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RDF Media, Omnicom's Full Circle team to place products

The TV producer and the ad agency plan to make shows on behalf of sponsors and sell to networks.

March 23, 2009|Meg James
  • Steve Grubbs, CEO of Omnicom Media Group Entertainment & Sportscaption type.
Steve Grubbs, CEO of Omnicom Media Group Entertainment & Sportscaption… (Jeff Connell / Camera One )

Advertisers for years have sought to have their products weaved into the stories of television shows. The positive image of a well-known personality gulping a cola, tooling around in a recognized sports car, or shaking flakes from a cereal box can boost sales.

Unfortunately, for advertisers, the plugs don't always come off as intended. The products sometimes have been handled clumsily by TV producers, confusing the message advertisers want to send viewers or, worse, casting the product in a negative light.

Now, in an effort to gain control over how products are integrated into shows, one of the world's biggest ad agencies and a major producer of reality television are teaming up to make programs on behalf of sponsors and sell them to networks.

They hope the networks, which are under intense economic pressure and face eroding audiences, will be willing to buy the shows in part because they should cost less.

Under the venture, RDF Media, which makes "Wife Swap" and "Secret Millionaire," has taken over management of Omnicom Media Group's Full Circle Entertainment, a firm formed five years ago to develop TV programs to showcase advertisers' products. Omnicom's clients include major sponsors Pepsi, McDonald's and Visa.

The deal is the latest example of how the relationship between advertisers and the networks has been thrown into upheaval as television's economic foundation is crumbling. Advertisers are spending less and the value of their favored marketing tool -- the 30-second commercial -- is diminishing because of viewers' increased use of digital video recorders, including TiVo, which allows viewers to skip commercials.

"The prime-time economic model is under increasing pressure," media analyst Larry Gerbrandt said. "If they bring advertisers in on the ground floor then that might offset some of the production costs. That also means these shows can be profitable even with lower ratings."

At the same time, Gerbrandt noted, Omnicom and RDF will have to be careful about turning the programs they produce on behalf of advertisers into thinly disguised infomercials. "To work, the show still has to stand on its own," he said.

For more than 50 years the networks have developed the programming, controlled the content and invited advertisers to participate. The shows produced by the venture would flip that relationship by putting the advertisers in the driver's seat and the networks more in the passenger's role.

"This alignment with RDF gives us a direct line into a major production and distribution company, which will help us create content that will directly tie our clients' brands into that content," said Steve Grubbs, chief executive of Omnicom Media Group's entertainment and sports division. "Advertisers are trying to get closer to the content, and this allows us to make a major step in that direction."

RDF Media, one of Britain's leading TV production companies with operations in Los Angeles, has successfully produced reality shows in which inserting brands is a common practice. Omnicom, which has relationships with the networks, believes that by partnering Full Circle with RDF it will have a leg up.

"The business has evolved, and everyone has gotten into branded entertainment," said Robert Riesenberg, chief executive of Full Circle. "We determined that we needed to be in business with a company that had production and distribution capabilities."

Discussions on the venture began more than a year ago between Riesenberg and RDF Media USA CEO Chris Coelen. With the downturn in the economy, advertisers have been spending less, providing another reason for the two groups to combine forces.

"It is a chaotic time in the television industry, and out of chaos comes opportunity," Coelen said. "At the end of the day, advertisers support most everything on television and now online. With this, the advertisers will be able to get in on the ground floor."

There could be other benefits. European regulators are in the process of relaxing restrictions that prevented television shows from featuring products, Riesenberg said. Having ties to an international production company eventually could allow advertisers another vehicle to promote their products overseas.

"RDF is a company with global distribution," Riesenberg said.

"There could be an explosion [of brand integration] in Europe as well."

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meg.james@latimes.com

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