, and then you're in trouble. He'll time your
moves, and you'll step right into a punch."

It's a lesson he applies to business, which is why his "think tank"
project could catch a few competitors off-guard. A consortium of
Alliance-associated companies is hiring Hollywood writers and producers to
create TV pilots tailored to their brands. "Like a mutual fund," he says, the
participants will share the risks and the profits, which would include a cut of
the advertising on shows. Though he's not announcing details yet, Moses says
the project is paying seven-figure salaries, and he expects to have projects up
and running for fall 2005.

But trying to claim Hollywood turf isn't for the faint of heart. Moses
would do well do heed the advice Mickey the trainer gave Rocky Balboa against
Apollo Creed: Breathe deep and keep your chin down.

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