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JC Penny to air live ads at MTV VMAsAugust 31st during the MTV Video Music Awards, JC Penny will air two live ads. It is uncertain if the idea was inspired by other "live" ads, such as live ads in the theatre, performance art type live ads. The seamless movement from the awards show into the ad is driven by technology that allows a screen with the awards show to be broadcast live into a screen embedded into the ad.
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Re: JC Penny to air live ads at MTV VMAs
Some more info here. Agency for this is DDB Worldwide.