The Hindu Business Line : A service of value

A fashion show sponsored by Lux woven into the storyline of the popular Star Plus soap Kahin To Hoga, or an actor watching a Fair & Lovely commercial, again as part of the storyline of yet another Star Plus soap, Kumkum — product placements, be it in television or films, are definitely on the rise. From when product placements accounted for just three per cent of the overall ad spends of brands in 2004, it went up by six per cent last year and analysts predict that by 2007, product placements would include almost 12-15 per cent of the total advertising spends of brands.

"Today, we have 48 times more commercials than we had 10 years ago. Therefore, it is necessary to invade the content," says Atul Phadnis, Chief Evangelist, Media e2e. Though brand placements are growing rapidly, metrics to quantify them are missing. "Most media planners and buyers are flummoxed as to how they should justify the price. If Lux appears in a programme 10 times, should its value be calculated per exposure or should it be according to time?"

In an interview with BrandLine, Phadnis talks about the product placement market in India as well as Media e2e's new placement valuation service, which it has launched in partnership with the US-based placement valuation company, iTVX. The product, Q-Ratio or Quality Ratio, which is a proprietary system of iTVX, reportedly measures the quality of the placement and hence the value deserved.

Excerpts from the interview:

How has product placement evolved in the Indian market?

Product placements have become an inevitable part of television and film presence in India. We are likely to see extreme innovations on this front. Unlike in other countries, we don't have stringent regulations in the context of product placements. In markets such as the UK, product placements are completely banned, while in Canada, one can do placements only in the general entertainment genre and not in the kids' sphere.

Can you tell us about Q-Ratio?

Q-Ratio or the Quality Ratio delves into the quality of the placement, the visuals, how well it has been integrated into the story, based on which we arrive on the value it deserves. We study frame by frame the quality of exposure of the brand and how such exposure helps the brand, and take into account around 50 characterstics of the placement to arrive at the right value.

Now we are studying product placements on reality shows and family dramas on television, and also placements in films. Pepsi, for instance, launched its new product, Pepsi Cafechino, on Sony's Indian Idol. Its brand ambassadors Kareena Kapoor and Priyanka Chopra appeared on the show wearing the same clothes that they had worn in the ad.

We call this a hyperactive placement, as the brand is not just present in the show, but the brand ambassadors use and refer to it blatantly. Similarly, in Bollywood, films such as Virudh feature brands such as Elf and Nerolac, which have been woven into the story.

We are trying to understand how these placements score in terms of quality and what valuations one can do in monetary terms for these placements.

How has the response been?

The response has been quite positive as there is a lot of confusion among media planners about how to justify the pricing set by the production houses. While a Rakesh Roshan may charge Rs 50 lakh for a placement, a smaller producer could charge less. We are the first company in India to offer a service of this kind. There is a definite gap in this space and we are quite confident that this technique will take off.

What are the various advantages of having a proper valuation service in place?

A valuation service would help a great deal in cutting transaction time and increase the number of product placements. Let me give you the example of the US market, where brand placements have become commoditised. In these markets, brands such as Coke, Pepsi and Nike do as many as 2,000 brand placements each season on various shows. In a situation like this, it is crucial to have a quick evaluation system in place.

The Indian market is going to witness similar trends soon. Placements are going to become an inevitable part of television and film presence, and if we want to pump up frequency of placements, we need to have a proper valuation technique in place to cut transaction time.

Apart from placement valuation, which are the other areas that Media e2e plans to venture into?

When we launched Media e2e last year, we were quite clear that we wouldn't get into any line of business where there are existing players. Even placement valuation is a new concept in India. And before this, we rolled out a revenue planning and profitability management model for broadcasters, as a joint venture with a New Jersey-based company, Vistaar.

We will also shortly launch an application for DTH companies.

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