Product Placement on the News Causing a Brewhaha

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In the battle to find more income sources, local newsrooms are turning to product placement.

Kansas City’s CBS-affiliate station KCTV is experimenting with a deal in which local eatery Steak n’ Shake has paid to place a coffee cup, its logo visible to the camera, on the table during news segments. The placement, which occurs only on the weekend,l appears to tie into a Steak n’ Shake-sponsored contest on the KCTV website.

The KCTV deal recalls MSNBC brewhaha over Starbucks’ sponsorship of Joe Scarborough’s Morning Joe show, and the 2008 story of Las Vegas KVVU FOX 5’s deal with McDonald’s.[more]

While some are upset with this meeting of commerce and journalism, is it really that offensive? A look at the new ITV-Nescafe deal in the U.K. reveals that the offensiveness may not be with the ethics, but the business itself.

Local media analyst Bottom Line Communications gets the scoop on Steak n’ Shake, telling us in a later statement that the station is fairly defensive about the deal. More importantly, as Bottom Line’s John Landsberg tells us, “Honestly, it is the goofiest product placement I have ever seen. It is one coffee cup sitting all alone on an interview desk, and there only during the weekend news segments.  Steak ‘n Shake has virtually no presence in this market which further confuses the issue.”

The lesson in the Steak n’ Shake experiment for other local news organizations considering similar deals is go big or go home. That is to say, if a news organization is going to invite suspicion about breaking down the wall between journalism and commerce, it might as well do so in a way that is worthwhile. KCTV has the worst of both words; an almost meaningless and mostly worthless placement and criticism for taking money for product placement.

Meanwhile, in the U.K., where the doors allowing product placement were just swung wide open, a morning news show has already heartily embraced the practice to the tune of £100,000. The placement of Dolce Gusto coffee machine on the ITV network’s This Morning show is part of a three month deal with Nescafe and launched on the first day it was allowed under the new broadcast rules, and marks the first product placement deal under the new commercial broadcast rules in the UK. The unit did nothing more than sit in the background (at top).

As questionable as the KCTV-Steak n’ Shake deal, the Dolce Gusto placement in the UK leaves one wondering if anyone knows anything about the values of such placements. If the reported terms of the deal are correct, ITV is collecting approximately £1,100 per show from Nescafe for featuring a product that an audience member would be challenged to even identify.

Without any kind of an agreed upon metric for valuing such product placement, the practice is a wild west of anything goes (anything you can get away with, get away with). Brands will look to pressure newsrooms into long-term damaging and self-defeating levels of advertorial while broadcasters will look to rob brands blind, taking fortunes for little in return.

The ultimate result will be a worsening reputation of the the product placement industry.

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