COMPANY TOWN : The Following Is a Paramount- Procter & Gamble Presentation

In what may be the first direct advertiser sponsorship of regular prime-time programs since the early days of television, Procter & Gamble Co. announced Thursday that it has formed an alliance with Paramount Television Group to fund the development of new network prime-time series.

Direct advertiser sponsorship of television shows was widespread in the 1950s and ‘60s, when companies such as Geritol sponsored such programs as the trivia show “21” and Procter & Gamble itself sponsored fare such as “P&G;’s Fireside Theater.”

That kind of sponsorship was generally abandoned 30 years ago--at least in prime time--because advertisers found it an inefficient use of their money, said David Perry, head of the television production department at the New York office of advertising firm Saatchi & Saatchi.

Cincinnati-based Procter & Gamble currently produces three soap operas, “Guiding Light,” “Another World” and “As the World Turns,” and also TV specials like the “People’s Choice Awards.”

The agreement is “unprecedented and ground-breaking” in that it is the first such direct prime-time sponsorship by an advertiser in decades, said Kerry McCluggage, chairman of the Paramount Television Group.

P&G--which; spends $3 billion annually to advertise products such as Tide detergent and Crest toothpaste--said its foray back into prime-time television sponsorship is part of an effort to ensure that it will continue to have access to broad groups of consumers. P&G; and Paramount, a unit of Viacom Inc., expect to announce their first joint project soon, they said.

Although advertisers can buy commercial spots during prime-time series directly through television networks--and reach as many as 40 million consumers at a time--P&G; took the unusual step of agreeing to finance programs to help ensure that network shows will continue to appeal to a broad audience, advertising executives said.

“Television shows are getting more and more fragmented, more and more targeted toward specific audiences,” said a media buyer at a major advertising agency who asked not to be identified. “Look what P&G; sells--products that just about everybody uses.”

P&G; would maintain some kind of priority for buying commercial time when the shows it develops with Paramount are licensed to television networks, P&G; spokesman Greg Rossiter said. P&G; advertising would come primarily during commercial breaks, he said. “It would not become, like, ‘Northern Exposure by Procter & Gamble,’ ” he said.

P&G; will probably also benefit from having its products showcased in its series, but that was not an important motivation for the deal, Rossiter said.

The main advantage for P&G; is that the deal will let it have access to advertising time in each jointly funded series throughout the life of the program, including network showings, syndication and international distribution, said Edwin Artzt, P&G; chairman and chief executive.

“We believe this action is necessary to ensure P&G; brands’ access to the best in advertiser-sponsored entertainment in the media environment of the future,” Artzt said. “We will be pursuing other such opportunities in the coming months.”

Paramount produces sitcoms and dramas such as “Frasier,” “Wings” and “Star Trek: Voyager” for various networks, among them its new United Paramount Network. With the P&G; agreement, the production company will gain an important source of development revenue, spokesman John Wentworth said.

The terms of the deal call for jointly funding the development of network series and first-run programs for syndication. Each company will shoulder half the cost of producing pilot shows and also for other new program opportunities, Rossiter said.

P&G; must invest in a certain number of television shows--to be developed by creative teams at Paramount--over a three-year period, Rossiter said. P&G; can choose which shows to join in on and which to pass up, but Rossiter would not say how many shows the consumer products giant would back altogether.

Specific dollar terms of the deal were not disclosed.