It’s popcorn time in advertising land

A new way of meshing moviemaking and advertising is happening right here, in a colorfully painted office that is, appropriately enough, smack-dab in the middle of the country, caught between Hollywood and Madison Avenue.

In recent years, advertisers have made clumsy attempts to compete with the Internet’s viral word-of-mouth campaigns and TiVo’s commercial-less entertainment.

But Tim McClure may soon put into practice a profoundly cynical and deeply radical plan: high-quality, feature length films produced by McClure that double as commercials for a stable of products his advertising agency already represents.

The entertainment produced at his independent Mythos Studios could fundamentally change the way audiences digest commercial pitches. But McClure says that when he puts his product-placement strategy into action, Mythos would become merely an extension, an exaggeration, of the sophisticated seduction consumers now expect. For the time being, Mythos is solely an entertainment venture -- one that McClure hopes will become an appealing platform for GSD&M;’s clients.

Mythos began inauspiciously four years ago to make a 40-minute Imax movie, “Texas: The Big Picture” (2002). But the film-as-product-placement idea gelled only about a year ago. Mythos operates out of McClure’s office at GSD&M;, the mega ad agency he co-founded and to which he helped attract monster accounts such as Wal-Mart, Southwest Airlines and DreamWorks SKG. (McClure himself came up with the state’s anti-littering slogan, “Don’t Mess With Texas.”)

He is an energetic, self-made multimillionaire who came here for college in the late 1960s, leaving behind him Corsicana, Texas, the rural hometown he describes as the “hub of the universe.” “And by hub,” he said, his eyes crinkling mischievously, “I mean the slowest moving part of a wheel.” McClure, 56, doesn’t do slow.

He pledged to investors that Mythos would churn out three to five films a year with budgets that range between $1.5 million and $3 million. He is currently in post-production with a feature length film and is completing shooting on a documentary.

“We’re doing this because there is an evolution, if not a revolution, in the ad business, brought on, in part, by the TiVo part of the world,” McClure said on a recent summer morning.

Nationwide, only about 1%, or about 1.6 million homes, are equipped with TiVo. The device enables television viewers to skip over commercials, and its popularity among wealthy trendsetters has sent chills down the spine of the advertising industry. For decades the commercial was the gold standard, and while many argue it remains the single most effective way to move product off the shelves, the Internet and TiVo are giving the traditional TV spot a run for its money just as the average production cost for a 30-second commercial has climbed to $358,000.

“It’s that creeping fear that people are ignoring the conventional forms of advertising,” said Fred Sattler, spokesman for Doner Advertising in Southfield, Mich., the agency hired by Blockbuster, Mazda and Six Flags Theme Parks.

If things work according to McClure’s plan, Mythos will diversify his ad business and position him for seamless product placement in GSD&M;’s backyard. “Advertising used to be product placement, but now it has to be branded entertainment,” he said. “If someone in a movie is going to drink a beer, why wouldn’t you want it to be one of your client’s beers?”

Still, McClure wants Mythos to prove its ability to make viable films before those conversations with clients begin.

McClure has assembled a $10 million to $50 million “film fund,” a pot of money that enables him to produce one movie after another, without losing time on what he calls the “soft cost” of raising funds for each project.

“If it doesn’t reach the masses, he’ll find an audience to make it economically viable,” said Geoff Armstrong, a Mythos investor and former backer of Magnolia Pictures, which made the Academy Award-nominated 2003 documentary “Capturing the Friedmans.”

McClure’s proven track record as a salesman reassured investors like Armstrong who have firsthand knowledge of the risks associated with moviemaking. Even the way McClure presented Mythos to potential backers reflected his background in advertising. Instead of mailing out a screenplay for a comedy he wanted Mythos to produce, McClure put together an “investor clip.” The clip for “Drop Dead Sexy” served as a sort of music video, with a summary of the plot and a view of the major actors, like Crispin Glover and Jason Lee, who had already submitted a letter of intent to be attached to the film.

“It was like getting a free look at the product before you’ve written a check,” said investor Ben Davis, managing member of Rapid Group, an intellectual-property group in Austin. “You bet on the horse, not on the race. Winners tend to win again and again. We’re making an investment and expect a return from it.... For us, the appeal of it was, No. 1: We think we can rip the cost out of the model. And No. 2: We liked the network GSD&M; has built. We’re backing a team that has good odds of success because of their experience and their Rolodex.”

“Drop Dead Sexy,” a dark comedy about a group of amateur thieves who turn to kidnapping, is in post-production, and McClure has already sold international distribution rights.

Last month, Mythos began shooting “Slam Planet: War of the Words,” a feature-length documentary similar to the award-winning 2003 documentary “Spellbound.” “Slam Planet” follows a team of local Austin poets in the months leading up to the National Poetry Slam that was held Aug. 3 to 8 in St. Louis.

McClure intends to submit both to the Sundance Film Festival. And while his overall plan for Mythos is intricate, his goals with regard to the festival are the same as those of every scruffy-faced twentysomething with a digital video camera: He hopes his projects are accepted, screened and attract a distributor.

“If one or more of these films gets into Sundance and one of our clients realizes this is a way to get their product into popular culture, that’s great,” McClure said. The deadline for Sundance is Sept. 24, and organizers declined to comment on any project that may be, or has been, submitted. The festival circuit is a risky route, but McClure jokes that the advertising agency’s moniker already gives him a leg up with Hollywood bigwigs.

“GSD&M; stands for Greed, Sex, Drugs & Money,” he says, laughing. (It’s really the first letters of the last names of a group of friends who graduated from University of Texas, Austin, and founded the firm in 1971.)

But some critics say experience in creating ad campaigns and designing television commercials is hardly sufficient preparation for feature film storytelling.

Mark DiMassimo, chief executive of DiMassimo Carr Brand Advocates, which represents Pfizer and Comcast, said Mythos Studios’ endeavor reeks of hubris.

“They do well in advertising, which is a difficult business, and they dream greater dreams. They want to fulfill the fantasy that they’re in entertainment,” he said. “But they underestimate the difficulties of the entertainment industry.” Part of that difficulty is fully developing characters and evocative situations, without insulting the audience with overt product placement.

“The very people who despise product placement in all of its forms are the ones who go to independent films,” said the head of one of the independent studios in Hollywood, who spoke only on the condition of not being named. “I think this guy is insane.”

But Miramax, the production company that brought the indie movie into the mainstream, embraced product placement years ago. The company cultivated corporate relationships with sponsors, most notably with Coors Brewing Co. “It’s hard to tell the story without including a normal situation, where the characters are in a bar or a restaurant or a shopping mall and you include what’s already there. Brands are an important part of creating that scene,” said Lori Sale, executive vice president of worldwide promotion at Miramax.

If Mythos does become a sort of in-house product placement vehicle for GSD&M;, McClure insists he’s savvy enough not to shove the advertising aspect down the throats of moviegoers. It won’t be like the old days, he said, when big studio films had everyone smoking the same brand of cigarette after sex.

Take “Slam Planet,” for example, he said. Ideally, the documentary will help foster a phenom of “slamming,” and it will become an effective and cool way for a younger generation to communicate. “Wouldn’t it be nice,” McClure asked in an offhand fashion, “if greeting card companies could send slams over the Internet like they send e-mail birthday greetings?” It could, in fact, be a reality.

After all, one of GSD&M;’s biggest clients is Hallmark.