Simon Houpt
Globe and Mail
Friday, Aug. 21, 2009

In its 56 years, Cheez Whiz has saved many an exhausted parent, desperate and at a loss for what to feed the kids at mealtime. But who ever thought it might be part of a strategy to help save network television?

Last fall, an episode of the Canadian sitcom Corner Gas featured a scene in which the star, Brent Butt, engaged in a comical roundelay with a customer about the too-bright processed cheese food. Over the course of the season, Cheez Whiz went on to appear almost a dozen more times, snagging three precious minutes of air time.

In its six years on air, Corner Gas may have been the most successful scripted show to adopt so-called product integration, in which commercial messages are woven into the plot or dialogue. But it was an exception on the Canadian television landscape, for even as the practice explodes in the United States, advertisers here remain wary.

No one believes integration will replace conventional ad campaigns. Still, as viewers increasingly avoid conventional 30-second spots, leaving fewer opportunities for advertisers to get their messages across on television, that wariness may prove a costly mistake that leaves Canadian marketers behind and Canadian TV producers without sufficient funds to make homegrown comedies or dramas.

Product integration is baked into the DNA of television, reaching back to its earliest days, when shows were wholly sponsored by packaged goods companies and other advertisers.

But for decades afterward, church and state remained separate: Content was inviolable, not to be stained by advertising. Modern product integration developed slowly in the United States, with shows like Friends, where a plot line in a January, 2000, episode revolved around a specific piece of furniture from Pottery Barn, and the Fox drama 24, which signed deals with Ford Motor Co. that gave the car maker prominent play. Meanwhile, reality TV producers, who were not creatively handcuffed in the same way as creators of scripted shows, made billboards out of their cast members, throwing drinks, electronics, and other shiny new products into their hands.

Today, viewers who objected to the ham-fisted wedging of these ads into their favourite shows just a few years ago largely shrug off the commercial placements, not only on reality shows like Survivor, Top Chef, and American Idol but also on Emmy-winning fare like The Office and 30 Rock.

When Ben Silverman, the co-chairman of NBC Entertainment, left the network last month, he did so to join up with Barry Diller’s IAC/InterActiveCorp for a new venture that will create branded entertainment: television shows seamlessly blending advertising into the content.

Canadian advertisers say that’s a game they can’t hope to play. Marketers here note that deals securing placement of a major brand on a U.S. network are struck between multinationals who have no time to worry about the concerns of a branch office in Toronto, which may believe a different creative approach is required to appeal to Canadian consumers.

And there is the always-present problem of scale. « It’s a lot more effort to do product placement. There’s a lot more management; the advertiser wants to be on set to make sure the product looks nice, » said Greg McLelland, vice-president of national broadcast sales for CanWest Global Communications. « If you’re a U.S. network getting a $200,000 fee for placement, that kind of money is worth the trouble. But as a Canadian broadcaster charging one-tenth of that, $20,000 just isn’t worth it. »

Some producers grouse that integration has added enormous complications without yet providing much benefit: Every branded product in a shot, even those secured for free, must be cleared first with the network. Standard contracts regularly hand as much as 60 per cent of product integration revenue to the network, while producers are the ones sweating the fine points of making sure the advertising client is happy.

Canadian networks have made enormous strides in the area, especially on reality TV shows. CBC lists about a dozen shows that have woven products into the storyline, including Being Erica, Little Mosque on the Prairie, and Heartland, and says its integration revenue from non-sports shows has gone up 1,000 per cent in the last two years, though it refuses to reveal specific numbers. CanWest and CTV are also aggressively expanding their integration.

But there are still sharp growing pains, in part because selling ads on TV and creating shows require vastly different skills. Janice Dawe, the vice-president of White Pine Pictures, which produces the CBC drama The Border, says the network’s suggestions of product integration on her show have been uninspired.

« They have come to us with a couple of opportunities, but there’s been no consummation of a deal, »

she said. « The kind of product placement a lot of brands want is distasteful to producers because it’s too overt to put into a storyline. Like, one character will say, ‘Oh God, I have a headache,’ and another will say, ‘Oh, you should try Advil!’ CBC has come to us and said to our story department, ‘Could you work this in?’ and we just go, ‘Uch!’  » Still, Ms. Dawe insists, she would be happy to integrate the right product in the right way.

But there is also a problem of schedules. Ad campaigns often operate with shorter lead times than the typical Canadian program production cycle. In the United States, shows are often written and shot mere weeks before going on air, especially toward the end of the season, which allows an advertiser to squeeze in a product at the eleventh hour. Producers here require far more notice.

One veteran ad buyer says the problems are deeper than that, rooted in cultural differences. « We are, by virtue of our Canadianism, risk averse, » said Pegi Gross. « Paying for product placement on a show that hasn’t been shot yet, it’s not something we would normally do. »

The effectiveness of product integration is notoriously difficult to measure, for while the advertising industry has decades of historical research on how commercials affect the perception
of a brand, the return on investment of getting a product into the hands of a character is harder to gauge.

And the recession may have set back the practice even further in Canada. « The advertising environment has been badly hit, » noted Ms. Gross, who said that many sales representatives at radio and television stations have lost their jobs over the last 18 months. « Those who are left are so busy trying to sell conventional 30-second spots, it’s hard to find somebody and
pay them a salary to go out and sell what is a high-risk venture right now. »