Will Intuitive Surgical's Appearance on 'Grey's Anatomy' Boost Sales?

Includes: DIS, ISRG
by: Mike Huckman

Product placement in movies and TV shows has become commonplace. Usually it's a casual shot that blends into the scenery, sometimes it's a little more obvious - i.e. the Coke (NYSE:KO) cups on the American Idol judges' desk - and occasionally it hits you in the face. That was the case last night when I was being a couch potato watching the season finale of ABC's (NYSE:DIS) "Grey's Anatomy" on TiVo last night.

Essentially two commercials for Intiuitive Surgical (NASDAQ:ISRG), the company that makes operating-room robots, were embedded in the script for the show. And I can't imagine the actors were happy about having to pretend over-the-top effusiveness and to recite lines that were so blatantly written into the episode because ISRG was paying for the storyline. Although, these days maybe the actors are resigned to the fact that this kind of stuff helps pay their salaries.

It went like this. The chief of surgery, Dr. Webber, is trying to keep one of his top docs, Bailey, from defecting from his staff to pediatrics. So, he tries to woo and wow her by playing Santa Claus and buying the latest state of the art ISRG equipment. "No, you did not," Dr. Bailey said. (Yes, I actually rewound the TiVo and transcribed the dialogue.) "Oh, yes I did," replied Dr. Webber. "The daVinci SiHD Surgical System," he said like a proud papa. "Tell me you didn't wait until I all but left the general surgery program to buy us a daVinci," Dr. Bailey exclaimed. "Care to take it for a spin?" Webber asked. And then Bailey turns to him and with a #@*!-eating grin effuses, "Santa!"

Cut to a later scene when Dr. Bailey takes the daVinci for a spin. By now, she's referring to the thing as "Leo" (uh, Leonardo...as in daVinci) and verbalizing her amazement and wonder about everything it can do. "540-degree wristed movement. You can't do that with a lathroscopic," she says. "Or in open surgery," Webber adds before going on to claim that a doctor at The Cleveland Clinic is using a daVinci to do a "single incision gall bladder removal through the belly button." Oy!

I ran upstairs to my computer to Tweet about what I just saw and then Googled Intuitive Surgical's website where, lo and behold, it was cross-promoting the whole thing. "From Seattle Grace to a Real Hospital Near You," the homepage artwork with a Seattle skyline photo says. If you don't watch Grey's, Seattle Grace is the name of the hospital in the show.

ISRG shares have been on fire lately. They've surged from less than a hundred bucks in early April to more than $150 today. But the company reported flat sales in the first quarter, presumably as cash-strapped hospitals cutback on purchases of big ticket items like the daVinci. I don't know what the company spent for the Grey's thing, but I can't imagine some hospital CEO or CFO sitting at home watching the show and saying, "Wow. We just have to buy one of those, right now!" Or maybe ISRG thinks patients will come into hospitals now and ask if they have one of those fancy things they saw on that TV show. Either way, I can't see it driving sales. But it did get me to write about it.

UPDATE: A spokesperson for The Cleveland Clinic says the doctor the fictional Dr. Webber referred to in last night's "Grey's Anatomy" is a real doctor at the hospital. His name is Sricharan Chalikonda. Neither the hospital nor the doc had any heads up about the shoutout in the show. In fact, Dr. Chalikonda was in surgery last night when the progam aired. And, indeed, the "single incision gall bladder removal through the belly button" is one of the procedures he does with the daVinci. The hospital's checking to see if he has any relationship to ISRG. A Cleveland Clinic spokesperson says Dr. Chalikonda "teaches other surgeons how to use the (ISRG) robot on behalf of the company. He has also spoken at a conference for them. All of his ties have been disclosed per Cleveland Clinic guidelines."

Intuitive Surgical is located on the west coast. So, the folks there weren't at work yet when I called Friday morning seeking comment on what I thought was product placement in last night's "Grey's Anatomy." They all stayed up late to watch the show and then bask in the glow of the kind of advertising some might say money can't buy. And, in this case, apparently it didn't.

ISRG's Director of Marketing, Heather Chemtob, called later in the day to tell me it wasn't product placement at all and that no money changed hands. She said the folks at ABC's Grey's reached out to ISRG less than two months ago and asked to use one of its robots because it likes to keep it real. Of course, ISRG was more than happy to oblige. Chemtob said the company got to proof the script for the two scenes where the daVinci robot was used or talked about and sent a couple of "experts" to the set for the two-day shoot to make sure the device was used "appropriately." ISRG had once arranged a similar loaner to NBC's "ER," Chemtob told me.

She thought most of the stuff would end up on the proverbial cutting room floor, but the company was "amazed" by how much they actually put into the show.

So was I. As far as the cross-promotion ISRG is doing on its website, Chemtob said the company was careful not to use any images, clips or quotes from the show. They just wanted to capture any inquisitive viewers - I guess, like me maybe - who might have wanted to check out what the deal was with the thingamajig. "For us, it's just about patient education," Chemtob said.

But Miller Tabak healthcare analyst Les Funtleyder says there's more to it than that. He sent me an email after reading my earlier blog about all this to point out that Intuitive Surgical has "been encouraging DTC (direct to consumer) advertising for prostate and hysterectomies. Perhaps this is an extension of that. They want people to go into the doctor and specifically ask for 'the robot'."

Now they might be asking for 'the robot' they saw on "Grey's."

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