Most people have probably heard the phrase “product placement” but may not know exactly what it does exactly refer to. Product placement is becoming an increasingly important and popular way for brands to reach their target audience in subtle ways. Businesses are using product placement to increase their sales, brand awareness, and draw in customers – all without “traditional ads”. Advertising professionals today are facing more challenges than ever before because of the dramatic way the mass media have transformed during the past 50 years. The changing media landscape has led advertisers to seek alternative methods, such as product placement, to establish brand contacts that were once dominated by traditional advertising.
What is product placement?
Product placement, also known as embedded marketing, is a marketing technique where specific products and their brands are incorporated into entertainment such as films or television shows with specific promotional intent, meaning they are embedded in another form of media. Nowadays firms have been innovating in the way they advertise to be more successful than a traditional advertisement. This is because it targets specific individuals and can be more effective by aiming at the demographic firms want to reach.
Evolution of product placement in films
Advertising professionals today are facing more challenges than ever before because of the dramatic way the mass media have transformed during the past 50 years. The changing media landscape has led advertisers to seek alternative methods, such as product placement, to establish brand contacts that were once dominated by traditional advertising.
One of the first documented use of product placement and earliest cited examples is James Dean’s use of an ACE comb in the 1955 classic Rebel Without a Cause. In the following months of 1955, ACE combs saw a significant increase in sales after the release of Rebel Without a Cause. Another great example is the 2003 film The Italian Job, which used BMW Mini Coppers as gateway vehicles. That year, BMW had a 22% increase in sales of Mini Coppers. Ray-Ban also associated more than 300 000 sales of a specific model of sunglasses to Tom Cruise’s wearing them in 1983’s box-office hit, Risky Business. Further, more than 40% of US blockbusters had Apple products in them. Since 1955, the initiative of including a branded product in entertainment as a form of advertisement has grown in popularity. Product placement has become increasingly more favored with the advancements of technology.
Advantages
With an increasing shift of consumers to online platforms such as Hulu and Netflix, traditional advertisements are losing viewers. In fact, due to the Coronavirus pandemic, streaming platforms have seen up to a 70 percent increase in usage (GlobalStats 2021). This makes the product placement a great way to target potential new consumers and consequently increase sales. Embedded marketing is also mutually beneficial for brands and production companies since it often allows for financial ability to produce entertainment in exchange for the countless amount of views of potential buyers. Furthermore, when customers see a celebrity using the product it can increase its value. This is a way of enhancing credibility and gaining visibility for brands.
Disadvantages
Nevertheless, with product placement comes the ethical problem of easily advertising “ethically charged” products such as guns, alcohol, and drugs. Embedded marketing has the goal of not being overly obvious to the viewer. This implies promoting these types of products to a large audience and possibly to a younger audience. Regarding these products, traditional advertisement has a set of rules to prevent them from being promoted to younger audiences or any audience at all. In 1970, cigarette ads were officially banned in the United States. Currently, the standard is that alcohol advertisements can only be placed in media where 70% of the audience is over the legal drinking age. Additionally, product placement can also represent a huge marketing risk. A bad movie leads to a bad image. Further, if spectators become aware of the embedded marketing, it can also be seen as annoying. In 2012, Amazing Spider-Man, the main character uses the search engine Bing. This received backlash since it became clear it was in fact product placement. According to data collected by GlobalStats in January 2021, only 2.71% of the world population uses the Bing search engine (comparing with 91.86% of the Google search engine).
Why is it a Nudge and why does product placement work?
The human subconscious is affected by advertising that is injected into something people are already emotionally involved in far more than when presented by itself, as in traditional advertisements. People do not turn the TV on to watch commercials but rather to watch programs. The placement of incorporated advertisements in TV shows can increase brand awareness by almost 20% (Russell, C., 2002). Also, if advertisements are placed into “emotionally engaging programs” that can increase brand recognition up to 43%. Research attributed this increase to what is called the “Halo effect” which is a positive association to the corresponding product by making a positive association with a show, a person, or a character. Thus, the goal of the brands is for the potential consumer to be positively influenced by the brand, without obviously noticing the placement of that brand.
Seamlessly integrating a brand into a film or tv show is crucial to create a successful product placement. When it is done right, it can produce both an increase in brand recognition and an unforgettable scene worth talking about later. It entails a balance between a brand being recognisable yet not too distracting to the viewers. This is a fine line and brands should be aware of this drawback in order to create a successful and entertaining advertisement for the brand and the consumer respectively.
Author
Sofia Murça - Research Analyst
References
StatCounter Global Stats. 2021. Search Engine Market Share Worldwide | StatCounter Global Stats. [online] Available at: <https://gs.statcounter.com/search-engine-market-share>
Kokemuller, N., n.d. Concept of Embedded Marketing & Product Placement. [online] Small Business - Chron.com. Available at: <https://smallbusiness.chron.com/concept-embedded-marketing-product-placement-20278.html>
Agency 850. n.d. Why Product Placement is More Effective | Agency 850. [online] Available at: <https://agency850.com/why-product-placement-is-more-effective-than-ever/>
Russell, C., 2002. Investigating the Effectiveness of Product Placements in Television Shows: The Role of Modality and Plot Connection Congruence on Brand Memory and Attitude. Journal of Consumer Research, 29(3), pp.306-318.
Nathanson, J., n.d. The Economics of Product Placements. [online] Priceonomics. Available at: <https://priceonomics.com/the-economics-of-product-placements/>