Benefits And Challenges Of Using Product Placement

Marketing is one of the most important aspects of a company because they can use it to separate themselves from competitors. Advertising, selling, and research are essential to being successful in a competitive worldwide marketplace. The population has ever-changing demographics, interests, concerns, and views which keep marketers on their toes. Marketers must think outside the box to attract customers using a variety of different marketing strategies. One advertising tactic that has become common is the placement of products in different types of media. Product placement is one of the most effective marketing strategies used by blending traditional marketing and entertainment through movies, television shows, video games, and music to capture attention and increase sales of a product or brand.

Advertising is “any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor” (Armstrong & Kotler). From advertisements on TV, YouTube, websites, billboards, etc., advertising is a normal part of our everyday lives and integrated into our culture. There are millions of businesses in the United States of America, so each has to come up with a unique marketing mix to stand out from the rest. Product placement is a special form of advertising defined as “the integration of a product or a brand into a film or televised series” (Lehu, 1). In addition, novels, plays, video games, music videos, and much more can feature products or brands. Brand integration is also becoming popular among film directors and advertisers. Brand integration is “making the brand an inseparable part of some other form of entertainment or content” (Armstrong & Kotler).

Product placement and brand integration are not new to the advertising world. In fact, these strategies have been around since the late 1800s. One of the first sightings of placement was in Édouard Manet’s painting A Bar at the Folies-Bergère in 1882. A few beer bottles with a red triangle can be seen in the painting, leading people to believe they are Bass beer bottles. However, product placement wasn’t a “regular” form of advertising until the late 1900s. The most famous example is the explosion of sales in Reese’s Pieces after they were used in the 1982 film E.T. the Extra-Terrestrial. The directors and producers wanted to use M & M’s, but Mars declined so they turned to Hershey’s instead, which resulted in a 65% increase in sales. Finally, Disney popularized an old toy again after featuring it in the Toy Story franchise. Sales of the Etch-A-Sketch increased by more than 4000% after being used as one of Andy’s toys in the movies.

As demonstrated above, product placement strategies have become increasingly popular, especially in the United States. Investment in the United States amounted to only $190 million in 1974, increasing to $512 million in 1985, growing to $1.13 billion in 1994, and rising to $3.46 billion in 2004 (Lehu, 34). Worldwide investment in 2012 equated to $8.25 billion with around 64% from the United States and is projected to continue to grow. Although many companies pay to have their products intentionally featured in film and other forms of media, sometimes the directors and producers have to ask permission, or they end up there accidentally. This can lead to problems because it may result in “free” advertising for some companies, but others pay thousands or even millions of dollars to have their products featured. For example, earlier this year, a Starbucks cup was spotted during an episode of Game of Thrones resulting in lots of social media buzz. The cup wasn’t even from Starbucks, but it shows the brand’s strength and power, being evaluated at a 2.3 billion “free” advertising cost.

Costs of product placement can vary based on an abundance of factors. One of the most influential factors on price is whether an item is used actively or passively. Active means it was used by the actor, and passive means it was mainly part of the setting (Eagle & Dahl). If the actor is very famous and the movie is projected to do well, advertisers can expect to pay more. It also depends on if the logo, brand name, product, and packaging can be recognized or seamlessly integrated into the movie or TV show. Some directors just use the products as props, but others integrate them into the storyline, so it doesn’t seem like a forced placement/endorsement. Shrek and Shrek 2 integrate brands such as Baskin Robbins and Starbucks into the movies so that they fit within the time period of the Middle Ages by using the names Baskin Robinhood and Farbucks respectively.

Part of the reason for the increase in product placements and brand integration is the rise in commercial costs and fewer people viewing commercials. The costs are rising, and audiences are shrinking, so companies have switched from spending more of their advertising budgets on digital media. For example, the average for a single 30-second commercial is $350,000 and can rise depending on the popularity of the TV show it runs for (Armstrong & Kotler). With new streaming services and DVRs, it is not worth it to pay so much money for something people will just skip past. It is estimated that 2/3 viewers avoid commercials by muting the TV, channel surfing, switching the channel, or just avoiding them altogether. Companies should invest their money into movies and television, which have longer shelf-lives (re-runs) than a single expensive commercial being repeated over and over.

Products are usually placed where they are because they are intended to target a specific audience. This is a type of advertising objective which is “a specific communication task to be accomplished with a specific target audience during a specific time” (Armstrong & Kotler). Advertising objectives can inform, persuade or remind audiences of a product and its purpose. For example, the Ninja Turtles have eaten Domino’s pizza with the intended audience being children and their families (Lehu, 45). Pizza is an easy, quick option for families with young kids who are picky eaters, so it attracts a wide arrange of people.

However, advertisers face some challenges when using product placement as a form of advertising. Sometimes, movies or TV shows may not be as successful or well-received as they hoped, leaving them with less profit than anticipated. Marketers are essentially handing over their duties to the director so they have less control, which could lead to the product being used in a way they might not like. Furthermore, product placements can be “distracting,” seeming more like an hour or more long commercial. They can distract from the content and leave viewers dissatisfied potentially leading to negative reviews/feedback (Lehu, 62). Also, like many other forms of advertising, there are ethical issues advertisers must be aware of. People (especially children) may not be fully aware they are being targeted. If you choose not to watch regular commercials you are fully aware of it, but in the program, you don’t really have a choice. Certain products like soda, candy, junk food, sugar, alcohol, drugs, cigarettes, etc., have an adverse effect on children and teenagers because they don’t understand they are being persuaded and don’t have that ability to understand. Tobacco, alcohol, and vaping are seen as “cool” or “desirable” to teenagers and can even lead to death. Marlboro paid $42,000 for 22 placements of their cigarettes in Superman II. The film, The Tourist, featuring Johnny Depp shows several scenes of him smoking an e-cigarette, leading to renormalizing smoking without knowing the full long-term effects that it has on their body.

Instead of targeting and influencing children, healthier products should be used and promoted instead of unhealthy ones. However, this is still problematic because healthier food companies might not have as much money for these things compared to Pepsi, Lays, Hershey’s, etc. that have been around much longer; therefore, being much more profitable. The producers and editors of the video productions should be more diligent in only including products if they are endorsed/paid for, so they don’t produce an unfair advantage (Tang). The Entertainment Resources and Marketing Association (ERMA) of the United States, and the Entertainment Marketing Association of the United Kingdom have established a code of ethics to combat some of these issues, but perhaps more regulations should be imposed to protect consumers (Karrh).

Although product placements have some drawbacks such as subliminal advertising, ethical issues, and negative effects on children, they prove to be one of the most effective forms of advertising in the market today. Mixing advertising and entertainment has been successful and continues to grow worldwide. Will you be persuaded to make a purchase by the placement of a product?

Works Cited

• Armstrong, Gary and Philip Kotler. Marketing: An Introduction. E-book, 14th ed., Hoboken, NJ: Pearson, 2020.
• Eagle, Lynne and Stephan Dahl. “Product Placement in Old and New Media: Examining the Evidence for Concern.” Journal of Business Ethics, vol. 147, no. 3, Feb. 2018, pp. 605-618. EBSCOhost, doi:10.1007/s10551-015-2955-z. Accessed 8 Nov. 2019.
• Karrh, James A., et al. “Practitioners’ Evolving Views on Product Placement Effectiveness.” Journal on Advertising Research, vol. 43, no. 2, June 2003, pp. 138-149. EBSCOhost, doi:10.2501/JAR-43-2-138-149. Accessed 18 Nov. 2019.
• Lehu, Jean-Marc. Branded Entertainment: Product Placement & Brand Strategy in the Entertainment Business. Philadelphia: Kogan Page, 2009. Print.
• Tang, Kay. “The Ethics of Product Placement in Television.” Azcentral, https://yourbusiness.azcentral.com/ethics-product-placement-television-11974.html. Accessed 20 Oct. 2019.
• Whitten, Sarah. “Starbucks Got an Estimated $2.3 Billion in Free Advertising From ‘Game of Thrones’ Gaffe, and it Wasn’t Even its Coffee Cup.” CNBC, 8 May 2019, www.cnbc.com/2019/05/07/starbucks-got-2point3-billion-in-free-advertising-from-game-of-thrones-gaffe.html. Accessed 20 Oct. 2019.