When you can't tell the commercial from the show: advertisers are finding new ways to pitch their products--inside television shows.

• Author: Kafka, Peter
• Position: Media

Viewers who watch USA Network s House Wars--one of the more successful home-improvement reality shows--get to see four families vying to win a house they design week by week. Also starring on this reality show: Home Depot, General Motors, Hewlett Packard, and Nextel.

All four companies advertise during the show--and inside it. Each week, for instance, the families visit Home Depot to pick up supplies. And they get there in a GM vehicle.

For the networks, the embedded ads are a new source of revenue, in addition to selling time during commercial breaks: Networks typically charge advertisers an additional 20 percent to get their products into the program script itself.

Advertisers are interested in product placement because they're worried that viewers aren't paying attention to their ads--especially with the proliferation of devices like Tivo, which let viewers fast-forward through commercials. "What's going to happen with our medium is that advertisers are going to have to find new, more clever ways to get their point across," says Chuck Larsen, a Los Angeles-based TV consultant.

Incorporating products into programs is part art, part science. On the Bravo and NBC show Queer Eye for the Straight Guy, producers say they don't want to scare off viewers with a barrage of brands. So product and store shots usually appear for two or three seconds at most, says Marsha Turner, who handles the show's product placement. "If it's on any longer ... we find that people say 'My God, what are they doing?'" she says.

CRITICS' COMPLAINTS

The strategy does have its detractors: On NBC's reality show The Restaurant, producers spotlighted three advertisers--Coors Light, Mitsubishi, and American Express--that had paid a premium, and some TV critics found the frequent product shots annoying. But producer Ben Silverman says viewers don't mind embedded ads. "This show would not have happened if it wasn't for the advertisers," he says. "The audience gets that the show needs to be paid for." Still, some see a disturbing trend. An advocacy group, Commercial Alert, recently asked the Federal Communications Commission to regulate product placement.

Embedded ads are, in fact, nothing new. They've been appearing at a theater near you at least since the movie E.T. used Reese's Pieces candy as part of its plot in 1982.

More recently, British writer Fay Weldon was paid to mention jeweler Bulgari in her 2001 novel, conveniently entitled The Bulgari Connection; and rapper...