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A Web-based approach to product placement

October 20, 2008 |  6:01 am

Jon_healey_logo Greg Neichin and Adam Erlebacher were in an East Coast grad school looking for ways to help advertisers and their agencies make the transition to the Internet when they stumbled upon an idea: what about creating an online market for placing products in movies and TV shows? Say, an EBay-type auction site, where brands and agencies bid for the chance to have their cars, cellphones and power tools in the center of the frame?

But they soon discovered that one cliche about Hollywood -- "it's all about relationships" -- is grounded in truth, at least where product placement is concerned. "It's a face-to-face business," Erlebacher said. Added Neichin, "It is a creative dialogue about finding the right mix and the right balance." Although online auctions might be an appealing approach in theory, they concluded that the market wouldn't support it today.

Placevine_logo Instead, the pair's discussions with advertisers, agencies and studios steered them toward a different opportunity. Their company, PlaceVine, is officially launching today an online clearinghouse for product-placement and sponsorship opportunities in film, new media and TV. PlaceVine's Brand Integration Service invites content companies to post descriptions of their product-placement and sponsorship needs, free of charge. Brands and agencies can list their offerings for free too, or they can pay for a premium version that alerts them to new opportunities and lets them pitch content providers electronically through PlaceVine.

Actual deals will have to be completed offline. But to PlaceVine, helping people discover potential deals is more interesting than the transactions themselves. Neichin and Erlebacher are trying to fill the information gap that sidelines smaller players on both sides. Independent filmmakers don't have an easy way to attract brands to their projects, and smaller advertisers may have no idea how to get their products into the hands of film and TV producers. In that sense, PlaceVine's new service is yet another example of the Web's power to democratize and open markets that have been cloistered by the scarcity of crucial information. All the same, Neichin insists, "We're not trying to be disruptive." PlaceVine sees itself as an add-on to the current system, not a replacement.

The company has a bit of a chicken-and-egg problem: Its value to brands and ad agencies depends on how many content providers use it, but content providers won't be interested unless there's a goodly number of brands and agencies in the fold. So far, PlaceVine has attracted more than 150 ontent creators and more than 100 brands to its new service. One thing in its favor is that it's picked a good time to launch. The proliferation of ad-skipping digital video recorders, the fragmentation of audiences and the rise in production costs have all heightened interest in product placement and brand integration, which plays a particularly important role in financing productions for the Internet. Those factors combined to generate more than $22 billion in brand-integration deals last year.

-- Jon Healey

Healey writes editorials for The Times' Opinion Manufacturing Division.