Does it Cross the Editorial Line in the Sand If an Automobile Manufacturer Pays for Its Car to be in a News Photo, Or a Brand Named Ketchup Pays To Be Mentioned in a Cooking Recipe?

Philip Stone August 15, 2005

Product placement is worth in the billions of dollars to movies and television but what may not be so well known is that it is worth in the hundreds of millions to newspapers and magazines. And some advertisers want to see that grow, even crossing that boundary that has traditionally separated advertising from editorial.

It was no accident when last year Traveler Magazine’s editorial pictures featured a Lexus car. Lexus sought the deal. It said it didn’t pay cash – was there a barter deal? – but the car manufacturer admits it is looking for more such opportunities. A new food magazine, Relish, set to debut next February is actively seeking sponsors who want their brand names mentioned in editorial copy such as recipes.

About the closest advertisers got before to having a promotion look like editorial was when they adopted a layout which looked just like a copy of the way editorial stories were laid out on a page, What gave the promotion away to the eagle-eyed reader was that across the top of the ad it would say “advertisement” several times and there was often an advisory at the bottom saying that the copy was written by the newspaper or magazine’s advertising department.

Lexus says what it would like to see in the future are stories written about its product that have the look and feel of the publication and carry the bylines of staff reporters. It is a little hazy on saying how the public would know such “advertorials” were really advertising.  

Such ads would violate the current guidelines of the American Society of Magazine Editors and the organization says it is firmly against product placement advertising. It is revising its guidelines and will issue new product placement rules later this year to strengthen its position. Same goes for the American Society of Business Publication Editors who are rewriting their ethical guidelines for trade publishers.

Lexus says it would also like to see its cars used in magazine layouts that don’t necessariluy have to be about cars – for instance, fashion -- but a car is needed in the shot. And if Lexus was not chosen as that car would it withhold some of its advertising budget from the magazine as punishment? The car company says that wouldn’t happen, but this is all part of the discussions now going on in publishers’ offices as they get closer to eating more of the forbidden apple.

Such issues come at a difficult times for newspapers and magazines that see percentage single digit advertising revenue growth  with some of their traditional advertising spend moving to the Internet. How to make up for the lost revenues, let alone increase revenue? Well, product placements look mighty tempting, but are there limits to how far they can be taken?

According to PQ Media, in 2004, $55.6 million was spent on product placement within US newspapers, and 23% of that went to the top five markets – The Wall Street Journal, The New York Times, USA Today, The Los Angeles Times and the Chicago Tribune.

US magazine product placement is expected to expand 17.5% to $160.9 million in 2005 and newspaper placement is set to grow 16.9% to $65 million. Consumer magazines are expected to earn $16,5 million for product placement, a 69% increase over 2004.

The issue comes at a particularly sensitive time for newspapers and magazines that are supersensitive to ethical issues due to recent editorial problems in using unnamed sources for major news stories that proved to be wrong. Does a product placement fly in the face of publications wanting to reinforce their readers trust? 

What makes product placement particularly intriguing  to advertisers is that when they are done well they are found to be very successful.  A study by research firm OTX on video product placement showed that the more a product was seen to be fully integrated into a program without being obtrusive the more positive the influences to buy the product.

News magazines like Time and Newsweek are known not to touch product placements, but when you get to lifestyle or food magazines just where is the line between showing something that should interest the reader and not overstepping editorial boundaries?

Most agency buyers are pretty savvy on the point. And they warn advertisers against challenging editorial independence. The question becomes just how far the already opening door can be pushed.

Four years ago Sony tried an advertorial in reverse. It faked the effusive quotes of a non-existant film critic within some of its movie display advertising. This month it settled a class action lawsuit for $1.5 million – a $5 refund for each ticket sold.

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