Product Placements: Advertising Without the Ads

Ever since the emergence of the DVR, television viewers have begun to believe that they actually have power over the advertising to which they are exposed. According to a recent Nielsen study, people who have recorded television tend to skip about one third of the commercials. But do the viewers really have control? Try sitting down for an episode of American Idol sans commercials and it will become quite obvious that it is impossible to avoid exposure to paid advertisements. Besides the scripted skits where contestants are seen singing and dancing around their Ford vehicles, it is difficult to watch the show for more than thirty seconds without seeing a Coca-Cola logo (pictured left) or hearing a plug for Cingular Wireless. American Idol is indeed the number one show in this category, and in the first half of 2007 it featured over 4,300 product placements. Brand promotions like these have a several advantages over traditional advertisements. Not only do they solve the problem of fast-forwarding through commercials, integrating a product into a script allows marketers to target specific audiences based on the nature of the program. Moreover, these advertisements last longer than a paid thirty second spot, especially when the products are incorporated into major motion pictures that are released on DVD and viewed countless times by huge audiences.

The practice of using brand names in television and cinema programming is not a new development, but due to the changing marketing landscape and of course the advent of the DVR, it has become a staple in virtually every type of entertainment. The first instance of a product placement actually dates back to the 1951 film The African Queen, where Katharine Hepburn is seen dumping a case of Gordon's Gin off of a ship. However, in 1982 this practice was launched into the Hollywood mainstream through the famous Reeses Pieces scene in ET (pictured right), which is said to have increased sales for Reeses by 65%. Nowadays, product placements are everywhere and have even extended into various alternative media such as video games, books, and the Internet. And advertisements integrated into traditional media have also developed quite a bit since the practice became popular. Not only are brands shown on screen, but now they are often used as central elements of the plot in many situations. One television program that is well-known for employing this technique is The Apprentice, where the master of consumerism himself Donald Trump presents contestants with challenges that often revolve around a certain company each episode. When Pontiac introduced its limited edition Solstice on the show its goal was to sell 1,000 cars in ten days. Surprisingly, they reached this target within forty-one minutes, even before the program aired on the West Coast, and ended up selling an additional 4,000 cars in the ten day period.

It is clear that product placements have the potential to make a notable impact on an audience, but not all advertisers see results like those of Pontiac. Sometimes using this technique can even backfire if the brand is not skillfully incorporated into the programming. A study at San Diego State University reveals that product placements that are incongruent with the plot are remembered more, but they "adversely affect brand attitudes because they seem out of place and are discounted." It is important to remember that the general public tends to have distrust towards advertisers and most people are quite skeptical when they feel like they are being targeted as consumers. For this reason investing in product placements can be a dangerous undertaking. It is especially risky considering the fact that this is not an overt advertisement and could be viewed as a sly trick to an already suspicious audience. Despite these inherent risks, the overall effect of a product placement seems to be a positive one. Moonhee Yang of the Manwa Broadcasting Corporation and David R. Roskos-Ewoldsen of he University of Alabama explored this subject in 2007. The Journal of Communication published their findings, which confirm that "levels of brand placements influence recognition of the target brand and attitudes toward the brand." Nielsen research further supports this relationship, demonstrating a positive audience impact of 42-62% among the top five product placements within the consumer packaged goods category.

These results are definitely having an effect on marketing decisions and advertisers continue to invest more and more money to have their brands appear in popular television shows and movies. Advertising Age's special product placement division, Madison + Vine, reports that "the typical sponsorship deal on a show like American Idol averages about $26 million." Of course, the price tag is not always that high. This type of endorsement can range from using a product as a central plot element to showing the logo somewhere in the background. The amount charged and effectiveness depends on factors such as screen time, visual prominence, plot connectedness, and if the brand is mentioned verbally. According to Annie Touliatos, the Director of Product Development & Marketing for Nielsen Product Placement Service, "product placement is being viewed more strategically and more frequently woven into the storyline to achieve a maximum and lasting impact." As marketers increase their focus on these kinds of alternative techniques they continue to step away from the conventional forms of advertising. Overall, "traditional ad spending was down in nine of 10 [consumer package goods] categories by as much as $122.2 million." Product placements have certainly had in impact on the marketing landscape since they were first used in 1951. With all the added pressures to reach wide audiences in unique and innovative ways, it is likely that this industry will only continue to grow and further move marketers away from traditional advertising methods.