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Brand recognition

Entity to evaluate value of product placement

Madison Avenue may finally have found a way to estimate what a brand’s appearance in a Hollywood film or television show is worth.

Brand Advisors, a new entity formed in part by independent finance vet Roy Salter, is offering the entertainment and advertising industries a pricing model that uses proprietary algorithms to compare product placement with 30-second commercials.

“This is a very disorganized business,” Jerilyn Kessel, a principal and co-founder of Brand Advisors, told Daily Variety. “There’s no rhyme or reason. There’s no way to evaluate how well the investment by the advertiser performed or will perform.”

Company’s formation comes as the ad biz is beginning to beef up its presence in Hollywood by putting more of its products into films and TV shows and backing them with multimillion-dollar campaigns.

Serious money

This summer alone, Mazda spent $8 million to promote its presence in Fox’s “X2: X-Men United,” and Mitsubishi paid $25 million to push Universal’s “2 Fast 2 Furious.”

Meanwhile, Miramax Films recently announced that it is looking for a car partner for its upcoming superhero actioner “The Green Hornet” to back the pic with an estimated $35 million in marketing support. Ford backed MGM’s most recent James Bond adventure, “Die Another Day,” with a $35 million promotional effort.

“Advertisers are looking to justify their expenditures,” Kessel said. “Advertisers and Hollywood have traditionally priced brand integration deals with little financial basis. We’re trying to make it more comfortable for advertisers to commit dollars to Hollywood. We want to make it easy for an advertiser to integrate their products into entertainment. But the first step is to come up with a standardized metrix that somebody can use.”

Steps in early

Brand Advisors comes in during the initial phase of a script’s development and forecasts the financial performance of the project, as well as the size of the audience the pic may attract throughout its life cycle — from theatrical bow to homevideo, pay-per-view and television.

Should an advertiser broker a promotional pact with the production, Brand Advisors then analyzes the value of any product placement, weighing such factors as how the product appears in the project, how it’s used and whether it could potentially disappear amid a clutter of other brands.

Final numbers aren’t based on the type of brand but how it appears in a project, as well as the type of deal brokered between the advertiser and the content creators.

It’s all relative

For example, the value of a simple product placement deal under which a car appears briefly in a film won’t be as high as if that car is driven by the film’s lead characters and the automaker sponsors the film with an extensive marketing campaign that lasts through its DVD release.

Company applies a measurement, similar to the ad biz’s CPM (cost per thousand) rate, to determine a comparative advertising cost.

A compiled report can then help the advertiser and producer evaluate and modify their arrangement during the production’s development.

It can also be used to reforecast and reprice once the project hits theater or TV screens, helping the partners alter their arrangement based on actual results as it moves into other distribution windows.

Brand Advisors will not disclose which projects it’s initially working on but said that the reaction it has been getting from advertisers and entertainment producers has been positive.

Searching for structure

“Advertisers and the entertainment industry have been looking for a basis to conduct themselves in a more disciplined and structured fashion,” Salter said.

Brand Advisors was formed in February, as a subsid to the Salter Group, by execs from the advertising, entertainment and financial worlds, including Salter, Kessel, Scott Flacks, Richard Gold, Ave Butensky, Eric Briggs and Patrick Russo.

Salter founded financial and strategic consultancy the Salter Group in March upon ankling Los Angeles investment firm Houlihan, Lokey Howard & Zukin after 12 years.

Over the years, Salter has become known for forecasting the performance of entertainment properties for investors. He’s looking to offer the same service for the ad biz.

“The hope is that by applying our well proven techniques both groups –advertisers and producers — will become more active with one another,” he said.

Kessel co-founded entertainment and media research firm Centris and video measurement system Video Flash at Alexander & Associates.

Flacks is an executive at TVN Entertainment, a developer of video-on-demand and pay-per-view services.

Gold founded and is managing principal of BrandTrax, an electronic media airplay monitoring system formed with Lucent. He was previously a consultant to Western Intl. Media.

And Butensky was previously the prexy of the Television Bureau of Advertising.

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