The World: Group M takes content provision to a new level

network. The deal sees Group M fund 50 per cent of the production in
return for a bank of ad slots on the channel.

While October Road is not a radical departure for Group M - MindShare
Worldwide, a Group M agency, fully financed and produced a summer drama
series called The Days for ABC two years ago - this latest deal has been
struck independently of Group M's clients. The Days, by contrast, saw
MindShare clients such as Sears Roebuck and Unilever carve up the show's
ad breaks between them.

In Group M's eyes, this separation between client and TV content, as
well as the absence of any product placement, sets its deal with
Touchstone apart from ear-lier advertiser-programme agreements. "Group M
is co-producing independently of clients a show to put on the air," Rino
Scanzoni, the chief operating officer at Group M North America, says.
"We get advertising time in all of ABC programmes, and we make that
available to our clients."

For Scanzoni, the advantages of this new model are clear. "It's a way
for us to have some input and interest in intellectual property," he
says. The networks, meanwhile, gain a high-budget programme for their
schedule. "If it works out, it benefits the network which might not
otherwise be able to fund the show," he says. "The networks realised
that they are in the business of finding hit shows, and the higher the
number of shows they put on the air, the more likely they are to have a
hit. They can use their advertising time to fund that."

The US is not the only broadcast market WPP has trained its sights on.
Sir Martin Sorrell, the chief executive, recently announced plans for
the group to make TV dramas worldwide, subject to regulatory approvals.
While WPP is clearly setting great store by advertiser-programme deals,
it is debatable if other major players will follow Group M's lead. "It's
not necessarily something other agencies will embrace," Scanzoni admits.
"Getting involved in general entertainment programming is a very risky
proposition."

Money is likely to be the biggest hurdle for most agencies in the UK.
"The cost of involvement is the major consideration," Chris Hayward, the
head of investment at ZenithOptimedia, says. "These are not small-scale
projects. While there is great potential, most people aren't well fixed
to have that money at their disposal. It's an arena in which the number
of potential players is relatively small. I don't see a mass movement
away from large spends on ads."

Richard Oliver, a managing partner of investment at Universal McCann,
agrees in the short term. "I don't think we will see an agency putting
forward the money," he says. "I don't see us making that move at this
point in time. The landscape isn't ready quite yet." Oliver is, however,
convinced that the industry will eventually team up with TV companies to
produce content.

"It's something everyone is increasingly considering," he says, pointing
to Universal's move into this market with the TV movie The Flight of the
Reindeer made with Coca-Cola and Johnson & Johnson for CBS in 2000.
"It's a new model coming through as the 30-second spot is expected to
diminish in efficacy over time. It's something we'll be seeing a lot
more of."

The model undoubtedly has attractions for an industry struggling with
the onslaught of personal video recorders, decreasing young TV audiences
and weak commercial programming. "There are basic pressures around PVRs
and people shuttling through the ads, so everybody will be looking at
it," Grant Duncan, the Publicis chief executive, says. "The issue is
creating content that can live outside the 30-second commercial. To make
sure the ads get seen, you can embed the message into a programme."

While agencies can see the value in embedding a message in a programme,
they are more cautious about placing products in a show, as MindShare
hopes to do in its future co-production deals. Product placement is
still banned in the UK, but this could change when European broadcasting
ministers discuss proposed revisions to the Television Without Frontiers
directive later this month. Regardless of any potential regulatory
change, audiences are still wary of in-show advertising. "It's a
difficult area," Oliver says. "British consumers are very media savvy
and would be quick to reject it."

Audiences may be quick to reject product placement, but advertising
agencies are certainly giving content production serious thought. For
Duncan, who says Publicis has no formal position on advertiser-programme
deals but is "very interested in pursuing it as an option", the
transition seems natural.

"Advertising agencies are good at working out simple brand
propositions," he says. "Once you have a clear starting point, that
doesn't just translate into ads, but could translate into whole series.
What we create is content and it comes down to trying to find
commercialised content."

As TV audiences continue to fragment and migrate to the internet and
mobile, traditional routes of TV distribution are not as powerful as
they once were. Channels are losing ground to content capable of playing
across multiple platforms. For media agencies willing to take a gamble
on content production, this shift could open the door to another revenue
stream.

"Distribution, which was the control element, will become secondary,"
Scanzoni says. "Content is going to drive the train."