Product placements are supposed to be Madison Avenue's best defense against TV ad skipping, and reality shows in particular are saturated with them. But now that the networks have loaded up their schedules with reality shows, and they've loaded up those shows with products, they may have reached their limit

The number of product placements on television dropped 15% to 204,919 in the first half of 2008 from a year ago, according to Nielsen's tracking service Place*Views.

Some of this is the result of schedule shifts, as opposed to decreased demand from advertisers. Placements on cable dropped 20% drop on cable TV due to the removal or decreased frequency of reality shows like TLC's "American Chopper" and "Miami Ink" and MTV's "Pimp My Ride."

At the same time, placements were way up on broadcast TV (ABC, NBC, CBS, Fox, CW) because the networks loaded up on reality shows as replacement strike programming. NBC aired "The Biggest Loser" and "Deal or No Deal" and Fox, "Hell's Kitchen" and "American Idol."

But the drop-off suggest a levelling off after several years of growth. Just how much more product placements can TV absorb without turning off viewers?

But if TV has hit its saturation point, it's probably good news for Web video. Video advertising is still nascent, and audiences are small, so sponsorships and are really the only model for making Web video pay. So look for advertisers to step up their quest for Web video, and for more deals like Burger King's sponsorship of Seth MacFarlane's Cavalcade of Cartoon Comedy.

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