Media: Sneaking in through the back door

Advertiser-supplied programming is becoming more popular, as programme budgets fall.

CLASSIC FM has a cute new strand going out on Thursday evenings as part of its Newsnight programme. It's called Things to Come and it features interviews with big names in business, science, technology, medicine and the arts talking about the future.

Nothing strange about that, except that the programme is entirely paid for by the insurance company Equitable Life - it's an advertiser-supplied programme.

It's appropriate that the programme is about the future because this kind of programming... well, let's just say you're going to see a whole lot more of it.

Already Channel 5 and Mentorn are understood to be looking for advertiser money to boost the budget on the Sunday afternoon entertainment programme Exclusive! Things to Come itself ran on Channel 4 as a 15-part TV series in January this year. Most of the satellite channels are carrying at least one programme made with money directly from an advertiser.

"I think that, if not an explosion, we are going to see more and more of this sort of thing as broadcasters struggle with falling budgets and increased air time and advertisers find their audience fragmenting on digital television," says Tess Alps, executive chair of Drum PHD, the media-buying agency that put together the Things to Come deal and worked with Channel 4 and Waterstone's on 1997's Books of the Century programme.

It's not surprising. Given that ITV2, the much-trumpeted digital sister channel to ITV, will launch with a programme budget of pounds 42m - less than half of Channel 5's annual programme spend - you can see the broadcasters' need for programming money. So why should the advertisers comply?

For a couple of reasons. Advertisers love sneaking in through the back door so that you don't instantly file their communication in the mental wastepaper basket, as you do with direct mail.

The sneakiest way is through advertiser-supplied programming, where the advertiser makes a show. Such programming is old news in the United States. After all, soap operas were called soap operas because they were made by soap companies in the 1920s. Soap companies are still the biggest investors. The rights to ITV's Wheel of Fortune are owned by Unilever, while Channel 4's Northern Exposure is made by Procter and Gamble.

So concerned are some powerful advertisers by the declining programme budgets of cash-strapped broadcasters, that they also see this kind of programming as a safeguard against declining standards, believe it or not.

In 1994, P&G's chairman and chief executive, Edwin Artz - the nearest thing to a god in advertising - said that the only way forward for TV advertisers was to increase their involvement in programming, ironically to ensure its high quality. P&G promptly signed a $150m deal with Paramount Studios for programme development.

In the UK in 1995, the Daily Express helped fund ITV's Saturday evening game show, Raise the Roof, and Pepsi Cola coughed up for Channel 4's late- night Friday youth show, Passengers.

In both cases, the funding advertiser then did a separate deal with the broadcaster to sponsor the programme. Now, however, things are more out in the open. Channel 5's Pepsi Chart Show is paid for by Pepsi and made by the production company Broadcast Innovations. Robert Dodds, Broadcast Innovations' managing director, is the man behind that show as well as Pepsi's first foray with Passengers. In one sense, that is. In another, he's jointly behind it with Malcolm Gerrie, famed as the producer of The Tube and The White Room. "

In 1996, we sat down with Pepsi and persuaded them to work on building the Pepsi Chart into a property that could be used throughout its communications, whether as corporate entertainment, on bottle or in-store promotions, a straightforward TV sponsorship or any other possible option," he says. "We're now two-thirds of the way there. It only really works in an international capacity because Pepsi pays pounds 40,000 per week for the programme. In return, it owns the world-wide rights to the show and licenses Channel 5 to use it in the UK. Without the international dimension, it would be a very expensive deal."

This sort of programming is fraught with problems, as readers who recollect Heineken's Hotel Babylon will know. A Heineken brand manager issued a memo asking for the audience to contain more white faces, creating red faces at the beer company and the producers, Planet 24, alike. Dodds says the industry has been on a learning-curve and reckons that he can avoid such embarrassments in the future.

"There's going to be a lot of people putting out cookery shows on the Carlton Cookery Network in the next few years who are going to be wasting their money," he argues. "These deals have to work for the broadcaster, the advertiser and the audience, or we're all wasting our time.

"The advertiser needs the full sub-brand of the programme; the broadcaster - especially the big terrestrial broadcasters with the big budgets - needs something more than a free programme, and the audience needs something that's worth watching. If you get all that right, you're in business."