For Richer or for Poorer

Until recently, broadcasters (like the publishing world before them) had obediently observed a strict separation of church and state: advertising had its job to do, editorial had its job to do, and never did the two meet. However, as a limited...
July 1, 2000

Until recently, broadcasters (like the publishing world before them) had obediently observed a strict separation of church and state: advertising had its job to do, editorial had its job to do, and never did the two meet. However, as a limited number of dollars are shared among a seemingly unlimited number of outlets, sponsorships are blurring the line of demarcation. The result is a revitalized source of funding dollars. Lifestyle programming, utilizing the very goods and services advertisers are marketing, is taking advantage of these dollars.

Phil Teeman, VP advertising sales at Discovery Networks Europe, recently announced a partnership between Discovery Home & Leisure and U.K. do-it-yourself retailer B&Q to produce 150 x 5 minute instructional programs. Titled How To with B&Q, the series airs on the Home & Leisure channel, in B&Q stores and in a compact one-minute version on the Discovery Europe website alongside a handy link to B&Q’s own site. Teeman applauded the deal as ‘a step-change in the broadcaster-advertiser relationship,’ enthusiastic that ‘Discovery Home & Leisure and B&Q are stretching the boundaries of sponsorship.’

Broadcasters and producers alike are concerned with maintaining the editorial integrity of a program, but the parameters that dictate the scope of a sponsorship vary from broadcaster to broadcaster. ‘We’re continuing to find creative and healthy ways to involve sponsors,’ says Barbara Williams, senior vice president, programming for Life Network and HGTV in Toronto, Canada. ‘We recognize that we need to do that and we’re trying to do that carefully.’

One method Life/HGTV uses to include sponsors is billboard advertising. At the start and/or finish of a sponsored program, a message appears informing viewers the program they’re watching is brought to them by company X. In exchange, the show can reflect use of that company’s product. Explains Williams, ‘On a cooking program, we might have a pasta company that’s interested in sponsoring the show. We will not hold up their box of pasta on the show or put their name in the content of the show, but we might promise them that of all the recipes made, at least five of them will use pasta.’ She adds, ‘If the way we encourage them in programming to buy a billboard is by guaranteeing that five of the recipes will be about pasta, then we’ve done something in programming that drives sales – and that’s what our business is about.’

The logistics of each sponsorship package vary from project to project. According to Williams, billboard sponsors still pay for commercial time. The option to contribute directly to production costs or to provide product for the set, however, depends on the details of each sponsorship.

My parka or your parka?

The fact that tool sheds need tools, chefs need cookware and trekkers need gear often initiates the relationship between broadcasters and their sponsors. ‘[For] our expeditions the equipment component is a significant factor,’ says Peter Englehart, senior VP of programming and production at the Outdoor Life Network in Stamford, U.S. ‘The number one factor is safety. The number two factor is the quality of the show. Down the list is product placement opportunities that have a chance to generate additional revenue. I’m not opposed to our ad sales department working with the organizers of an expedition to wear certain apparel if it will help us with a sponsor. If safety or quality of the show is compromised, however, those conversations immediately cease.’

North Face, an adventure outfitter, provided parkas

and other apparel for Raid Gauloises (airing in August), OLN’s US$300,000 program based on the Raid Gauloises adventure race, which starts in Tibet and ends in Nepal. North Face is credited at the end of the program and the broadcaster is now in negotiations with the retailer about an upcoming production for which it’s considering funding part of the budget. ‘But, the reason we chose North Face was not because of advertising,’ clarifies Englehart. ‘We thought they had the best parka for the high altitude reporting we were going to do.’

Many broadcasters will remove logos or names from products that appear in a program. Ironically, viewers often contact stations to find out specifically what products are used. As a result, some broadcasters are cooperating with sponsors to provide consumers with the information they want. Commercial broadcaster sbs6 in The Netherlands airs a sponsor-funded program produced by Bussum-based Tenfold titled Renovating with Viewers that coordinates the products used in the program with the products showcased in its sponsor’s mailed catalogue. ‘[One sponsor] has a house-to-house catalogue that goes out every few weeks and our program is partly based on that,’ explains Claire Van Beek, project manager for sbs6 and Net5. ‘Once a month we meet with the sponsor and the producer explains what ideas they are going to do. The sponsor then says: ‘Well, you may want to use this and this.’ But they don’t decide what is going to be in the show.’

sbs6 owns 50% of the rights for Renovating and receives a margin on the production profits. Tenfold owns the other half. Advertising that appears during Renovating is sold separately by sbs6′s advertising department, but the show is fully funded by sponsorships arranged through Tenfold, who is obligated to generate slightly more than the total budget. This is common practice for programs that serve a healthy market and generate multiple sponsors. SBS6 reasons that they – like the producer – should profit directly from a show in which sponsors are allowed to insert information. In the future, SBS6 plans to find sponsors itself. Says Van Beek, ‘We’re switching to a formula where we take more risk ourselves. We find it’s better to have contact with the sponsors so we know what we’re offering them and we know what they expect.’

It’s not just for the money

The Web is also a useful tool for lifestyle broadcasters to service their viewers’ consumer needs. Burton Jablin, senior VP and GM of HGTV in the U.S. says the station received 200,000 calls, letters and e-mails last year, the majority of which inquired about products used in a program. ‘We decided the best way to deal with that is to provide information on our website. If we don’t have the information [online], we’ll direct you to where we think you can get it.’

HGTV’s web directory is provided as a service to viewers and is not paid for by the brands involved, but sponsors are finding their place on the Web. OLN’s REI Great Adventures is wholly financed by Seattle-based outdoor-outfitter and adventure travel company REI. Explains Englehart, ‘We’re always looking for good adventure travel series. Conversely, REI was looking for a media partner that could provide them with integrated platforms. It’s a good marriage because we meet each other’s objectives.’

Each episode of the 10 x 30 minute series features a different adventure in a different destination. On REI’s website, viewers can preview and review episodes, research and buy apparel used on a trip, get performance tips and link to the OLN website.

Editorial content is decided by OLN, REI and Charlie West Productions in California, which was commissioned by OLN to produce the series. Explains Charlie West, ‘The network and the client give me a sense of what they perceive the target demographic as being and then we come up with a range of different subjects, which not only span different interests, but different skill levels.’ Says Englehart, ‘The production challenge is to provide a program that has good information for the viewer, but doesn’t appear too much like an infomercial because it also has to accomplish REI’s marketing objectives.’ Advertising during the program features a normal array of paid advertisers.

West specializes in adventure travel series and notes that working with a sponsor that also works in the adventure business has significant perks. ‘I can spend three weeks working on logistics and organization tasks and REI can get it done in a day and done better,’ he says. ‘It’s very efficient and I’m constantly impressed. Travel is probably the most complicated and financially unpredictable area of our whole production scheme. If I want to do a diving story in the Baltic Sea we have to find what airlines go into the area and what press relationship deals we can come up with because [being charged for] over baggage is a huge sum of money. We have to find hotels and guides, and we have to research the story to see if there is a story. REI has people who do this sort of thing every day. When we come up with a direction, they have the logistics plan complete in nothing flat.’

Alison Rice, director of programs for the U.K.’s Travel Channel concurs. ‘Tour operators often help with land arrangements and flights and give us a lot of information when we’re out in a destination,’ she says.

The U.K.’s Independent Television Commission (ITC), which grants commercial broadcasters the license to broadcast, has strict rules governing what broadcasters can and cannot do in sponsorships. If a tour operator provides services to a lifestyle broadcaster, the channel can indicate at the end of the program that it vacationed with that company. Under ITC regulations, two other tour operators who travel to that destination must also be named. Billboard sponsorships and products placed in the context of a show without logos are also acceptable, but a sponsor can entirely fund a project under limited circumstances. ‘I see a lot of programs whose destinations have obviously been paid for by a hotel,’ explains Rice. ‘We would not be allowed to do that for broadcast in the U.K. on a commercial channel. I spend a lot of time explaining this to producers from other countries.’

The proposal

Producers pitching broadcasters a project with sponsors already in place can expect mixed reactions. ‘Sometimes producers come to us with interest from a sponsor and others come saying they have a deal with a sponsor,’ says Williams. ‘If they already have a deal that includes obvious product placement or control of content in a way that we’re not comfortable with, then we can’t get involved with the show. If they come to us and say they have interest from a sponsor, we discuss the nature of that interest. If it’s a hotel providing accommodation, an airline providing travel, or a caterer providing lunch for the crew, I don’t have a problem with producers cutting those sorts of deals and acknowledging those people in the credit role. Producers do a lot of that stuff in the lifestyle world.’

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