Product Placement Explodes Onto Our Screens.
It Could Be the Beginning of the End For the 30-Second Commercial

Philip Stone April 4, 2005

You think it is by chance that a rap song you may hear on the radio happens to mention McDonald’s hamburgers? Or that in Grammy-Award Winner Ashanti’s recent video showing her in the shower that Herbal Essence hair products are prominently displayed behind her? Or that an Herbal Essence advertisement plugs Ashanti’s latest song? Or that you will be seeing Volkswagens in a lot of new TV shows produced by NBC Universal, or that other programs will feature Fords. Or that ….
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Ashanti
out of the shower

No, none of it is coincidence. The advertising community has gone back to an old stand-by – product placement – to get their brands in front of your eyes. You, the consumer who hate commercials and who thought you were so smart in taping TV shows and then fast-forwarding through the ads -- once again the advertising community has figured out how to out-smart you!

But what is interesting this time, according to three new studies, is that while product placement is growing by some 30% annually we, the consumer, don’t actually object to it, assuming its done in a sophisticated manner and not thrown in our faces. Could it be we have finally reached a win-win situation between advertiser and consumer?.

According to a major US study carried out by PQMedia, the product placement business grew to $3.46 billion in 2004, 30.5% more than the year before. To put that in perspective, that’s about triple the value of US advertising on the Internet, with both product placement and Internet advertising forecast to grow some 25- 30% this year.

While movies have been the traditional home of product placement, television caught up in a big way in 2004, growing 46.4% to $1.88 billion, marking the first time that paid placements in television exceeded those in movies.

But the problem for the media is that this is not all new money flowing into product placement – some of it is being moved around from traditional advertising venues --  so while Hollywood may benefit it is well possible that TV stations may see their 30-second spot inventory dwindle. If that happens then television could well want to look to Hollywood for a share of the golden goose.

“Technological advances, most notably personal video recorders, and continued audience fragmentation, due to the growing popularity of new media, have led major marketers to become more skeptical of their return on investment in traditional advertising,” according to Patrick Quinn, president of PQ Media.

All of this jives well with a MindShare survey that reported that some 80% of Americans have a positive view of product placement although it does depend on how it is done, according to 46% of the respondents. Subtlety, not one of the advertising community’s ’s greatest virtues, is key.

“Product placement has emerged as one of the most powerful ways for a marketer to connect in a meaningful way with their consumer, according to Marc Goldstein, CEO of MindShare in North America. “Our findings indicate that the critical factor in making a product placement work is how it’s done.”

And there is little doubt that brands are getting the message. A separate survey by the Association of National Advertisers reported that 63% of a polled group of advertisers said they had already participated in product placement, but 80% said they would do so in the future.

Now, we, the consumer, are not stupid and we understand what is going on before our eyes, according to the MindShare survey. About two-thirds of the 1200 people polled by MindShare said they have noticed more product placement in TV shows, but at least one-third said they actually tried a product after seeing it in a movie or on TV.

And the demographics are perfect – 70% of the 18-49 age group said they were more likely to try a product, or at least look at in a store, compared with only 28% of those aged over 50. Neither gender nor household incomes seem to affect the numbers.

But as the advertising community gears up to jump on the bandwagon, the question becomes when will the consumer say enough is enough? Not any time soon, according to the experts. PQMedia says television will continue to outstrip movies as the home of product placement. Television producers are already taking steps in scripts to provide more opportunities for marketers, and as demand strengthens so will the price.

Fastest growing categories for product placements are food and beverage, travel and leisure, apparel and accessories, and, of course, automobiles.

But movies and television are not the only avenues. Authors have been paid to mention names of cars in their books, and now McDonalds is going after the young generation by offering rap songwriters between $1-5 for every time such a song they write is played on the radio.

We’ll have to wait and see if a Big Mac can bring out the same type of imagination and honesty as this line from Freek-a-Leek by Petey Pablo last year: “Now I got to give a shout to Seagram’s Gin, cause I’m drinkin’ it and they payin’ me for it.”

Now, that’s subtle!

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Where Are Those McDonalds Product Placement Rap Songs? – October 4, 2005

You haven’t heard them yet because they haven’t been recorded, apparently for a variety of reasons including a change of top management at McDonalds.

But also after the plan’s announcement various anti-obesity groups took umbrage, charging McDonald’s was targeting the youth market (well, yes!) but also making the point there was no way the young would figure out that a McDonalds sandwich mentioned in a song was a paid-for placement (and that’s a legitimate complaint!)

For all that, McDonalds says it plan is alive and well, just delayed.