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The history of product placement dates back to 1927. In the movie, Wings, a Hershey’s chocolate bar was placed strategically in a film shot. The film ended up winning the Best Picture Oscar (most likely irrespective of the Hershey’s bar.) However, it’s clear that product placement is by no means new.

Oscar-winning or not, movies are a great way to boost brand awareness and sales. Think of Rolex in Ocean’s 11, Ray-Ban in Risky Business, Nike in Back to the Future, or FedEx in Cast Away. Well-crafted product placement feels natural and is never annoying compared to traditional advertising. This is what makes product placement a win-win solution for brands and media manufacturers—one gets the glory, the other receives funding.

But, What Exactly is Product Placement?

Product placement is closely related to celebrity endorsement and even influencer marketing. The mechanics are somewhat different between the approaches, but the logic remains the same. Brands gain popularity and drive sales by promoting their products with popular people’s (or film’s) help.

On a more academic note, product placement is an advertising technique brands use to promote their products or services through the appearance in movies, TV shows, music videos and other forms of entertainment content.

Product placement is what happens when a brand pays for its product or service to be mentioned, used, or naturally featured on a screen. Usually, product placement is initiated and regulated through an agreement between a brand and a media company.

What about Product Placement in Film?

Product placement in movies is a huge (and profitable) industry these days. In the US alone, product placement spending is expected to reach $11,44 billion by 2019. Since 2012, the figure has more than doubled.

Apart from being a huge business, product placement is immensely effective, too—contributing to its profitability. As surveys suggest, more than half of Americans trust the silent advice celebrities give them from the screen. Nearly as much (49% of Americans) go even further and actually buy what they spotted in a movie.

The Pros and Cons of Product Placement Advertising

Embedding brands into entertainment is as efficient as it is risky. Below are the lists of biggest threats and opportunities associated with this marketing technique.

Product Placement Pros

  • Advanced Targeting—Product placement gives advertisers and brands an opportunity to grab the attention of people who may be difficult to reach with conventional advertising.
  • Minimized Risk of Ad Avoidance—Unlike with traditional ads, product placement ads cannot be skipped with a remote, clicked shut with a “close this ad” button, or blocked outright by a system-level ad blocker.
  • Undivided Attention—When a brand is embedded in a movie, TV show, or music video, it is likely to be featured in a clutter-free environment. There is no need to compete for attention with dozens of other brands.
  • Improved Efficiency—Since your target audience is likely to be in a relaxed state while watching a movie or TV show, the brand’s selling message is more likely to be heard.
  • Good Association—If a product is featured around a celebrity or beloved character, the audience will likely have a positive association with your brand without even realizing it.
  • Unaggressive Promotion—In product placement, brands are normally featured in a completely natural, authentic context, which makes people far less likely to perceive these advertising efforts as marketing.
  • Top-tier Influencer Marketing—Product placement in movies or TV shows is not much different from influencer marketing, which seems to be the hottest marketing strategy out there. The only difference is that a product ends up being featured on a big screen rather than YouTube, and it is mentioned or used by real celebrities rather than vloggers (No offense, vloggers! We love you, too).

Product Placement Cons

  • High cost—Product placement in movies or TV is by no means cheap. Unlike low-cost online ads such as banners or pop-ups, product placement requires significant investment. Depending on the popularity of a chosen movie or TV show and the terms of agreement, the price may vary from a few thousand dollars to covering the entire production cost.
  • Limited control over production—When a brand hires a production studio to shoot a commercial for its product, it is the brand that decides how and when a product will be featured on-screen. With product placement, the lion share of creative power remains in producers’ hands. This means a product might be featured or mentioned in a way that is not ideal for the brand.
  • Uncertain Deadlines—Not all movies, music videos, and TV shows are released on time. Delays happen for so many reasons and, as a brand owner or marketer, there is little you can do to influence the situation.
  • Too much is at stake—If a commercial fails, people talk about it for a few days or weeks at best; then the story fades into oblivion. If your banner ads don’t work as planned, you can change them or call them off. If your product placement ad fails, this failure will most certainly be remembered for years.

Three Things You Should Know About Product Placement

  • There is an antidote to product placement. Have you ever heard of product displacement? It is a term used to describe a situation when content producers are forced to remove trademarked products from their visuals as per request of a brand owner or in order to avoid paying licensing fees.

Fun fact: employees in McDonald’s are taught to keep Mickey D products out of any entertainment that is not family-friendly.

  • There is a thing called “retrospective product placement.” This term describes the practice of taking already existing movies or TV shows and changing trademarked mentions, names, logos, or products featured there for new ones.

Fun fact: A re-run of How I Met Your Mother (released in 2007) features ads for the movie Zoo Keeper that debuted years later, in 2011. Say “hi” to retrospective product placement!

  • Digital product placement is a thing. These days, product placement goes far beyond movies and TV shows. Due to technological advancements, we are now able to put ads into video games as well. The craziest part of this is that digital product placement makes it possible to advertise different brands in the same game or movie depending on where it is broadcasted—product placement targeting in action.

Fun fact: During Obama’s first election, billboards with his political campaign were inserted into 18 video games post-factum.

Principles of Successful Product Placement (for Marketers)

  • Make sure the brand is noticed but avoid making it the star of the show (even if its a few seconds we’re talking about).
  • Keep your target audience in mind. This will help you understand which genres and media formats to focus on.
  • If possible, request at least a tiny portion of creative control over the way your brand will be placed—get this documented in the agreement.
  • Pick movies and TV shows whose main idea is aligned with or at least does not contradict the values your brand stands for.
  • Look beyond only movies or TV shows. There are many other media formats you can potentially use for your product placement purposes. Video games, songs, music videos, augmented reality—your creativity is your limit.

Rethinking Our Media

Was it just soft drink-love that made Lana Del Rey name her song “Diet Mountain Dew” or is there more to the story? Is there some money-related reason why Justin Timberlake appears exclusively in Levi’s clothing in his recent music videos? Was it a part of the plot that James Bond preferred BMW Z3 or was a blank space left in the scene intentionally for vehicle manufacturers to bid?

There is one amazing thing about product placement. If orchestrated perfectly, it makes advertising feel almost as natural as breathing. After all, we all want to believe that characters on the screen are just as real as us. And what else can make them look more real than their love for a Vanilla Latte from Starbucks or a tradition to order Pizza Hut on Friday?

If done correctly, product placement can work wonders for brands. As years of experience confirm, product placement is a powerful advertising medium. It is one of the fastest ways to build brand awareness and create positive associations that will last for years.

What are some notable product placements that you remember from your favorite films?

Read more: Entertainment Marketing : Why TV Group Experiences Will Never Die, No Matter How Connected Or Personalized The Device