Product placement is making a renewed impact on our collective commercial consciousness thanks to high-profile placements such as those in the films Castaway and The Matrix.
In the US, estimates put the value of the business at just over $1 billion - with more than 350 companies actively involved.
It's a worldwide phenomenon, too, with product placement adding value and visibility to brands on every continent. Leo Burnett recently established a new subsidiary, Leo Entertainment, in India to capitalise on the phenomenal growth of product placement and related commercial activity in Indian movies.
A decline in the effectiveness of conventional advertising is often cited as a reason for the increasingly popularity of product placement. "Above the line is effectively diminishing," Steve Read, the managing director of 1st Place, a UK-based product placement agency, says, predictably, "and product placement is now perceived as more important by 'agency land'. It's grown up a lot. It was a sideshow but now agencies take it seriously."
So prevalent has product placement become that the US Federal Communications Commission recently received a petition from Commercial Alert, a US consumer watchdog, which described product placement as "an affront to basic honesty". Commercial Alert aims to eradicate product placement from the big and small screens on behalf of all those who feel unable to escape the long shadow of advertising.
However, there is a generally accepted limit to the potential of the "genre". The brand has to fit the context and there is limited scope for placement in a scene.
Eric Dahlquist, the president of the Entertainment Resource and Marketing Association (the US industry body that represents those working in product placement), considers it a secondary support activity. He says that the influence of technology such as TiVo and PVR is still very small, although these are cited as one of the factors undermining the traditional commercial message from the TV.
"So many viewers tune out mentally when the ad break comes on," Frank Zazza, the founder of iTVX, explains, quoting recent research. The three-year-old iTVX aims to respond to the growing demand for evaluation in terms of worth and effectiveness.
Placing a value on product placement is something increasingly preoccupying all those involved, and not just in the US - ad agencies, their clients, product placement agencies and film and TV production companies.
"From audience measurement systems, it is well-known that people avoid watching commercial breaks," Konrad Pudlo, the director of Expert-Monitor in Poland, explains. "That is why advertisers are looking for new, unconventional 'technologies'." Expert-Monitor has created systems to measure every product placement exposition. "It enables us to evaluate each exposure for general and target audiences," Pudlo says. Recent product placement in Big Brother in Poland saw the brand awareness of Pilsner Urquell beer raised by 29 per cent, according to Pudlo, who says placement is good for introducing new or not well-known products.
"Coca-Cola India initiated a study while the Thums Up/Kaante (cola brand/movie) campaign was on the air to test the brand score on recall and brand image," Sanjay Bhutiani, the managing director of Leo Entertainment, says. "The Plan/8pm (movie/whisky brand) promotion helped the client gain more than 20 per cent market share and recall in just three weeks."
Despite this success, Bhutiani is quick to point out the universal truth of product placement: "They say one bad product placement can wipe out 25 good ones. Audiences hate a contrived placement as the creative integrity of the film is abused."
Subtlety is the rule. "Audiences in Europe were really cynical when Minority Report was released - they were shocked at the compromise of artistic integrity," Ariane Gaborit, an international associate director at MediaCom, says. Europe is generally perceived as being behind the American market, while the southern European countries are considered more relaxed in their observation of EC guidelines, partly relating to their televisual tradition of infomercials.
Whether at the client agency or production level, the process of distributing a commercial message is now considered much more sophisticated. "Every element is considered - public relations, product placement, packaging - with media, creative and client working together to ensure maximum effectiveness," Gaborit says.
Unfortunately for advertisers, product placement is less predictable than other forms of advertising. "Cadillac chose to use the The Matrix Reloaded as part of the launch of its CTS sedan," Dahlquist says. "However, the movie's release was delayed for almost a year after 9/11, long after the CTS launched. The net effect was that some promos were done to coincide with the movie but unavoidable problems such as these can seriously impact on a deal."
Furthermore, the production may not last long enough to give the brand the chance to make its mark. Several US TV series have recently met a swift end despite the considered involvement of big brand names.
It may come as a surprise to learn that 95 per cent of activity in such a thriving industry is likely to be free of charge. "The rules state that the requirement has to come from the programme-maker," Read says. "If that requirement is legitimate, the programme-maker should receive the goods at less than full cost to no cost at all. All sides know the rules and stick to them."
What was once considered a dubious commercial option has now become a legitimate and thriving industry; a subtle tool whose judicious implementation can make all the difference to a humble brand.
TEN LEVELS OF PLACEMENT
2. Background close-up
4. Foreground close-up
5. Hands-on (actor touches product)
6. Hands-on plus close-up
7. Implied endorsement (actor uses product). At this point, commercials
and product placements are considered equal.
8. Wardrobe (actor wears product)
9. Verbal (actor mentions product)
10. Verbal plus (actor mentions and touches the product)
[xyz]Based on the value of a 30-second commercial, it is simple to calculate
the cost of a commercial second and compare the cost of the product
placement second with a second in a conventional ad break.
In addition to these values, presence, impact and integration should
also be taken into consideration. Quality of resolution adds
substantially to the value of the product placement. The awareness
factor is a ratio based on the recall of a content of a show versus the
recall of the content of a commercial. This is 1.6 greater for
placements than for commercials.
This article was first published on Campaign