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Wednesday, 15 June 2005

The price for companies to integrate their products into TV shows like Big Brother and Australian Idol will only increase, according to a new study conducted at the University of Adelaide.

Claire Sherman, who is studying for her PhD in Marketing at the University of Adelaide's School of Commerce, surveyed 12 key industry players in the field of product integration (also known as product placement), including representatives from the three commercial television networks, client brands and advertising agencies.

Product integration is an increasingly popular advertising concept where advertisers pay to have their products inserted directly into the content of a television show, unlike the traditional method of displaying products in commercials separate from the show.

Ms Sherman says all players in the industry are starting to better understand the success factors and pitfalls of product integration, but due to a limited number of shows where product integration can take place and increasing demand from advertisers, the price of integration is likely to go up over the next five years.

"At the moment there is no exact way to measure how effective product integration is, so pricing deals in a meaningful way is difficult," she says.

"However, the majority of the key industry players that I surveyed thought the price of it would go up, mainly because there are so few shows that it works well with and there's increased demand from more and more brands which are looking to get involved."

Other significant findings from Ms Sherman's survey include:
· The genres of reality TV and lifestyle shows are viewed by the industry as the best avenues for integration;
· The current phasing-in of digital television, and the advent of the personal video recorders such as Foxtel's iQ which can allow viewers to skip commercials, will make integration more attractive to advertisers;
· Product integration within commercial television is being driven by the networks who are the "gatekeepers" of programming and there is the potential for eliminating the need for the "middle man" of advertising agencies;
· Successful product integrations are based on integrity (not littering a show with obvious product integration), the relatedness of the product, audience and the show, and seamless inclusion in the show's plot;
· Product integration is too new to stand on its own - it must be carried out in conjunction with traditional commercials.
· Specialist integration companies are delving not just into TV but also into many other mediums of branded entertainment to capture an increasingly media fragmented audience.

"Product integration is still quite new, but it's here to stay," Ms Sherman says.

"The overall feeling I got from my survey of industry is that they are still working on the best way to utilise it.

"For the next part of my PhD I will be surveying the television viewers themselves to see how they are affected by the integration of brands into their shows and which factors create results for brands, which also promises to yield interesting results."