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The past couple of years have seen a step-up in branded entertainment as big-name clients such as Coca-Cola, Unilever and Procter & Gamble seek to develop their own TV properties.

At February's annual Madison & Vine conference (so-called because branded entertainment in the US finds itself at the crossroads between Hollywood and big business), American Express made an interesting announcement. John Hayes, AmEx's chief marketing officer, said that TV had dwindled to 35 per cent of AmEx's total communications from a whopping 80 per cent .

Instead of spot advertising, AmEx is producing a series of "Seinfeld webisodes" - five-minute videos available only on AmericanExpress.com.

AmEx joins a list of prestigious clients that are producing their own content: BMW's US agency, Fallon, developed mini-films using the talents of top Hollywood directors and actors; Coca-Cola has a significant deal with Universal Music Group, and AT&T supported American Idol, so viewers could vote via SMS only if they were AT&T customers.

Meanwhile, agencies are bolstering their branded-entertainment credentials.

Most recently, Omnicom hired Robert Riesenberg to head an "advertainment" unit. Reisenberg joined from Magna Global Entertainment, a division of Interpublic where he pro-duced landmark advertiser-funded programming.

At the end of last year, MindShare, which already has a programme and syndication division called BroadMind, formed a programming partnership with ABC in which the agency's advertisers will fund the development of primetime shows. And the Hollywood studio Miramax has signed a first-look deal for creative content with Mother in New York.

Irwin Gotlieb, the chairman of Group M, the WPP holding company for Mediaedge:cia and MindShare (which handles AmEx), has been taking a special interest in branded entertainment. "It's a global issue," Gotlieb says. "I think it's going to happen in different places at different times and the level of sensitivity to any brand integration that takes place will vary from market to market."

In the UK, Robin Aziz, the former chief executive of HHCL who founded The Entertainment Factor, agrees: "This is global and a huge issue. Ultimately, the brief is to create a new marketing model."

Meanwhile, in France, strict TV regulation means the French are used to innovating in terms of branded entertainment. "French regulations did not allow distributors to advertise on TV and so this has been a good opportunity," Jean-Marc Frantz, the chief executive of the French branded-entertainment specialist Communication & Programme, says. Forced to fund programmes, rather than make ads, the idea has caught on and now ad-funded shows are made by clients such as Orange or Unilever.

Communication & Programme produces Promenade de Sante for Unilever's Fruit d'Or, which airs on the mainstream French TV channel TF1. According to Geraldine Cros, the client services director at Initiative: "Promenade de Sante enables the brand to be associated with a TV show about health in the broadest sense. This helps reposition the brand in this sector, something that is not possible through traditional advertising."

There are already examples of pan-European initiatives. Gillette's World of Sport is often cited, but more recently Nokia bankrolled Fashion House, a reality-TV show that aired in several European countries.

The story in Asia is a little different. Although stations used to be keen to barter, the escalating interest in Chinese TV has given more power to the broadcasters, and state-owned stations monitor programme content closely. In Japan, sponsored programming is a low-key affair at present.

One of the most successful examples of a recent advertiser-funded show comes from Africa. Michael Power: Critical Assignment is a feature film funded by Diageo, starring the hero of a series of popular Guinness ads aired in Africa. As well as playing to audiences across the continent, it has been selected to open the New York African Film Festival.

Celia Couchman, the film's executive producer, was the marketing director for Guinness Africa from 1996 to 2000. Couchman and Diageo had several firm rules, the first of which was that if the film didn't come up to an international standard, then it would be canned. There was also a commitment to use African talent throughout. "It was made by Africans for Africans," Couchman says.

Getting the right quality is vital. As Gotlieb says, the wrong programming can damage a brand. "If the quality isn't sufficient and there's no audience, you can have all the brand integration you want and it's useless," he warns.

THE KEYS TO SUCCESS

- Branded entertainment involves three equally critical parties - the brand, the consumer and the media owner.

- If the production is going to be good enough, the production company has to be a quality act.

- Be sure of the on-screen regulations. If there's no product placement allowed in a territory, work on underscoring the brand values instead.

- Consider using a specialist agency to organise the production. They can negotiate the purchase of media space and check rights and legal clearances.

- Ask why the network would want the sort of show you're proposing. Will enough of the right sort of audience want to tune in?

- Consider testing where appropriate. Several companies can provide product-placement evaluation tools that offer a return on investment metric. These include Intermedia Advertising Group and Nielsen Media Research.

- Have patience. Often programmes will take a while to make a difference.

- Be clear about negotiating a time-slot that is going to fit your programme and audience.

- Try to place ads near the programme to reinforce the brand association.

- Be sensitive. Obvious product references are a turn-off for audiences.

As are productions that don't fit the culture of the territory in which they are airing.