Product Placement - The Next Frontier

Product placement is a fast-growing media option for buyers who are constantly confronted with the challenge of coming up with innovative media mixes. It helps advertisers cut through clutter, reach new audiences, and show the product in use. Downsides of product placement include legal issues, activist opposition, and the lack of a standard measurement and pricing system. Media professionals are discussing product placement frequently, debating its role in television, movies, and video games.

The main goal of product placement is to cut through the clutter of advertisements in the media by accessing the audience in original ways. Harrison Ford’s most recent movie “Firewall” became a marketing tool for Chrysler. Trailers for the movie were used as starting points for a Chrysler campaign that used the same style and promoted the placement in the movie. According to a Chrysler executive, "we're not trying to make a two-hour commercial, but rather cast our products in an entertaining environment” (2/10/2006). Product placement is also becoming more appealing because 78% of advertisers are losing confidence in traditional 30-second ads, as compared to how they felt two years ago (3/22/2006). Digital video recorders allow consumers to fast-forward through commercials, in fact, two-thirds of all digital video recorder owners skip most commercials (3/4/2006).

Product placement isn’t a replacement for the 30-second ad as much as it helps reinforce the message already in current advertising. While product placement occurrences have doubled since 2003 (3/4/2006), many of them have similar messages or themes to current advertising. An example of reinforcement is when Buick purchased a product placement in Desperate Housewives, where a character was shown modeling with the LaCrosse in a mall. This situation was also shown in similar Buick commercials throughout the night, but with a different model and slightly different set appearance. This slight difference prevented Buick from becoming overly repetitive (3/13/2006). Sears also uses this strategy with their placement in Extreme Makeover: Home Edition on ABC. Sears provides appliances and other items to ABC in exchange for goodwill-generating product placement and then ties in the placement with commercials during the show that display all the appliances donated (2/26/2006).

Product placement isn’t limited to television shows. Sports games and the Olympics feature many occurrences of placement, and even some product placement traditions. The Olympics feature champion athletes displaying their brands of choice during victory interviews, building a company’s reputation through positive association. Shaun White props his “Flow” snowboard up behind him in all of his interviews, getting his sponsor great placement on network TV (2/14/2006). Gatorade at football games has become a product placement tradition as players drink out of Gatorade bottles and dump the sports drink on the coach after winning games. Product placement also appears in video games, particularly games that are designed to be realistic. Gamers and designers believe that this makes the game more believable, and because “a quarter of US gamers have cut the time spent watching TV”, this is a good way to get to the demographic that is spending more time with video games than TV programs (3/19/2006). An extension of product placement in video games is the advergame, where advertisers have complete control over the design of the game and placement of the product. Jeep’s marketing executive believes, "gaming is a fun and creative way to increase brand awareness, build brand loyalty and educate consumers on vehicle attributes (3/20/2006).

There are legal issues surrounding the use of product placement. In Europe, product placement was banned until a proposal was accepted by the European Union. This proposal included a regulation that all shows that have product placement instances put a warning before each episode. This regulation allows an audience to remain passive, instead of consuming media in an active, analytical way. The proposal also allows networks that televise sports events to show advertisements during the game in a split-screen format, allowing advertising to have the same prominence as the game (3/16/2006). In the U.S., many organizations, such as Commercial Alert, have established organized campaigns against product placement, stating, "Television stations that cram their programs with product placements, yet fail to identify the sponsors in a conspicuous way, are brazenly violating the public’s right to know who is seeking to persuade them” (3/9/2006). This group believes they are trying to avoid a commercialized society, however, society is already at that point, and it is vital that media consumers become aware of the fact that product placement exists. Another controversy caused by product placement is the fight over whether or not it can be included in children’s programming. Products shown in these programs are often junk food and video games, and, because children don’t know that they’re being shown a paid placement, this should be avoided (2/20/2006).

The biggest controversy in the world of media is the difficulty in measuring and pricing product placement. The Q-Ratio has been developed, and it calculates effectiveness by determining “where the product appears in the frame and whether the brand name was spoken clearly". However, this ratio has not been accepted as an industry standard. VISA saw its sales rise after placement in the movie “National Treasure”, but the company believes other figures also contributed (3/24/2006). There are no rate cards for product placement, so pricing is decided in negotiations between advertisers and producers. Some instances are free because they are written into the script, but others pay for a movie’s production in its entirety (3/26/2006).

Product placement, as a new media option for buyers, is just beginning to take off. Eventually, evaluation and pricing will become standardized and legal issues will be ironed out. Because placement can access groups like college students, digital video recorder owners, and video game players, it gets to people that ordinary commercials can’t. Joseph Jaffe’s book “Life After the 30-Second Spot” discusses how advertisers are stuck in a rut of developing 30-second ads and believing “that by beating their prospects over the head with the same mundane message, consumers will eventually submit or succumb” (2/10/2006). Advertisers need to get innovative, a product placement allows them to do just that.