TV ads aren't much use if viewers fast forward through them. Embed could be the answer for advertisers.
NEW YORK (FORTUNE) - American TV is already packed with product placements.
But NextMedium hopes to change they way these deals are brokered when it launches its online marketplace for "brand integration," the 21st century version of product placement, on May 15.
Brand integration means that products are stitched into shows' story lines. So instead of just seeing a can of soda in the background of a TV show, a character is actually drinking it or even talking about it.
Integration has become increasingly popular as digital video recorders like TiVo (Research) and its ilk have gained ground. According to Forrester Research, DVRs are already present in 10 million viewing households; by 2010, they'll be in 39 percent of homes.
And data shows that 80 to 90 percent of those audiences skip commercials altogether. That's bad news for big companies paying hundreds of thousands of dollars for 30-second spots.
But integration hasn't been easy -- the deals are difficult to broker, and their impact is even harder to measure. That's where NextMedium, founded by Hamet Watt five years ago, comes in.
Using Embed, buyers and sellers -- that is, brands and the entertainment companies that want to integrate them -- can find each other with relative ease, speeding up transactions that otherwise might take weeks.
Networks, as well as film studios, video game-makers and music labels, post the spots they have available for brand-integration, like a car for a prime time chase scene or sneakers for a sitcom lead.
Buyers can search for opportunities using parameters that range from show ratings and demographics to scene and character descriptions, making offers via auction or by paying a flat fee. (NextMedium makes its money through subscription and transaction fees.)
And through a partnership with Nielsen Media Research, buyers and sellers can also access a database -- called Place*Views – to track the performance of the integrations, from how long they lasted to who actually saw them.
In the past, instead of paying for airtime, brands would just cozy up to stylists and set directors for prime placements. In a report last year, PQ Media estimated that unpaid placements accounted for more than two-thirds of the roughly $3.5 billion total product placement market.
Watt, 34, thinks the percentage of paid placements may be even lower for television alone. He estimates that unpaid placements represent an opportunity worth anywhere from half a billion to a billion dollars in potential revenue.
"I call this t-commerce, television commerce," says Gary Arlen, president of Arlen Communications and an industry expert. "Selling through television takes a whole lot of different approaches, and like every commerce, you need some way to measure and value it."
What makes NextMedium unique is its Nielsen partnership. Embed uses Nielsen's Place*Views and other data to generate a score it calls a brand's "entertainment IQ." Every time an anxious marketing exec logs on, that number, along with a nifty market-share pie chart and a clip of his brand's most recent integration, greets him.