Advertising's Twilight Zone: That Signpost Up Ahead May Be a Virtual Product
By SAM LUBELL

Viewers of last April 25's episode of the CBS show "Yes, Dear" may have noticed a box of Club Crackers sitting on a living room coffee table, next to a plate of cheese. What they did not know was that the box did not really exist, at least not on the set.

The Club Crackers box was inserted into the scene through virtual product placement, a process that uses computer graphics and digital editing to put products like potato chips, soda and shopping bags into television programs after the shows are filmed or taped.

As with traditional product placement, producers can sell screen time on their programs to advertisers eager to reach consumers who now have the ability to skip traditional commercials using digital recorders like TiVo. According to PQ Media, a media research firm, spending on product placement totaled $3.45 billion in 2004. Of that amount, $1.88 billion was spent on television, $1.25 billion on movies and $326 million on other media.

While digital product placement has been around at least since the 1990's, when it was introduced largely for greater flexibility in featuring various brands, it has gained traction on network television recently as advertisers increasingly look beyond the traditional 30-second spot to reach consumers.

And with the explosion of new formats like DVD, video-on-demand and online video in the last few years, digital placement gives advertisers and producers the option of cutting multiple deals with advertisers, placing one brand of soda in a first-run movie, selling placement for another brand in that movie's DVD release and a third in the portable video player version. Such customized uses, however, are not yet common.

The Club Crackers placement was created by Marathon Ventures, based in Wakarusa, Ind., near South Bend, which has become a major player in virtual product placement. In the last couple of years, the company, which has offices in Los Angeles and New York, has used its technology, called digital brand integration, on several CBS shows, and it is developing versions for NBC Universal and Warner Brothers for both network and syndicated shows.

"Anything you can package, we can do," said David Brenner, the president of Marathon. "We could do pharmaceuticals, shampoos, takeout foods, bags from Target."

Deals to introduce new product placement into reruns or DVD releases exclusively have been slow to materialize, Mr. Brenner said. But Dana McClintock, a spokesman for CBS, notes that because the use of the technology is still relatively new, "there is no hard and fast rule" on what format is most desirable for virtual products.

Mr. McClintock said that so far most advertisers had chosen to run their virtual products on all platforms, but acknowledged that "as time goes on, there are more complicated deals being cut."

Producers appreciate that the insertion does not affect the work of the show. For instance, it does not need to be accounted for on the set or written into the script. In addition, shots of a product, unlike real brand insertion, cannot be cut out by late editing changes. Many of Marathon's digital placements can be done in a single day.

"We can bypass all the production nonsense," said Elizabeth Herbst-Brady, a vice president of a media buying agency, Starcom USA, which works closely with Marathon to get products on television. Ms. Herbst-Brady said that her company had moved away from real placement of products in recent years specifically because of these production issues.

In December, Marathon signed a deal with Fox to place products on selected prime-time shows. Marathon not only inserted the Club Cracker box into episodes of "Yes, Dear," but also inserted Cheez-Its, a can of Star-Kist tuna and Nutri-Grain bars into the show.

Marathon also placed a nonexistent Cheez-It package into episodes of "Listen Up," now canceled. The company also developed a series of Chevrolet Impala logos for a weeklong CBS contest that asked viewers to spot them on various shows, including "How I Met Your Mother," "NCIS," "Yes, Dear," "C.S.I." and "Threshold."

For competitive reasons, Mr. Brenner declines to go into detail about how his technology team, working in a digital studio in Los Angeles, creates the effects. But Eugene Dwyer, chief technology officer at Princeton Video Image, in Lawrenceville, N.J., the company widely credited with pioneering digital product placement, notes that creating virtual products, which are usually two-dimensional digital images supplied by advertisers, is not technically difficult. (Occasionally the company must create 3-D images, so that the camera can move around a product.)

Marathon's images look quite real, although they sometimes seem artificially bright if one looks at them closely. The results are much more effective if one is not aware in advance that an item has been inserted.

"It has to be contextually logical," said Mr. Brenner. "We wouldn't put a Coke can on the bathroom sink."

Jake Brenner, director of integrated marketing at Marathon, and also Mr. Brenner's son, added: "We like to say it becomes part of the landscape of life."

The harder task is first finding realistic places to fit the images among a show's many cuts and variations. Princeton Video Image uses software developed at the David Sarnoff Research Center in Princeton, N.J., to identify locations and track them in a scene.

Marathon has filed for a patent on a system for postproduction placement of products in video programming. The software, among other features, marks potential virtual advertising placement spots with orange dots and provides a detailed description of the shot, its context and its duration.

The other difficult part, said Mr. Dwyer, is assuring that the product adjusts to the minute changes in most scenes, like small camera movements and changes in light. Without computer-aided adjustments, the image would inevitably bounce around unnaturally and suddenly appear to lose or gain brightness.

Digital manipulation of live television is not new. Networks like Fox have long inserted digital advertisements (but not products) into sports broadcasts - for example, placing company logos on the backstop behind home plate in baseball games.

Princeton Video Image, which claims to have invented the first-down stripes for football telecasts, has placed virtual logos in broadcasts of soccer, golf, football, poker and baseball games, including this year's World Series. The company also made a brief foray into digital insertion during a newscast, replacing NBC's logo with CBS's during CBS's broadcast of the Millennium New Year's celebration, drawing an outcry from critics. "No one wants to do that anymore," said Samuel McCleery, a company vice president.

While it is common knowledge that hundreds of TV shows and movies receive fees from advertisers to include their products in scenes, the people behind digital product placement seem concerned that consumers could rebel if the placements became too awkward or intrusive. Will Donald Trump have 30 cans of Pringles in front of him on "The Apprentice"? Will Coke cans sit on the operating table during reruns of "Scrubs"? "We're careful not to saturate people," said Mr. Brenner, who started his company in 2001. But Ms. Herbst-Brady, who said that networks and advertisers were extremely sensitive to the risks of bombarding their viewers with too many ads, made no distinction between traditional placement and the virtual kind.

"It's no different than if the cereal box was there," said Ms. Herbst-Brady. "It's all television. Don't get me started getting into the realm of what's real and what's not real in Hollywood. Don't get me started."