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.

The Mystery of the Consumer: Finding Needs and New Ways to Meet Them

The field of marketing is constantly being molded by an assortment of different factors including new ideas, technology, trends, laws, and most importantly consumers. Because consumers change, marketers need to continuously find new ways to reach them and meet their needs. Marketers today try to find any way possible of finding out exactly what it is their consumers want. Innovation becomes increasingly important, both as a means to connect with consumers and as a tool to stay ahead of the competition.

In order to explore this topic further, I have chosen to investigate the blogosphere. During my search, I have come across two interesting blog posts concerning consumer needs and finding innovative ways to serve them.

The first post that I have chosen was written by Larry Bailin, author of the book Mommy, Where do Customers Come From? (pictured left). The post (from connectedcustomers.net) is titled "Hungry for Better Service" and it discusses the implementation of an ESP System at TGI Fridays that allows the customers to notify the waiter electronically when they need assistance using the customer service watch (pictured below). Commenting on the importance of innovation and consumer needs, I have posted a reply on the site and copied it below for convenience.


The second post is one that was published on My Creative Team's blog (THINKing) titled "What Consumers Want." The blog is written by marketing professionals and this particular post gives some remarkable insight into how consumer research can influence marketing decisions in positive and negative ways. The author argues that it is not sufficient to ask consumers what they want, and we should instead be asking questions to discover how they think and how they make decisions. I have posted a comment in response to this post and I have copied it below.


Response to "Hungry for Better Service":

Thank you for the intriguing post on the new ESP System! As a student at the University of Southern California Marshall School of Business, I have come to realize that success in any organization goes far beyond simply meeting the needs of your customers. Success means reaching beyond the status-quo, and doing things that haven’t been done before. Given the competition present today in any industry, especially the restaurant industry, businesses need to be exceeding expectations instead of simply meeting needs. With its new ESP System, TGI Fridays did just that.

Not only does this device improve customer service, but it sets this restaurant apart from all of its competition. I think it is especially important for TGI Fridays to differentiate itself because it does not offer anything different from competing chains and its consumer base is not unique. With this innovation, however, consumers can clearly see the company taking extra steps to serve them. And there is no doubt that this effort is noticed, and talked about. Regardless of the food quality, people will be talking about TGI Fridays because they have come up with something new, something that is designed to make a better dining experience. The word of mouth advertising the company will receive from this innovation is well worth whatever investment they made to implement it.

I would also like to comment on another one of your points, which is the fact that customer service is generally not considered part of a company’s marketing strategy. I definitely agree that this is a crucial factor that can no longer be ignored. In fact, I think the only way to maintain a loyal customer base is to focus on constantly improving customer service. A company can only do so much to differentiate their products. When it is clear to the customer that you are going above and beyond to make their experience an enjoyable one, they will be yours forever.

Response to "What Consumers Want":

This post brings up an interesting point. Traditionally, the focus of marketing was to sell the product to the consumer, whether they wanted it or not. Unfortunately, the result of this tactic was often to present misleading information and deceive the consumers in order to get sales. I think this is where a lot of the mistrust in advertising by the general public stems from. Consumers don’t want to think of themselves as consumers. More importantly, they don’t want to feel like they are being tricked into buying something. They want to think that the companies they buy their products from actually care about them and want to help them solve all their problems.

Today, marketers have shifted their focus from trying to sell their products to an unassuming audience to finding out what their consumers wants and needs are and trying to satisfy those needs. This approach seems not only more humanitarian, but also more profitable. The solution is incredibly intuitive, ask the consumers what they want, then give it to them. But, as we all know, it isn’t that simple. As this post clearly argues, consumers don’t know what they want. In addition, there are too many other factors to consider when developing, redesigning, and marketing a product. Not only do consumers not know what they want and what they and others would actually buy, but they don’t know what is feasible given current technology and monetary constraints. They don’t have information on competitor’s strategies, and they don’t know what is best for your company. Moreover, it is crucial for any business to constantly innovate and think of new ways to serve their customers. Simply giving consumers what they ask for in a focus group or survey is certainly not enough to stay ahead of the game.

I think the point raised in this post concerning studying your consumers’ behaviors versus studying their preferences is entirely valid given my argument. The best way for marketers to learn about what their consumers want is by finding out exactly how they go about their days, what needs to they have that aren’t being met, how they make decisions, and what’s most important to them. Only by understanding how our consumers function can we begin to truly meet their needs.