Product Placements in Movies and on TV

An increasingly common way to promote a product or service is by showing the actual product or an ad for it as part of a movie or TV show. While such product placement does not constitute a major segment of the advertising and promotions business, it has proved effective for some companies and has taken on increased importance with advertisers' concerns over viewers' ability to avoid watching commercials. (Note: Like specialty advertising, product placement is sometimes considered a promotion rather than an advertising form. This distinction is not a critical one, and we have decided to treat product placement as a form of advertising.)

A number of companies pay to have their products used in movies and music videos. For example, in the movie Austin Powers, the villain Dr. Evil's spacecraft was in the shape of a "Big Boy" from the Big Boy restaurant chain. In Austin Powers III, Taco Bell, Jaguar, and Starbucks were just a few of the many product placements to appear. Essentially, this form is advertising without an advertising medium. Often, the audience doesn't realize a product promotion is going on (See Exhibit 13-12). Viewers tend to see brand names in films as lending realism to the story. Yet the impact on the buying public is real. For example, when Reese's Pieces were used in the movie E.T., sales rose 70 percent and the candies were added to the concessions of 800 movie theaters where they had previously not been sold.41 Sales of Ray-Ban Wayfarer sunglasses tripled after Tom Cruise wore them in the movie Risky Business, and Ray-Ban Aviator sales increased 40 percent after he wore them in Top Gun. After he wore Oakleys in Mission Impossible II, sales increased 80

percent.42

The move to place products on TV programs has also been on the increase, since 1988, when CBS broke its long-standing tradition of not mentioning brand names in its programs. The use of product placements has become commonplace, as demonstrated in IMC Perspective 13-1, and is also on the increase in foreign markets

Advantages of Product Placements Anumber of advantages of product tie-ins have been suggested:

1. Exposure. A large number of people see movies each year (over 1.4 billion admissions per year). The average film is estimated to have a life span of three and one-half years (with 75 million exposures), and most of the moviegoers are very attentive audience members. When this is combined with the increasing home video rental market and network and cable TV (for example, HBO, Showtime, the Movie Channel), the potential exposure for a product placed in a movie or on television is enormous. And this form of exposure is not subject to zapping, at least not in the theater.

High exposure numbers are also offered for TV tie-ins, based on the ratings and the possibility to direct the ad to a defined target market.

2. Frequency. Depending on how the product is used in the movie (or program), there may be ample opportunity for repeated exposures (many, for those who like to watch a program or movie more than once). For example, if you are a regular watcher of the CBS program Survivor, you will be exposed to the products placed therein a number of times.

3. Support for other media. Product placements may support other promotional tools. A trend in the movie industry is to have the client that is placing the product cross-promote the product and movie tie-in in multiple media venues as well as through the Internet and sales promotions.

4. Source association. In Chapter 6, we discussed the advantages of source identification. When consumers see their favorite movie star wearing Oakleys, drinking Starbucks coffee, or driving a Mercedes, this association may lead to a favorable product image. Most of those involved in the business of product placements believe that association with the proper source is critical to success.

5. Cost. While the cost of placing a product may range from free samples to $1 million, the latter is an extreme. The CPM for this form of advertising can be very low, owing to the high volume of exposures it generates.

6. Recall. A number of firms have measured the impact of product placements on next-day recall. Results ranged from Johnson's Baby Shampoo registering 20 percent to Kellogg's Corn Flakes registering 67 percent (in the movie Raising Arizona). Average recall is approximately 38 percent. Again, these scores are better than those reported for TV viewing. A study provided by Pola Gupta and Kenneth Lord showed that prominently displayed placements led to strong recall.43

7. Bypassing regulations. In the United States as well as many foreign countries, some products are not permitted to advertise on television or to specific market segments. Product placements have allowed the cigarette and liquor industries to have their products exposed, circumventing these restrictions.

8. Acceptance. A study by Pola Gupta and Stephen Gould indicated that viewers are accepting of product placements and in general evaluate them positively, though some products (alcohol, guns, cigarettes) are perceived as less acceptable.44

Disadvantages of Product Placements Some disadvantages are also associated with product placements:

1. High absolute cost. While the CPM may be very low for product placement in movies, the absolute cost of placing the product may be very high, pricing some advertisers out of the market. Although only a small percentage of placements are paid for directly, the increased demand by the studios for cross-promotions drives costs up considerably.

Continue reading here: How Can They Change the Ads on the Backstops between Innings Its Virtually Possible

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