June 13, 2005
Is television advertising a dying concept? It's far too early to say, but today there was rumor and innuendo that Procter & Gamble (NYSE: PG ) -- a consumer products heavyweight and therefore a heavyweight in advertising as well -- is decreasing its spending on television ads. What's the world coming to?
According to an article in today's Wall Street Journal, which cites "people familiar with the situation," the consumer products giant plans to "sharply" curtail the amount it shells out on TV commercials. Given the popularity of TiVo (Nasdaq: TIVO ) and other DVR devices, it appears that many people would rather fast-forward through TV ads rather than sit and be encouraged not to squeeze the Charmin.
The creep toward product placement within television shows has been evident over the last couple years, as has the success of Internet advertising. Way back in late 2003, I wrote a piece about Procter & Gamble's product placement efforts on the wildly successful show Survivor, from Viacom's (NYSE: VIA ) CBS network. More recently, I noted Amazon's (Nasdaq: AMZN ) A9.com's mention on News Corp.'s (NYSE: NWS ) Fox's The O.C., a show with high youth appeal. I've also opined that masterful product placement can sometimes help investors spot the cultural icons that become consumer giants. On the flip side, heavy-handed product placement quickly turns into a turnoff. Longtime Fool Rick Munarriz recently examined the idea that product placement is a fine line here and here.
The coming years should be interesting indeed as advertisers try to strike that delicate balance between appealing to viewers -- who may be becoming increasingly jaded and more difficult to entertain or persuade -- and making them feel like they are constantly being fed a marketing pitch. Google's (Nasdaq: GOOG ) online ads are appealing in part because they're not only less intrusive than many forms of Web advertising but also geared toward users' specific queries, questions, and tastes.
The Journal article points out that Procter & Gamble is considered the kind of powerful company that sets a precedent. So keep an eye on the stocks you own that pay big bucks for advertising. Companies may need to get creative in order to squeeze the most effectiveness out of their marketing dollars. But the avenues through which they try to persuade may have a increasing amount of potholes.
Read more about product placement themes in this Foolish commentary:
Amazon.com and TiVo are bothMotley Fool Stock Advisorpicks. To find out more about the latest stocks favored by David and Tom Gardner, click here.
Alyce Lomax does not own shares of any of the companies mentioned.