In August last year, Coca-Cola was in serious trouble. In the magical paradise behind the Coke vending machine, where cheerful creatures use extravagant processes to bottle and chill every drink by hand, the great tap in the sky had run dry and one of the plucky creatures had to go up there and find the source.
Of course, it all worked out in the end, not least because this was just a mini-movie, part of Coca-Cola's Happiness Factory content project, which sits at the heart of the brand's revolutionary bid for enhanced customer engagement.
For marketers, it is the story behind the animated one that makes for a really engaging experience. This is the tale of product placement 2.0, otherwise known as brand integration or "trans-media storytelling", as Jonathan Mildenhall, Coca-Cola's vice-president for global creative and communications development, described the concept at last month's Media 360 conference.
Although few advertisers can afford to indulge in bespoke content creation on the scale of Coca-Cola, the concept of weaving brands into the fabric of genuine entertainment properties has creative thinkers believing they might just have stumbled on the new advertising paradigm.
This same thread runs through UK-originated media properties such as Bebo's Kate Modern and Sofia's Diary dramas, MySpace's forthcoming I Love Chieftown, Monocle's advertiser-funded Kita Koga manga strip and any other environments where brands are allowed to slot into the content to a depth unheard of in the days of traditional product placement.
What sets this type of activity apart from product placement in film and TV, as blasted by culture secretary Andy Burnham in his speech to the Convergence Think Tank this month, is that it is variously more overt, yet more subtle.
In the Bebo dramas, some brands are woven into storylines - providing the context is appropriate - while others feature only in the form of a cryptic slogan or an offline tie-in. Advertisers are involved at an early stage, and the desired effect is to lend realism to the production and value to the brand.
Luke Hyams, head writer and creator of Kate Modern, prefers to call the practice "brand integration" and he has as much right as anyone to name the concept, having attracted advertisers such as Microsoft, Procter & Gamble, Toyota, Cadbury Trebor Bassett and Orange to the medium.
"We were the first people doing brand integrations, and we've realised certain things work really well and certain things don't," he says. "It took me a little while to become aware of the idea that brands don't want their product placed - they want it integrated into the story and integrated with their brand value."
Warner Bros film One Missed Call was woven obliquely into an episode of Kate Modern after Hyams told Bebo he was interested in working with a horror movie. Here, the product placement involved only a missed-call storyline and some follow-up online advertising on the Kate Modern site.
In similarly indirect fashion, Sofia's Diary has a character, Pretty Boy, who endorses Nair hair removal products on his profile page, although not actually in the show. More explicitly, episodes have been built around storylines featuring Golddigga clothing and Unilever's Sure Girl teenage deodorant.
"It doesn't feel like in-your-face product placement," says series creator Nuno Bernardo. "It feels like something that is linked with the story."
Brand integration
Bebo is in the vanguard of integrating brands into online dramas, or webisodes, but MySpace is working on similar properties, such as Chieftown. Nick Reid, UK head of sales for MySpace, believes brand integration could become a major advertising channel, particularly for the hard-to-find youth audience. He says: "It is happening in two ways - brands are wanting to get involved in original content that people like ourselves are producing and many brands are looking to product their own content as well."
Lisa Lintott, director of cross-platform drama company Shimmer Productions, agrees that online drama is increasingly likely to be funded by brands. "We are talking to McDonald's now," she says. "They are looking at how we can develop a trans-media campaign for them. We are doing a drama for (urban magazine portal) RWD and part of the conversation is whether McDonald's will pay for it in its totality, or whether a number of brands will each put in a sum."
For multi-advertiser productions, a typical sales process has already been established. Writers liaise with the sales team early on, setting up the basic principles of the plot and identifying commercial possibilities they would be prepared to entertain. Interested advertisers and agencies then respond with a brief and the writers brainstorm a variety of treatments for consideration.
"Ultimately, sticking a bit of product in the video is not going to work," says Reid. "It is about getting the brands involved in the script at an early stage."
The test of brand integration, however sophisticated and next-level it might be, is in the way it is received. So far, the message seems to be that audiences do not object to brands, as long as they have not been crow-barred into the action.
Likewise, if a piece of content gives away too much of itself to a brand, the spell is easily broken. Hyams says: "Any time I have had brands telling me what to write, I am not happy with the results, and neither are the brands."
Clearly, all this is possible because the internet exists outside Ofcom's stringent, although potentially soon-to-relax, rules on product placement.
It is no surprise then that online broadcast appeals to TV production companies such as Endemol, whose recent reality series for Bebo, The Gap Year, launched with sponsors including Acuvue, Canon, the Royal Air Force, Tourism Auckland and Tourism Australia.
"We need to work with the new media broadcasters, particularly those with big audiences," says Julian Humphreys, head of digital at Endemol's branded entertainment arm New State. "If you can get a big distribution partner on board, that is a much easier proposition than just going to an advertiser or an agency with an idea."
Mounting challenges
However, the challenges for online broadcasters are already beginning to mount. Last month, Office of Fair Trading guidelines caught up with online brand integration, obliging producers to flag up advertorial content (see box, page 25).
Meanwhile, the blurring of online and offline broadcast is also beginning to create problems. The recent transition of Sofia's Diary to the Fiver channel marked the first time a piece of web drama was invited to cross over to TV, but the television version had to strip out all its brand integrations. "The sponsors on the Bebo episodes only got the webisodes; they didn't get any exposure on television," says Bernardo.
Such issues aside, the principles of brand integration go wider than online teen drama, according to Jon King, London managing director of Story Worldwide. He believes the diminishing power of advertising has prompted a shift in thinking.
"Currently, the extent of much branded content is to embed top-and-tails on a TV programme," he says. "Advertisers know that people are skipping advertising, so they have found a way to make their message an acceptable part of the programme."
According to King, such tactics don't go far enough in what Story Worldwide has identified as the age of "post-advertising" and nor does conventional product placement.
Instead, his agency's aim is to create "story platforms" for brands, carefully building their authority in chosen areas and focusing on quality of engagement, rather than simply hammering the brand and its products home.
Story's recent work for Lexus, Agent Provocateur and Duchy Originals demonstrates the breadth of its offering and the principles behind it. In addition to quality editorial content, these include micro-CRM, individual marketing and targeted user-generated content.
The agency's preoccupations tie into broader trends of branded content and brand positioning. On one level, it all comes back to the question brands are starting to ask: is it more valuable to be an integral, supporting player in something entertaining than the star of a transparently commercial ad that fails to engage?
In the meantime, according to Jennifer Hills, head of branded content at MediaCom, the opportunities for brand integration are mounting up, with all sorts of start-ups, many of them online TV channels, pitching proposals.
"Of course, this will further fragment audiences, especially in digital where traffic is transient," she says. "But for now, the examples of brands being able to create engaging, credible content continue to increase, and that is no bad thing."
THE REGULATIONS
The Government has been forced to consider relaxing Ofcom's existing guidelines on product placement on TV as part of the implementation of the new European Audio-Visual Services Directive.
However, in a blow to the UK ad industry, culture secretary Andy Burnham announced he believes product placement would contaminate TV programming and erode viewers' trust in the medium.
A further threat to brand integration has come from the Office of Fair Trading's Consumer Protection from Unfair Trading Regulations. The guidelines, which came into force on 26 May, are aimed at nefarious sales practices such as dealing in fake goods, using phoney credentials or running closing-down sales when you're not closing down.
But buried among these is a section on "being honest about advertorials", which states that "using editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content" is forbidden.
The effect on surreptitious online product placement is significant, with bumpers required before any content that involves brand integration.
While brand integration can continue under these conditions, there is a sense that one phase of the party is already over.
"It is a shame," says Kate Modern's Luke Hyams. "So far, it has been an absolute free-for-all: a case of give us a brand and let's see what we can do with it."
BRAND ENGAGEMENT - Advertisers weave themselves into online dramas
The nature of brand engagement in the current crop of online dramas is so diverse that there is no single model, but some advertisers certainly throw themselves into the process with enthusiasm.
"We had a great opportunity to do something with Cadbury's Creme Egg at Easter," says Kate Modern's Luke Hyams. "The brand value was 'make a mess' and 'set the goo free', and the advertiser was wonderfully helpful."
Not only did Cadbury Trebor Bassett supply the show with an egg-shaped car, but it supplied the producers with 20,000 Creme Eggs to hand out in London's Leicester Square and a life-size Creme Egg costume for one of Kate Modern's characters to wear. The character was duly chased around Leicester Square by large crowds of fans. "It was like a reverse running of the bull," says Hyams.
But there is no obligation for brands to be so overt in their support. As an online reality TV production, Endemol's The Gap Year owes its audience a little more realism than a soap-style drama might, so sponsors from Acuvue to Canon weave themselves into the action in a more natural fashion.
"We have two tourism boards as sponsors - Tourism Auckland and Tourism Australia - which, for a programme about travellers' adventures, is not hard to work with," says Cody Hogarth, managing director of New State. "The travellers promote the destinations just by spending time in each country."