Hallmark's Solution: Cut Ad Clutter

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Hallmark Channel is slashing the advertising inventory in its original movies with the hope of reducing clutter and boosting ad revenue.

The network, which also last week announced the formation of a new sponsorship-solutions unit that will work on product placement deals with advertisers and cross-platform media buys, plans to reduce the spot load in some original movies from 12 minutes per hour to four.

Ads in telefilms with the reduced commercial loads would be sold to a single sponsor, with the deals costing media buyers at least $1 million per movie, said Hallmark executive vice president of national advertising sales Bill Abbott. Hallmark will test the strategy with a few original movies before committing to sole sponsorship deals for its entire original movie slate, Abbott added.

OWNERSHIP POSITION

"We think it's a win-win situation, certainly, for the client who can break through the clutter and take a real ownership position in a movie and associate themselves with the quality of our brand and the movie," Abbott said.

Hallmark will give title sponsorship of movies to the advertisers, who will also be able to place their products in the movies. Abbott cited Chrysler as an example, noting that a movie sponsored by the automobile manufacturer would be billed as a "Chrysler movie event" on Hallmark. Abbott said Hallmark is close to a "couple of deals" with advertisers to sponsor its original films.

Hallmark's new sponsorship-solutions unit, which is part of its national advertising sales department, is pitching the movie sponsorships to advertisers. Abbott said the unit is also working on product-placement deals with advertisers, in addition to cross-platform media buys that would allow advertisers to market products through the chain of 4,500 Hallmark Gold Crown stores owned by Hallmark Cards Inc., which in turn owns Hallmark Channel parent Crown Media Holdings Inc.

Increased advertising clutter on cable and broadcast programming, coupled with the threat new technologies such as ad-skipping digital video recorders pose to advertisers, contributed to the company's decision to form the sponsorship solutions unit, Abbott said.

COMPETITIVE EDGE

The network will work with sister company Hallmark Entertainment Inc., which, in conjunction with Alpine Medien Productions, produces all of the network's original movies, to integrate the product placements during development of the films. That gives Hallmark a competitive edge over other networks that purchase films from outside production companies.

Abbott said Hallmark has run some "subtle" product placements in original movies over the last 18 months, but he declined to name the advertisers that have done such integration deals. Hallmark will also look to add product-placement advertising to its original series, but "there's nothing really on the drawing board at this point in time," Abbott added.

Hallmark has done some cross-platform deals with advertisers in the past that included the Gold Crown stores, but Abbott said the company plans to place bigger emphasis on those broad agreements.

"I think we will ramp that up and take it to a new level," Abbott said. "We're not at the size of a Time Warner or Disney or Viacom, but we have assets that those companies don't have and one is certainly the 4,500 retail outlets and the Gold Crown mailer that goes out to 144 million Gold Crown Hallmark loyalists every quarter."

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