Product Placement Quiz
What brand of car had a starring role in a major action movie?
[Mini Cooper in The Italian Job]
What brands of household appliance is preferred on Wisteria Lane?
[Bosch and Thermador]
What brand of fast food is a requested destination in a video game?
[KFC or Pizza Hut in Crazy Taxi]
What brand of cookie was a favorite of Frasier on the eponymous show?
[Pepperidge Farm Milanos]
What brand of ant killer became a mainstay on The Sopranos?
[Raid from SC Johnson]
What brand of running shoe starred in the name of a song title?
[My Adidas from Run-DMC]

If you know the answers to any of the above, you’re living proof that product placement works!

Think Manolo Blahniks on Sex in the City. Hummers on CSI: Miami. Junior Mints on Seinfeld. Omega watches in James Bond flicks. Sears Craftsman tools on Extreme Makeover: Home Edition. Product placements have become a near-ubiquitous form of advertising, reaching across media, turning up in video games, sound tracks, television programs and movies. Just how pervasive are these placements? In the first six months of 2007, there were 25,497 consumer packaged good [CPG] product placements, totaling 132,125 seconds on the prime time entertainment programs tracked by the Nielsen Product Placement Service. That represents just 11% of all product placements during the time period.

A proud heritage
While critics of the product placement practice treat it as a relatively new development, the technique actually can trace its roots back to the 1951 movie The African Queen. An inspired brand manager paid to have star Katharine Hepburn dump cases of Gordon’s Gin overboard—with the label showing prominently. And so a new advertising vehicle was born.

Many believe that the growth in product placements is directly attributable to the rapid uptake of digital video recorders [DVRs]. Or perhaps the rise in popularity is due to the increasing phenomenon of multi-tasking media consumption. Whatever the reason, one thing is clear - advertisers will continue to look for ways to best reach their target audience. And what better way than to use a “show” rather than “tell” means to deliver the message.

Subliminal or overt
Whether the approach is obscure or obvious, using product placements as an integral part of a plot line or to provide context for a character basically comes down to a matter of taste and opinion. One example of subliminal advertising at the very best is ABC’s Extreme Makeover: Home Edition, where down-and-out families mired by tragedy get a brand new home for free- with all the bells and whistles. In the show, Sears tools, appliances, and such are used in the construction process and the final product. The show’s emotional build-up is closed with a heart-felt thanks - direct from the company for the privilege of being a part of the dream come true - pure genius!

One of the most overt examples of product placement is the top-rated show American Idol, where judges sit next to large red glasses emblazoned with the Coca-Cola logo and anxious contestants conduct a little idle chit-chat backstage in the Coca-Cola room, lined with vending machines stocked with Coca-Cola while sitting on a couch upholstered in the trademark Coca-Cola red.

At what cost
While product placements are routinely included with traditional advertising buys during negotiations, this alternative continues to realize disproportionate revenue benefits - particularly with high-profile shows. But as product placements continue to rise in popularity, you can be sure that costs will skyrocket as well. Advertising Age magazine reported that the typical sponsorship deal on a show like American Idol averages about $26 million. Anyone curious about the impact of product placement on traditional advertising spending need only look at the year-to-year changes to understand that dollars are being diverted to non-traditional alternatives. With the average network 30-second spot running as much as $700,000 for top-rated American Idol, it’s no wonder marketers want to ensure that their ads get seen.

For the top 10 CPG categories, traditional ad spending was down in nine of 10 categories by as much as $122.2 million, (some of which can be attributed to the airing of the 2006 winter Olympics): beer & wine, confectionery & snacks, cooking products & seasonings, food beverages, hair products, household accessories & miscellaneous, personal hygiene and health, soft drinks & bottled waters, and stationery & office suppliers. Only the medicines & proprietary remedies category posted an increase in spending during January-May 2007 versus the year prior.

Making their mark
According to a recent study by Massive, the Microsoft video game advertising network, and Nielsen Entertainment, product placement pays off for brands in more ways than one. The video product placement findings showed unexpectedly high double-digit increases on a host of key metrics: 69% increase in average ad rating, 64% increase in brand familiarity, 41% on average purchase consideration and ad recall, and 37% on brand rating.

Television product placement results proved equally impressive. Results for the Top 5 product placements within consumer packaged good categories for the first half of 2007 show: Coca-Cola registered a 43% positive audience impact for placements on the April 24 American Idol [FOX]; Powerade Drinks posted a 62% positive audience impact on the March 27 Driving Force [A&E]; Anheuser-Busch enjoyed a 42% positive audience impact rating on the April 7 American Brew [A&E]; Kit Kat candy bars savored a 38% positive audience impact for placements on the Human Giant [MTV]; and Nexxus Hair Care products registered a heady 59% positive audience impact on Shear Genius [BRAVO].

Where it counts
Major advertisers have clearly gotten the message that product placements can enhance conventional advertising nicely. In addition, product placements enjoy heighted impact and cachet from the implied endorsement of the setting—the character who uses the product and the show where it appears. Listed below is a complete listing of the Top 5 programs for the 2006-2007 television season through May 2007 and corresponding types and rates of product placements.

From a purely financial perspective, product placements boast a real cost advantage as well—there is minimal expensive production required, just delivery of the product and insertion into the script or show setting. In a challenging environment of alternative media and shifting viewing habits, product placements represent yet another opportunity for flexible marketers to stay in front of consumers and extend the brand relationship.