BROOKE GLADSTONE: Time was, we skipped commercials the old-fashioned way by going to the bathroom or grabbing a beer from the kitchen. Still, no matter how hard you tried, you still heard some ads, or parts of them. Then the skipping functions of devices like TiVo made commercial-free television truly possible. But you don't expect advertisers to give up without a fight. We've talked on the program before about network TV's doomed ad-based business model and speculated about what would take its place. Well, now we know -- it happens at a metaphorical intersection that Advertising Age has dubbed "Madison & Vine." It's where the lines between programming and advertising are blurred. Scott Donaton is the editor of Ad Age, and he's been right on top of this trend. Scott, welcome back to the show.

SCOTT DONATON: Thank you. Great to be here.

BROOKE GLADSTONE: So what exactly is Madison & Vine?

SCOTT DONATON: Basically, the idea is that as these new technologies really empower consumers, advertising as we know it, in some cases some forms of it may disappear, and one of the ways in which advertisers are still going to have to get their messages in front of consumers is to put it into the programming that they choose to spend time with, so that you basically can't zap it.

BROOKE GLADSTONE: Now this isn't a brand new idea. You were on this program a year and a half ago saying --cue tape --

SCOTT DONATON:Here what you have is, is people beginning to talk about developing scripts and programs first and foremost around the goal of selling the advertiser's product and with a secondary goal, maybe, of entertaining or informing the audience. And I've got to believe, when you really start to have this being, you know, one of every five shows we're watching and then one of every four shows we're watching, I think people are going to get fed up with that pretty quickly. The other thing is I think a lot of these programs that try to start with the advertiser in mind first are just going to be awful.

BROOKE GLADSTONE: So do you still think the programs are going to be awful?

SCOTT DONATON:This is in its earliest stages, and you're going to see a lot of bad attempts at this. You're going to see things that are over the top, and you're going to see things that viewers will just reject. And you're also going to see some things -- I mean a very good recent example is Coca-Cola's tie-in to American Idol -- that people are going to accept as being sort of natural and being fun and fitting in and, and that seem to be effective all the way around.

BROOKE GLADSTONE:The contestants went back into a Coca-Cola Room and held huge cups with Coca-Cola written on them, and talked about everything except Coke.

SCOTT DONATON: [LAUGHS] Yeah. I mean especially on reality programming we've seen a willingness on the part of consumers to accept this. I mean Survivor has been very aggressive, and they actually use the products as a reward, so that you might get, you know, a beer or you might get a bag of Doritos, and so these advertiser products that are used as the reward for having achieved the challenge end up seeming to be a good fit. You know, it's like wow -- I've been out in the sun for three days, and now they've given me a sixpack because I won this competition. My God -- I haven't had a beer, you know, in weeks. This is fabulous. You can't buy that kind of exposure and endorsement.

BROOKE GLADSTONE:This month there was the debut of a brand new and perhaps heightened example of this trend. ABC Television is making its biggest branded entertainment deal to date by signing Sears to be part of a program called Extreme Makeover -Home Edition. [TAPE PLAYS] [MUSIC UNDER]

MAN: This is a family that is design-wise challenged--

ANNOUNCER: They're about to receive the surprise renovation of their dreams. [SCREAMS OF SURPRISE AND DELIGHT]

SCOTT DONATON: Yes, and they're going to basically use Sears products and, and appliances, and, and they'll integrate them into the program so that they'll use Craftsman Tools when they're doing the makeover, and they might bring in Kenmore appliances, and, and again, it's all about how you integrate it and how natural it feels versus how blatant. You know, you've seen with Queer Eye for the Straight Guy that they do it a lot there, and I think they've done it well, because the camera doesn't spend all that long. You're aware of what store they're walking into. It doesn't sort of sit there and linger on the logo. They don't talk about it in some false conversation. The Restaurant was a bad example, I think, where it was over the top.

BROOKE GLADSTONE: And that show didn't last long.

SCOTT DONATON:That show didn't last long. It is coming back, but I've been told by a number of people involved that they've decided to really tone down the way the products are, are displayed in the second show.

BROOKE GLADSTONE:Also this month ABC made another deal with a media-buying business called Mind Share. It seems that Mind Share will be a matchmaker between the network and advertisers who will join together to create programming with sponsorship in mind, so it goes beyond Sears to perhaps a whole slate of programs. What do you make of this?

SCOTT DONATON: Madison & Vine is one of the hottest phenomenons out there right now, and one of the things that's happening is there's a land rush. Everybody wants to stake their claim. Everybody wants the prime position. So, in this case you have a, a big media agency that represents a lot of major advertisers who's saying, you know, if we can cut this deal to get first look at some of these upcoming ABC shows for our clients, you know, that can only be a good thing.

BROOKE GLADSTONE:BMW has gone even further. It's produced short movies that it's released on the internet, and I even saw one in a movie theater before an actual movie, which features BMW --but other than that is really just a fast-paced drama. [CAR ENGINES REVVING UP]

ANNOUNCER: From director John Woo-- [GLASS BREAKING, BRAKES SCREECHING]

MAN: Time and tide...

MAN: She'll be right there! [GLASS SHATTERING]

MAN: ...wait for no man... [BRAKES SCREECHING]

MAN: If you're going to do it, don't take her with you. [DANGER IS COMING MUSIC]

ANNOUNCER: Hostage -- now playing at BMW Films dot com. [MUSIC OUT]

SCOTT DONATON:These are kind of mind-blowing. The amazing thing is that BMW put these on the internet, and millions of people chose to come on to the internet, find these ads, seek them out, download them and then watch them. Who goes through that much trouble to watch a commercial? And the other amazing thing is how much they let go of the typical brand image that you would see in a commercial? I mean, a character in one of the films bleeds to death all over the back seat of a BMW.

BROOKE GLADSTONE: Not the way you want to picture your pristine leather upholstery.

SCOTT DONATON:Not normally. You did have a few people make jokes about maybe the point was that, you know, you can clean any stain out of your BMW, [LAUGHTER] but the point was that BMW was confident enough that people would be entertained by these pieces of film and would think more highly of BMW as a result of it. By the way, all of the films featured really incredible stunt driving that showed off very well the capabilities of the BMW cars.

BROOKE GLADSTONE:Now, Commercial Alert, a citizens action group, wants what it calls "concurrent, conspicuous and clear disclosures" every time a product is placed on the screen. In other words, you can't not notice it's product placement, if you follow Commercial Alert's dictum. It'll be right there, and they say that that is both legal and fair and the right way to go.

SCOTT DONATON: No, it's ridiculous. I mean first of all, people are savvy. And there's really nobody who's being misled who doesn't realize that Coca-Cola is an actual tie-in partner with American Idol. But the key to this is to make it something that blends into the program in, in a natural way -- when it works. And if you're going to suddenly be running type at the bottom of the screen saying "This is a Paid," you know, "Tie-In," that's going to be the end of all television as we know it. Who would, who would watch a television show like that?

BROOKE GLADSTONE: Thanks a lot, Scott.

SCOTT DONATON: Thank you.

BROOKE GLADSTONE:Advertising Age Editor Scott Donaton. As we just heard, Madison & Vine is one increasingly vital crossroad. Now that the Campaign Finance Reform Act has been upheld, maybe there will be a K Street & Vine, too, as politicos try to replace soft money advertising with product placements. [FRIENDS TV SHOW THEME PLAYS]

CHORUS: [SINGING] I'LL BE THERE FOR YOU...

DICK GEPHARDT: This president-- is a miserable failure. [LAUGHTER ON LAUGH TRACK]

LISA KUDROW: I know. [LAUGHTER] [FRIENDS TV SHOW THEME PLAYS] [HARP AND JAZZ SAXOPHONE MUSIC]

BOB GARFIELD: Coming up, book research made easy, even for the wired, and poetry copes with hitting the jackpot. [JAZZ SAXOPHONE UP AND UNDER]

BROOKE GLADSTONE: This is On the Media, from NPR.