Press Room - The Health Television System Inc.

And Now A Word From Some Sponsorships, Execs Discuss Old Format's New Golden Age
By Paul J. Gough
Staff Writer
Thursday, September 11, 2003

The hot new trend in ad-supported TV apparently may well be one of its earliest formats, advertiser sponsored programming, a panel of industry experts agreed Wednesday during a Kagan World Media conference on the topic.

While the format dates back to the early days of radio, when Jell-O sponsored The Jack Benny Show and the Kraft Music Hall featured crooner Bing Crosby, it's suddenly the rage again as Madison Avenue looks for ways to break through the clutter and hold onto increasingly transient TV viewers.

The Texaco Star Theatre in television's early days featured Milton Berle. Product placement was everywhere in those days, with Benny's announcer Don Wilson always working Jell-O's flavors somewhere into the show. Fibber McGee and Molly's announcer Harlow Wilcox would find a way to bring sponsor S.C. Johnson's Wax into one or the other of Fibber's tales. But in the 1950s, network radio died and TV moved toward multiple sponsors.

Now, more than 50 years after Uncle Miltie's heyday - when Milton Berle hosted the Texaco Star Theater - sponsorship is returning, and in many ways adapting, to a fragmented media world.

At Scripps Networks, programmers for HGTV, Food Network and Fine Living zealously guard the programming boundaries, opting to keep the so-called church and state separate. But that doesn't mean the networks haven't found a place for advertisers to have branded sponsorships and other interstitials, both on TV and offline. The Brand Partnerships unit of Hypnotic creates a short film series for Reebok, and "Terry Tate, Office Linebacker" isn't only one of the most-watched ads at this year's Super Bowl but it's also a major driver of online traffic to Reebok's Web sites.

And another type of sponsored programming has become possible only in recent years with the relaxation of advertising rules for pharmaceutical companies. That's led to the establishment of TV networks like The Health Television System, which features direct-to-patient programming reaching three million viewers at 60 hospitals in the United States and Canada. Programming sponsors include Pfizer, Procter & Gamble, Johnson & Johnson, insurance companies and even Ford Motor Co.

Kathy Kastner, who co-founded the Toronto-based channel in 1993, said that her channel differs from others in that it's more educational than other types of media.

"We're entertaining education but it is education nonetheless," said Kastner. HTS's sponsors, speaking to a patient audience whose lives are saved by the medication created by pharmaceutical companies, aren't able to use mainstream media for these messages. The messages and the programs are also regulated by DTC rules.

The success of the health channel shows that there's a wider range of opportunities for sponsorship, said Larry Gerbrandt, chief operating officer and senior analyst at Kagan World Media. "It's not all movies or television shows. The concept is moving into other and wider worlds," he said.

The concept of education explains why Scripps' cable properties, HGTV and Food Network among them, hesitate to allow sponsors to be integrated into programs and even brand shows with product names and companies. Scripps wrestled with the idea of product placement when it was getting started in the 1990s, and decided to leave them out of the content of the shows. Food Networks' "Unwrapped," for instance, features well-known brands and how they're made, but it doesn't seek sponsors or get paid for them.

"If you watch our networks, you'll see brands ... but we don't sell those opportunities," said Jon Steinlauf, senior vice president of ad sales for Scripps Networks. "We're not an entertainment channel. We're more of an educational channel."

Instead, Scripps works with interstitials, like "Food Bites" that combines a brand (like Doritos) with a quick recipe, driving viewers for more information toward its Web site. It's what Scripps calls "convergence," and the resulting Web hits tell network and advertiser how well the spots are doing. On HGTV's most popular show, "House Hunters," Century 21's interstitial drives viewers online. One of HGTV's most prolific advertisers, Lowe's, recently sponsored a service piece and marketing initiative with their brands and the National Trust for Historic Preservation.

Andy Marks, executive vice president of brand partnerships at Hypnotic, said the goal is to create brand context and not just brand integration. Think of the whole mix, he counseled.

Marks pointed to the success of Terry Tate for Reebok, which by the end of the week after the Super Bowl had led to an appearance on NBC's "Today" and the pitchman ringing the bell at the New York Stock Exchange. At Reebok's Terry Tate Web site, there were 18 million film views in the nine months since the Super Bowl and almost one million registered users for Reebok, compared to the 160,000 in the two years before the Super Bowl spot ran.

Kastner's network, HTS, is only beamed to hospitals so there isn't any Nielsen ratings. HTS conducts surveys to determine brand of recall, intent to purchase or, since so many of the products are prescription only, intent to talk to physician about them. But Kastner said that there's another way to test value, since the network is only available on a subscription basis to hospitals. If they continue to pay for the network, that tells something.

"That's probably the best ROI," Kastner said.