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Macy’s, Johnson & Johnson Sign On as Major Sponsors of ABC’s ‘American Idol’ (EXCLUSIVE)

American Idol” will swap out Coca-Cola’s red cups for Macy’s red star in a new era of advertising associated with the show when it reboots on ABC.

Viewers who tune in to “American Idol” on March 11 are no doubt eager to see the contenders and celebrity judges Katy Perry, Lionel Richie, and Luke Bryan. They will also see prominent ad pitches from Macy’s and Zyrtec. The retailer and the Johnson & Johnson allergy medication will be woven into the content of the musical-competition program, according to two people familiar with the matter, playing roles similar to the ones filled by big advertisers like Coke,  Ford Motor and AT&T when “Idol” enjoyed a much-ballyhooed and top-rated run on Fox between 2002 and 2016.

The advertisers are believed to be paying whopping integration fees of between $1 million and $1.5 million for the broader affiliation with the show, according to one of these people. ABC declined to make executives available for comment. Spokepersons for Macy’s and Johnson & Johnson could not be reached for immediate comment.

ABC and its parent, Walt Disney Co., no doubt hope “American Idol” will prove as popular as it has in the past: Approximately 38 million people tuned in to see Ruben Studdard defeat Clay Aiken to win the show’s second season finale on Fox in 2003. With those big crowds came broad influence. “Idol” has been instrumental in shaping new forms of advertising and media use. Early in the program’s tenure on Fox, AT&T asked fans to vote by text message for their favorite contestants – helping to transform that behavior into a mainstream habit. Coca-Cola achieved a new level of product placement by getting red cups festooned with some of the logos of its popular carbonated beverages on the judges’ desk.

The unique advertising structure of the program was initially devised by Jean Rossi, a longtime Fox ad-sales executive who wanted to hook clients on “Idol” when the musical-competition concept was popular overseas, but unknown to U.S. sponsors. Fox sold season-long arcs that kept popular advertisers on board for multiple episodes, and was able to secure bigger support from those sponsors by keeping rival brands out of the program. When Fox launched a similar program, “The X-Factor,” in the fall of 2011, it sold shorter sponsorship tenures that allowed the network to bring more advertisers into the show over the course of a season.

ABC has also hoped to clear new frontiers. Rita Ferro, president of ad sales for Disney/ABC Television Group, told Variety last June that the network wanted to shake up the “Idol” ad model. “We are thinking about ‘Idol’ in a different way,” she said in an interview at the time. “It’s really being driven by social involvement and how we can continue the storylines from the show throughout the week.” ABC was telling advertisers to attach themselves to video related to “Idol” that could be distributed digitally on days when the linear show was not on the air.

Yet ABC has relied heavily on the show’s history in making its case to Madison Avenue. Ad executives from the network have pointed potential clients to the success of NBC’s “The Voice” and “America’s Got Talent,” said one of the people familiar with the matter — and reminded them that “Idol” was the show that sparked the rise of the entire genre of competition shows. They have also touted “Idol” as an opportunity to reach families watching the show together, this person said.

Ryan Seacrest’s return to the show as host was a critical factor for some advertisers, according to one of the people familiar with the situation – even more than which celebrities were selected to judge. Macy’s may have even more reason to favor the popular host and producer. The retailer sells his “Ryan Seacrest Distinction” clothing line.

ABC has clearly mined new categories to win support for the program, switching beverages, cars and technology for retailing and consumer products. Macy’s has struggled in recent years as consumers opt for online shopping. Under Richard Lennox, its chief marketing officer, the department-store chain has relied less on sales and discounts and big national commercials in favor of running ads in local markets. Johnson & Johnson has long been one of the nation’s biggest advertisers, working to sell products that range from Band-Aids to Neutrogena to Aveeno.

No matter who is advertising, the costs won’t be cheap. “American Idol” stood as one of the most expensive programs of the 2017-2018 season, according to Variety’s annual survey of primetime ad prices. During last year’s “upfront” sales season, ABC sought an average of $179,807 for a 30-second ad in the Sunday broadcast of the show and an average of $164,492 for a 30-second ad in Monday’s edition. But recently the network may have accepted anywhere from $100,000 to $150,000 for a spot, according to one of the people familiar with negotiations.

“Idol’s” link to big sponsors was unshakable while its ratings soared. As the series aged, however, AT&T and Coca-Cola backed off, and Ford tamped down its spending.  The show’s 2014 finale was seen by 10.1 million viewers, according to Nielsen,  a decrease of 27%  from the 14.3 million who watched it in 2013. AT&T hung up on the show prior to its run in 2014, and Coca-Cola announced it would take its red cups off the judges’ table in December of that year after an alliance that lasted 14 seasons.

No one thinks the program will achieve the heights it once enjoyed last decade. Advertisers recognize that TV viewing has changed, and that most popular TV series won’t notch the audiences they did even as recently as 2002. But buyers believe “Idol” will still fare well in the modern market, said one of the people familiar with sales around the show. They see it as “a very good show in today’s landscape.”

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