Jim Dudukovich
When Coca-Cola struck up its sponsorship deal in 2002 with a new show, American Idol, the terms were complex. Add ons to the media buy included product and brand integration — red Coke-branded cups in front of the judges and a backstage red leather couch decorated with the brand’s dynamic white stripe. Coke also won the right to use of the show’s marks at retail, in sweepstakes and other promotions — a stipulation that had huge benefits as the show became a cultural phenom.
Coca-Cola North America’s marketing counsel Jim Dudukovich helped shepherd the American Idol deal, as well as dozens of other integrated campaigns for the company. A featured speaker at the 2006 Promotion Marketing Law Conference, to be held next month in Chicago, Dudukovich spoke recently with PROMO Managing Editor Patricia Odell about pop culture, the power of integrated marketing and the challenge of protecting brand equity while at the same time leveraging the vast reach of TV programing. He also shares a few pointers for brands about value-added deals, exclusivity and social networking.
Q: What are the pressing legal issues for promotion marketers?
A: Where we’re likely to see the most battles, and likely to clear the most ground, is in the whole idea of integrated marketing where brands and marketers are integrating themselves into various types of programming and pop culture and events. We’ve come a long way from your standard insertion order or media buy. The system was not ready for those sticky legal perspectives on how to structure and secure the appropriate rights for these value-added deals, which have really exploded. So we’re doing some catching up.
Q: How often are marketers hurt by not striking a solid deal?
A: I don’t think it’s all that uncommon for marketers to get themselves pretty far into a deal, just because of the speed of business and the speed at which opportunities present themselves, only to realize that there are certain things that they thought went along with the deal, but were not controlled by the party they were making the deal with. The penalty is disappointment on the part of the marketers. It may just be a miscommunication or missed expectations.
Q: How can marketers best protect themselves in value-added deals?
A: When, say, a sweepstakes and a product placement gets added on to a media buy you’ve got to work out what third parties have control over those rights and can the media company deliver on the add-ons. There’s no such thing as a standard form for a value-added deal that covers all these ancillary rights. The best teacher is experience.
Q: Can an exclusive deal truly be exclusive?
A: The idea of exclusivity is an issue that transcends all of marketing. There have become so many different ways for competitors to tie in with whatever you think you’ve got exclusivity on. If I want to be the only soft drink integrated into a program, does that mean other soft drinks can’t advertise during the program? That’s a separate right that has to be negotiated. So, the idea of an exclusive association needs to be looked at very carefully in light of new technology and new media and new ways for marketers to tie into content.
Q: How does the enormous popularity of social networking sites like MySpace and YouTube affect legal considerations?
A: Interactive is going to be the biggest playing field for those types of issues. When you talk about sites like MySpace and YouTube, what you have to ask yourself is: How comfortable am I with getting placement on those Web sites when I can’t control the content? When there aren’t filters or controls over user-submitted content, will you be comfortable having your ad posted next to a spot where somebody might put up explicit photographs or profanity? That’s a big watch out; understanding who you’re associating with and do consumers draw associations between advertisers or sponsors and the content, such that they hold the advertisers or sponsors responsible for it.
Q: What are the concerns about users of social networking sites virally spreading marketing messages to potentially millions of consumers?
A: People would like to think of viral marketing as guerrilla marketing because what you’re trying to do is seed a marketing message into an area where people may not expect to get marketing messages. You’ve got to be careful doing that because the backlash can be horrible. People don’t want to be tricked. They don’t want to think that you are surreptitiously sneaking into a forum where you’re not allowed or they didn’t choose to see marketing messages. I liken it to pop-up ads. I hate pop-up ads. When I’m on the Internet and I get an ad that pops up, I’m not buying a product from whoever that was. I say that as a consumer, and as a marketer I don’t want to be that guy that just offended this consumer by interfering with their online experience.
Q: Do marketers have any recourse if negative comments about a brand begin to spread?
A: In the U.S. this is where people have the right to free speech. If you want to get into that space, you’ve got to get comfortable with the rules. If you start getting in there and you do it the wrong way, you’re putting a target on yourself. It can be very dangerous. If they’re not spreading false rumors or facts, there’s really nothing you can do, not to mention that it is not always easy to trace the source. As an advertiser, if you start intruding on that space, you’re going to get a response — positive or negative — instantly.
