Production House Hoping to Extend Stars’ Shine

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Former football star Joe Theismann appears on TV to sell a prostate vitamin supplement. On another channel, talk-show host Larry King recommends breath mints. Elsewhere on the airwaves, actress Joan Lunden talks about a website to help find a nursing home or assisted living facility for aging parents.

All three were recruited and signed by Inter/Media Group of Cos., a direct-response TV commercial production house in Woodland Hills. Until now, the company only signed celebrities to pitch for its roster of large clients for big campaigns, such as those mentioned above. But last month, the company launched a division called Inter/Media Entertainment that will offer celebrity deal-making services to smaller companies and ad agencies.

Bob Yallen, chief executive of Inter/Media and one of the two lawyers who will oversee the new division, sees strong demand for a service that can deliver recognizable celebrities to regional retailers, small national brand products and startups.

“Everyone wants those multimillion-dollar celebrities that they can’t afford,” he said. “We get the right celebrity at an affordable price. It won’t be Jennifer Lopez, but it will be someone consumers can identify with.”

The new service has landed its first customer in Toppick, a fiber that lessens the appearance of thinning hair by intertwining with a person’s natural hair. Inter/Media Entertainment signed actor Bruce Boxleitner to represent the Santa Monica product.

While Hollywood is full of celebrity brokers and endorsement agencies, Inter/Media Entertainment plans to take a more scientific approach. From past experience with large clients, Inter/Media has data from thousands of ads selling dozens of products across the county. That data allows the new service to accurately predict how a celebrity commercial will affect sales, Yallen said.

The process begins with an analysis of a client’s product and the demographics and psychology of its customers. Then the company looks in its database of available celebrities, based on contacts with agents, talent managers and studio executives. After considering candidates’ age, reputation, popularity and believability ratings, Inter/Media comes up with three to five names to present to the client.

A number of factors, including cost, availability and willingness to sell, determine the celebrity who gets a contract offer.

“These (small) clients have products that are less prestigious, so selling them is harder,” Yallen said. “Getting an actor to do an ad for BMW is a lot easier than getting them to directly sell a product on TV.”

Inflated expectations?

The Inter/Media Entertainment contract features a test period of 90 to 120 days. In that time, the company films commercials with the celebrity and runs them on TV. The client could pay as little as $10,000 or as much as $100,000 for the celebrity and Inter/Media’s service fee. The client also needs about $300,000 to film the commercial and buy time on TV to run the ads.

At the end of the test, Inter/Media analyzes the data to see how much the celebrity can increase sales. Yallen said some companies have inflated expectations, thinking that a spokesperson can increase sales as much as 80 percent. He said a 30 percent to 35 percent increase is more realistic.

If the celebrity passes the test, the company can hire him or her in one-year increments for a maximum of seven years. The cost for the celebrity could run between $100,000 and $500,000 a year, and media costs could run into the millions. But the financial risk for the advertiser declines because increasing sales should more than pay for the ad campaign.

If the celebrity improves product sales slightly but doesn’t justify his or her cost during the test, Inter/Media Entertainment tries to negotiate a smaller payment.

“We show them the numbers and chances are they still will agree to a lower fee,” Yallen said.

Henry Eshelman, managing director of PR agency Platform Media Group in Hollywood, has worked with many celebrity spokespeople, including Kim Kardashian for her endorsements of Midori liquor and True Reflections perfume. He said Inter/Media faces a lot of competition, from large ad agencies with celebrity departments and even smaller independent companies that find ways to connect with celebrities for free. Apparel companies, for example, often give clothing to celebrities and then promote photos showing them wearing the garb.

But the bigger challenge for Inter/Media will be working with small companies unfamiliar with celebrity marketing, according to Eshelman.

“People make assumptions about what celebrities will do for money and they are often unpleasantly surprised,” he said. “Some celebrities want to monetize their every breath, others won’t do it at all, and many are hard to guess. Brands have to understand what they’re getting into and ask a lot of questions before engaging a spokesperson.”

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