Executive Summary MMI Product Placement (MMI), Inc. has an opportunity to represent Greyhound Canada as they look for cost effective ways to reposition their brand which they feel has become stale and are currently. Phil Hart, President of MMI, feels they are close to making a deal with Greyhound, but needs to alleviate Greyhound’s anxiety about product placement reaching the target market. Greyhound is considering the use of product placement and has approached MMI Product Placement, Inc. or a proposal. Paul Dillon, Marketing Director for Greyhound, has concerns about measuring the effectiveness of product placement and needs reassurance that product placement will give Greyhound added exposure to the target market, which are the young professionals, aged 18 to 44. An analysis of potential options was done. In the end, MMI looked at three options, one of which would be Greyhound continuing with its tradition advertising campaign, which would not be to MMI benefit at the present time.
The other two alternatives looked at having product placement in either a proven show such as Corner Gas or in reality show that is being revived by Global TV, Making the Cut. Both shows would attract Greyhounds target market, however given the fact that “Making the Cut” had so many unknown variables such as viewership and if the series would continue, it was decided to go with Corner Gas which is a well-established Canadian series with a loyal following. Philip Hart will present a proposal to Mr. Dillon outlining the placement value of using product placement in a very successful Canadian series.
Problem Statement Philip Hart, President of MMI Product Placements Inc. (MMI) needs to assure Paul Dillon Marketing Director for Greyhound the effectiveness of product placement. Phil has been asked to prepare a presentation in which he needs to make a convincing argument that product placement is the right promotional vehicle for Greyhound’s needs. Situation Analysis Objectives MMI must successfully convince Greyhound product placement (PP) can be advantageous. They must address Greyhound’s concerns about measuring the value of their placement.
MMI’s company mandate is to select the best product placement for its clients, negotiate placement contract and offer value by providing exposure at an extremely attractive cost. Greyhound’s brand is well recognized among Canadians, but its 75 year old brand has become stale and requires repositioning. A new marketing team has been brought in to create a new marketing strategy in order to build awareness that Greyhound is affordable and to remind consumers the next time they travel, Greyhound is a viable, convenient and safe option.
One of Greyhound’s priorities is to wire all buses for internet access to meet customer needs. Background and forecast MMI was established in 1985 and has been a pioneer in PP in Canada. Since inception, it has placed over 2000 products in feature films and TV episodes. MMI’s strategy is to select the best placement opportunities for clients, negotiate contracts, and to offer value by providing exposure at a low cost per thousand viewers (CPM). The PP process is sequential.
MMI receives scripts, reads them with an eye of locating potential PP opportunities, notifies client of details, negotiate with production team, and offer support. MMI tracks and monitors PP and prepares inventory of scenes to client’s marketing team. Greyhound, Canada’s largest provider of bus transportation is MMI’s prospective client. Greyhound is well known for medium and long distance commutes but also offers daily work commuting services. Greyhound is in the middle of a re-organization and has a new marketing team to revive the 75 year of brand positioning. SWOT Strengths| Weaknesses| Pioneer in Canada, established 1985 * Over 2000 PP in films and TV shows * Great relationship with Canadian entertainment industry * Produces inventory of scenes for clients * Proprietary software to access impact of PP for client (PQS) * Operates on a retainer basis * Leveraged licensing fee * Ensures positive PP * Get products where customers live and play without being invasive * Subtle – do not look like a sales pitch * MMI reviews numerous scripts| * Difficulty in providing clients accurate results of PP * Operates on a retainer basis * Only offers PP, therefore limited clients * MMI’s use of People Meter, however data is not definitive * PQS is only as accurate as inputs used * No generally accepted performance measures * Measuring size of audience time consuming and costly| Opportunities| Threats| * PP has had strong growth since mid 1980’s * PP growth in TV * $2. 1US spent globally on PP * By 2010 PP will be present in 75% of shows * Consumer awareness increased by characters endorsing product * PP still relatively small portion of TV ad spending, room for growth * Brand marketers will pay premium for the right PP * Digital brand integration – regions specific PP| * Competition of full-service ad agencies * Large ad agencies offering PP – acquiring smaller PP agencies * Automation and standardization – scripts being uploaded for bidding * Risk of poor PPs * TV Networks becoming proactive in combining PP with traditional adsExtrapolating audience findings over larger pool can result in faulty conclusions| Market Analysis Product placement was embedded into popular entertainment products in order to encourage their consumption in a combined effort between advertisers and entertainment production companies. PP has been around since the early 20th century.
Silent films incorporated PP as early as 1919 (MirriAD. January 17, 2012). The PP market in Canada consists of smaller “mom and pop” operations such as MMI whose founders have had experience in the entertainment industry. Some larger advertising agencies are now creating their own PP divisions either from organic growth or from acquisitions of smaller speciality firms. The market for PP is expected to grow into the future. In 2005, there was a total of US$2. 21 billion spent globally with an additional US$3. 78 billion of cash-equivalents and in-kind deals. A bit closer to home, the US spent US$1. 42 billion of which US$941 was spent on television.
It is forecasted that PP would be present in 75% of prime time TV in 2010. A new release of a James Bond movie reported that one-third of the funding for the movie ($45 million) came from PP deals (Wyeth, Wyndham. May 2011). Product Placement market is relatively small compared to the $50 billion spent of television advertising in North America. Greyhound’s market is the transportation industry. There are several ways for customers to get from place to place including air, automobile, train and bus. Travel by bus is less expensive and has service to more locations. Greyhound connects large cities to smaller centers including remote parts of the country.
The only other way for customers to get to these remote places is to use a car or a bus. Segment Analysis | Professionals| Single families| Seniors| Who| * M / F * Age 18 – 45| * All age groups| * M / F * Age 65 plus| What| * Convenience * Amenities – internet, extra space, comfort| * Convenience * Personal reasons| * Low cost * Safety * Destinations| Where| * Downtown stops * Park and ride space availability at depot| * Anyplace they have to go * Close to home| * Convenient * Close to home and final destination| When| * All year during week days| * Any time| * Any time| Why| * Commute to ork – can work while commuting no down time * Savings on downtown parking| * Convenience * Economical * No other means of transport| * Feels safer than driving * Maybe unable to drive * Economical| Trends| * Parking is becoming an issue in urban centres * Greener attitude| * Greater number r of people deciding not to own vehicles| * Many seniors travel to warmer climates during winter season * Affordable| DeterminingDimensions| * Bus schedules – do they run when & where required * Do they offer amenities| * Convenience * Economical| * Cost factor * Do they go on routes desired * Feeling safe| Target segment Greyhound has specifically indicated their desire to grow the Young Professionals group. They hope that by getting the target market using the service during their university and early professional careers, they would continue to use the service in the future for their commuting needs. For MMI, the Brand-ers offer the greatest opportunity as they are vested in continuing to create awareness and to remind customers of their product. They will also have larger marketing budgets and the potential for long-term relationship. Competition Analysis There are basically two types of PP agencies servicing the market.
The first are mom and pop organizations such as MMI and the other are full service ad agencies who have added PP divisions as a means of offering one-stop shopping to its clients. MMI feels its business is based on relationships and clients benefit from their experience. To ensure clients’ brands get the best product position, MMI reads many scripts looking for the right opportunity for its clients; however brand managers and conventional ad agencies don’t have the personnel to do this. The business of PP is changing; it is no longer the domain of TV producers. TV networks are more proactive in combining PP with ad buying. Clients are willing to pay a premium for PP for the right opportunity.
Automation and standardization is impacting the business. Movie studios and TV networks are starting to skip the middle man or ad agency and upload specific PP request/scripts, allowing companies to evaluate and bid. Products can now be added to a scene using digital brand integration. This new technology allows producers and networks to alter PP at any time for a specific target market or region. As technology continues to grow, digital branding will impact PP. “Advertisers have spontaneity which they never had before and the rise of digital product placement is changing the landscape of advertising faster than ever” (MirrAD. October 18, 2012).
Greyhound has 40 percent of the market share and is the largest provider of intercity bus transportation in Canada. This means there are other services providing the other 60 percent of the market. Greyhounds will have to continue to differentiate themselves in order to keep in front of the competition. Financial Analysis A financial analysis was performed on cost per viewer for PP and traditional ads. Serious consideration was being given to PP opportunity on “Making the Cut”, a new series being aired on Global TV. An analysis of the placement value has been done at the three placement rating options available. Cost per viewer was performed based on viewership numbers when CBC aired the show in 2004.
From a total cost per viewer standpoint, Les Bougons or Canadian Idol would be the lowest cost with the greatest viewership and “Making the Cut” would have the highest cost per viewer. It was felt that the two lower costing shows did not capture the target market Greyhound wanted. Corner Gas, at a cost of $9 per 1000 viewers is the next options, and will be recommended to Greyhound as the most appropriate program to place their product. Case Keys Key Success Factors * MMI must determine the correct communication channel for Greyhound’s promotion * MMI needs to accurately measure viewership * Ensuring any PP reaches the target audience Uncertainties Number of viewers for the new show, Making the Cut * Will Greyhound go with the new marketing strategy, PP, or stick with traditional advertising * The demographics that will make up the viewership of Making the Cut Analysis of Alternative solutions Alternative 1 – Using PP in a returning TV series Making the Cut: Last Man Standing Making the Cut has some excellent PP opportunities for Greyhound. However given Greyhound’s desire to measure results, this may be a difficult sell. CBC originally ran this show in 2004. Global is planning additional episodes to be aired in 2006 so there is uncertainty in the viewership of the program. Pros| Cons| Greyhound bus will be featured prominently for 45 seconds per placement 3 times per episode * 21 episodes scheduled * Target market are heavy viewers of entertainment channels * New show’s hockey theme is popular among target group * Interior and exterior of bus will be shown| * Viewership numbers and demographics unknown * New show on network – possibility of being cut if ratings not achieved * Greyhound would like something that is measurable * Branded exterior will only be visible for a third of the placement footage| Alternative 2 – Using PP in a proven TV series – Corner Gas Corner Gas is a long running Canadian show, with a proven viewership. Whether the best PP opportunities are available is unknown until Phil does further research. Pros| Cons| Numbers available on viewership and demographics * Both are long standing Canadian shows – on air for a number of seasons * Corner Gas viewership increasing in adult 18-49 age range (Bell Media, 2004) * 1. 5 million viewers in season 2 debut| * Cost per 1000 viewers is $18. 26 * May not have optimal PP opportunities| Alternative 3 – Greyhound continuing with its current advertising agency Traditional advertising is what Greyhound knows and aligns with the new Greyhound marketing team’s 360 degree marketing plan. MMI does not do traditional advertising. Pros| Cons| * Greyhound currently has a long-standing relationship with its current ad agency * Aligns with Greyhounds 360 degree plan * Results are more measurable for Greyhound| * MMI will not get this client right now| Recommendations
It will be recommendation that Phil present to Greyhound the option of having product placement on future episodes of Corner Gas. Greyhound is concerned with measuring the effectiveness of product placement; therefore they may be more receptive of a proven show such as Corner Gas if the number of viewers and the demographics of viewers are available. If Making the Cut is pitched, Greyhound may feel they have too many unknown variables that cannot be measured. As can be seen from the analysis (Exhibit 3), it should be emphasized that the placement value of having product placement in Corner Gas would be the equivalent to one and one-half 30 second traditional ads (21000/14000 = 1. ), at 75 percent of ad-spot cost per 1000 viewers. Action Plan To prepare for the final pitch to Greyhound, Phil will need to complete the steps that follow to ensure Greyhound has all information needed to make an informed decision. 1. Prepare the final proposal for Greyhound and include the following: a. Financial analysis of different options b. List advantages to Greyhound for using PP c. Requested demographics from AC Nielsen and the Bureau of Broadcast Measurement (BBM) to ensure the most update demographics are available d. Ensure Greyhound is aware that these two companies provide standardized information that is used as industry norms e.
Provide Greyhound with scripts where PP will occur f. Possibly provide testimonials from other clients, who may have been sceptical about PP in TV shows 2. Ensure proposal is professionally presented and Phil and other member are fully prepared for any questions that arise during the presentation. 3. Negotiate a contract with producers of Corner Gas. 4. Supply Greyhound with release date of shows where Greyhounds will have PP. 5. Tract and monitor PP. 6. Inventory scenes for Greyhound for marketing team. 7. Following airing of show, follow up with Greyhound on their satisfaction with PP and identify and future product placement opportunities.
Contingency Greyhound executive is struggling with the fact that so many variables of PP are not measurable. Given this, Phil should be prepared that Greyhound may turn down this proposal. Phil should be prepared to pitch PP in Making the Cut in addition to PP in Corner Gas. Perhaps the opportunity for PP in both shows may be more a more appealing option for Paul and Greyhound. References Bell Media. Record Audience in the Tank as Corner Gas Season 2 Debuts; Wins Nights in Canada. October 6, 2004. http://www. bellmediapr. ca/ctv/releases/release. asp? id=5749&num=3&yyyy=2004 (Accessed November 2, 2012) MirrAD digital product placement.
The Marriad Blog. Is the growth of digital product placement set to continue. October 8, 2012 http://www. mirriad. com/2012/10/is-the-growth-of-digital-product-placement-set-to-continue/ (Accessed November 2, 2012) MirrAD digital product placement. The Marriad Blog. Product Placement in Movies: A Brief History. January 17, 2012. http://www. mirriad. com/2012/01/product-placement-in-movies-a-brief-history/ (Accessed November 2, 2012) Paste. Wyeth, Wyndham. New James Bond Film to Set Placement record. May 4, 2011. http://www. pastemagazine. com/articles/2011/05/the-new-james-bond-film-will-feature-record-amount. html (Accessed November 2, 2012)