Watching Leno? Then you won't miss McDonald's ads

Jay Leno will race an electric Ford Focus and raffle prizes for McDonald's during his NBC show that starts tonight, demonstrating how far the network will go to pull in advertisers.

Marketers such as McDonald's Corp. are paying NBC a premium above standard 30-second ad rates to weave their products into the 10 p.m. program, according to Michael Pilot, the network's head of sales. That increases the show's revenue and makes it less likely viewers will skip the segments.

"NBC has been open in embracing alternative formats beyond the traditional 30-second spot," John Rash, director of media analysis at Campbell Mithun in Minneapolis, said in an interview. "And in many ways Jay Leno breaks the mold of a prime-time show, including the marketing component."

"The Jay Leno Show," which debuts with Jerry Seinfeld as a guest, may not draw more viewers than CBS Corp.'s slate of dramas including "CSI" or the 10 p.m. lineup on Walt Disney Co.'s ABC. With fewer viewers and lower ad rates, the marketing partnerships give NBC a way to narrow the gap.

Even in third place, Leno has a shot at a success if he can attract close to the 4.7 million viewers who regularly saw him on "The Tonight Show," said Andy Donchin, director of media investment at Carat USA in New York.

"Any more than that would be icing on the cake," Donchin said in an interview. "We have reasonable expectations."

The network, owned by General Electric Co., can produce four or five talk shows for the $3 million it costs to air a single one-hour drama, Leno and company officials have said.

That may allow the network to improve profit with ads that cost less than the $122,000 that Nielsen Co. data show NBC charged for 30-second spots on "Law & Order: SVU" last September. "SVU" averaged 9.3 million viewers last season.

'Green Car Challenge'

Ford Motor Co.'s "Green Car Challenge" pits celebrity guests against the 59-year-old talk-show host on a racetrack near Leno's Universal Studios set in Los Angeles, the Dearborn, Michigan-based automaker said in a Sept. 9 statement.

Leno, an auto enthusiast whose own collection can be seen on a Web site, met with Ford Chief Executive Officer Alan Mulally and other executives in April after doing free shows for unemployed auto workers, Connie Fontaine, manager of the carmaker's brand and content alliances, said in an interview.

The TV host brought up the idea of creating a racetrack as part of the show after driving the Fusion hybrid and electric Focus, Fontaine said. Ford will provide two vehicles and sponsor the races, which will take place two or three times a week depending on the guests, she said.

Showcase

"He wanted to showcase that electric cars can be fun, fast and cool," said Fontaine, who declined to provide financial terms. "Showing the vehicle in a fun way with celebrities will resonate with people more than a 30-second commercial."

McDonald's Monopoly promotion starts Oct. 6. Winners will be selected on a gold-plated, McDonald's-branded circular set, Douglas Freeland, director of marketing at the Oak Brook-based fast-food chain, the world's biggest restaurant company, said in an interview.

For 29 straight nights, a McDonald's customer has a chance to win as much as $1 million, said Freeland, who oversees the promotion. A network celebrity will draw two dice from a see- through lottery machine. If both show sixes, the contestant wins the top prize. Other combinations are worth $10,000, he said.

The cost of the Monopoly campaign is higher than what the company might spend on equivalent 30-second ads because of the integration of the promotion on NBC, which is also providing network assets and talent, said Peter Sterling, who oversees McDonald's U.S. media buying.

It is McDonald's biggest promotion in more than 20 years, Sterling said in an interview.

Ratings Laggard

NBC announced last year it would move Leno to 10 p.m. from 11:30 p.m., a move the network said would bolster the profitability of its prime-time schedule. Conan O'Brien took over as host of "The Tonight Show" in June.

Integrating advertisers into shows has grown in popularity on NBC, with as many as 80 campaigns in the last two seasons, said Pilot. Last year in "30 Rock," characters played by Alec Baldwin and Salma Hayek shared a McFlurry dessert at McDonald's.

"'Leno' is a premium vehicle," Pilot said. "Advertisers recognize that and are willing to pay for it."

GE, based in Fairfield, Connecticut, fell 13 cents to $14.67 on Sept. 11 in New York Stock Exchange composite trading. It has declined 9.4 percent this year.

NBC's average prime-time audience fell 5 percent to 7.36 million in the season that ended in May and declined 2.3 percent to 3.37 million in the 18-to-49 age group most sought by advertisers, according to data from New York-based Nielsen. New York-based NBC's ad sales ahead of the TV season that starts Sept. 21 fell by as much as 20 percent from $1.9 billion last year, according to people with knowledge of the deals.

"NBC has clearly demonstrated their desire to find new and unique ways to partner with their clients," McDonald's Sterling said. "They have certainly demonstrated that to us and we feel very, very positive about our relationship."