Backstory: The swag-ger of Hollywood

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 weekend 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.

Alas, the publicity machine worked so well that even the IRS 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). And stars only 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 needed here – the answer is a resounding NO! Press and TV must swarm in to "report" on the hot items and the stars who are wearing, eating, or using them. And the media dutifully do – about 200 passed through Backstage Creations' lounge over the course of last weekend'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.

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The task of achieving this delicate balance falls to Karen Wood, founder of Backstage Creations. She is scarcely 5 feet tall, slim, and disarmingly 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, Ms. 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."

On the days of gift-lounge operation during the celebrity awards season, Wood brings in security, an energetic publicist who herds the media visitors, an event manager, and a dozen escorts who usher stars through the lounge, discreetly making sure that every vendor gets an opportunity to give. In case the media misses a moment, Wood had secured her own video team and an exclusive contract with a still photography/publicity service. Feeding this machine was the talent puller, Nanou. It may come as no surprise that the individual with just one name works most closely with the stars. This year for the first time, Wood engaged a certified public accountant, Janet Stern, who was on hand to answer any questions about taxes.

"Nothing has changed," Ms. Stern maintained, despite the fact that her very presence was a first. "If you receive a gift over $600 in value, you have to declare it," she said, referring to the law, which hasn't changed, except for its enforcement which led to near extinction of swag bags and the rise of the gift lounge.

Finally, no gift lounge is complete without lunch. This was overseen by Connie Guttersen – author of "The Sonoma Diet." It was a spread of wraps, green beans, and almonds; it's tastily designed with the waistline in mind – weight being one of the most reliable concerns in Hollywood.

The food looked great, and also as if it had taken hours to make. Which it may have – because it was prepared by private chef Sevan Abdessian. He spent two years cooking for Adam Sandler ("sloppy Joe, no bread") and has three agents – all of whom get him cooking jobs. Strangely, I never saw him leave to cook. His job appeared to be his presence, which I'm guessing reassured stars that the food wasn't made by any old schmo with a measuring cup.

The final piece to a gift lounge is, of course, the vendors. Wood seeks a mix of solid standards – BlackBerry, Fendi, and Lladro – and unknown new discoveries. Tzeira Sofer is one of the first timers. Her company, t'Zerah, offers an "illuminating lifting serum" made with white powdered gold. In case you didn't recognize the descriptors, this is a skin care product (30 mls – $185; entire Golden Globes collection – $595.00).

Kim Marshall, principal of her marketing company – The Marshall Plan – is a veteran gift-lounge vendor representative, exuding all the savvy and wit of her company's name. She is giving away a perennial favorite – five nights in resorts in Bora Bora ($1,000 to $1,500 a night might get you an over-water villa as big as a house – my house, anyway – with all the expected luxuries plus a private helicopter pad).

"This is a no-brainer," says Ms. Marshall, who gave away 70 Bora Bora packages that weekend.

OK, but the whole reason we were there was for the stars, who were flitting in and out of rehearsals for Monday's televised Golden Globes ceremony. I didn't see any during the time I was allowed in on Saturday. Finally, near the end of my allotted hour on Sunday, the photographer and video team began to fire away. Their focus was a very short, balding man who was ... well, rotund. I deduced from the physique that he couldn't be a star because, you know, stars are striking and only we public are short, bald, and fat. Only later did I realize this was Ken Davitian, famed for his nude male wrestling scene in Sacha Baron Cohen's blockbuster "Borat" comedy.

Well, I could hardly be expected to recognize Mr. Davitian with his clothes on. He soon left with a load of what seemed to be one of everything.

As my time ran out, I was ushered through the door. I had to wonder if this complex dance of fame and publicity really makes a difference.

"These days, it's all about product placement," a bright young escort named Chelsea Sallee told me.

"Nicole Kidman spends her honeymoon there," Marshall said of one of her Bora Bora resorts, Bora Nui. "Six months later, it's named the most romantic resort in the world. You can't tell me it doesn't help."

So I won't.

But I may think twice about the carefully chosen images in my next issue of People.