The swag-ger of Hollywood

By Christian Science Monitor

Giving things away is obviously bad business and a notion so un-American that it's called socialism or welfare. Right?

Well, no, in fact. It can be a part of a shrewd advertising tactic that can rocket companies into the rarefied limelight of sizzling-hot brandland. The key is to get your freebies, known in Hollywood as swag, into the right hands -- that is, the hands of stars.

How?

To find out, I journeyed last month straight into the heart of the Kingdom of Gratis, the official "gift lounge" for the 2007 Golden Globes awards held in the Beverly Hilton Hotel. Gift lounges are a standard behind-the-scenes part of this, the awards-show season.

The idea is simple: Stars attending and in the show are invited to stop by and browse where carefully selected vendors offer swag. Stuff like a designer leather diaper bag, brand-name eyewear and figurines, a cruise, a stay in Bora Bora and, oh yes, a savory free lunch. These are not things that will show up at the 99-cent store.

In the past, stars who did awards shows got party-favor bags. Not party-favor bags like you and I get, with a pencil, stickers and some candy. These were swag bags with chic loot worth as much as $50,000. It was a great way for brand-name merchandise to be placed directly into the hands of stars.

The idea is that the star holds, wears, uses or consumes the merchandise, the media photographs this, the public rushes out in droves to buy what their favorite star owns -- the only difference being that the public pays for theirs.

Getting around the IRS

Alas, the publicity machine worked so well that even the Internal Revenue Service noticed. This led to considerable attention (largely negative), to say nothing of tax liability (indisputably negative). To make matters worse, merchandisers found that stars were often not even looking in these bags but instead giving the stuff away (haven't we already established that was un-American?!).

Enter the gift lounge, where stars can choose their swag. Contact is face to face: Vendors speak to stars directly, receiving valuable reactions that they can quote, if stars give permission. Stars pay taxes only on what they keep -- at least, they're supposed to. Everyone wins.

Here's where the Fourth Estate comes in -- because if a star accepts a free gift in a forest and nobody sees it, has it really been given? No Socrates is needed here. The answer is a resounding no!

Press and TV journalists must swarm in to "report" on the hot items and the stars who are wearing, eating or using them. And the media dutifully does -- about 200 reporters passed through Backstage Creations' lounge over the course of last month's Golden Globe rehearsals.

But here's the rub: The media must report on this hog heaven in a respectful way, so that stars don't feel "uncomfortable." There's a built-in tension here that would inflame Aaron Sorkin. The gift-lounge environment must be low-key, carefully controlled, exclusive and broadcast to millions or, preferably, billions.

Room for swag

The task of achieving this delicate balance falls to Karen Wood, the founder of Backstage Creations. She is scarcely 5 feet tall, slim and soft-spoken. But clearly she doesn't blow over easily in a storm because the gift-lounge business is not for the faint of heart.

To craft the lounge environment, Wood turns to a team of sharp and capable types that begins with a designer, Raece, whose name rhymes with his magazine, Space. A burly Australian, he was charged with turning a flaccid hotel conference room with coffee-colored walls into something dynamic, bold and suitable for prime time. His $20,000 worth of lights proved no help when electricians couldn't tie them into the wiring system. And he wasn't allowed to put anything on the walls, even though just about anything would have been better. "You can have a plan," he explained affably, "but it's always broken-field running."

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