Product Placement: Why Do We 'Place' Them?

Published by MBA Skool Team, Published on September 09, 2012

“If you don’t get noticed, you don’t have anything. You just have to be noticed, but the art is in getting noticed naturally, without screaming or without tricks.” – Leo Burnett

Do you flip advertisement page while reading a magazine? Do you fast forward commercials while watching the television? Do you change the radio station when you hear the commercials? The answer to most of the questions must be yes. The reason behind this is that the existence of so much advertising makes advertising less effective. This is because the existence of so much advertising has made advertising less effective.

People are no longer interested in advertisements be it in any form i.e. radio, television, banners or magazines. They mostly try to skip the commercials. A research has identified that approximately 75% of the advertisements are skipped by viewers. Technological advancements like DVR which allows user to fast forward the ads which adds even more to the number of advertisements skipped.

Conventional methods of marketing are becoming obsolete day by day. Since marketing is a very important nerve for any company to sell its products, companies had to come up with a more innovative approach of advertising their brands. In order to sustain in a competitive market few of the marketers have come up with the idea of product placement wherein branding of goods and services are done through the medium of movies, television shows, or news programs.

Culture and communication are the factors determining the impact of product placements on viewers. India, which has collectivist culture and a non verbal style of communication, offer more opportunities for viewers to note brands in movies. The Indian audience adores their favorite actors and actresses and follows them for new trends, fashions, and hairstyles.

Starting of this form of marketing dates back to mid of 19Th century where the movie “Chalti ka Naam Gadi “ had “Coca Cola “ brand in it. Recent examples are ‘Fashion’ featuring “Sunshine” and “Kimaya” and ‘Dostana’ featuring “Verve “magazine in it.

There are various ways of product placement. Product can either be placed in

  • Background - A particular brand/product is shown in the background but is not important to the story
  • Used by Character - A particular brand/product is actually used by the character in the story
  • Story Connection - A particular brand/product is actually related to the plot of the movie

Following list illustrates the use of products in different movies:

A study was conducted by Moonhee Yang and David Roskos-Ewoldsen wherein they asked 373 students from the University of Alabama to watch one of 15, 20 minute clips from a major Hollywood movie. Few of the brands were intentionally shown in the middle of the clip. These brands were placed in one of the three categories of product placement. After few minutes of showing the clip, the students were asked to recollect which brands they saw in the clip. Below is the graph depicting the percent of brand recognition when a particular category of product placement is used for marketing a particular product/brand:

It can be seen that a product is recognized significantly if it is connected to the storyline or is actually used by the character rather than just displaying it in the background. A product placement is said to be well planned if the product fits into the context and brand is delivered to the customer and it creates an impact and lives in the hearts of viewers.

This style of marketing benefits both the advertisers as well as broadcasters. For advertisers it increases visibility of the brand and increases chances of brand recall. For the broadcasters it brings in more advertising offers and increased revenues.

Product Placements on TV:

Product placement has seen a huge popularity on the silver screen as well.  It has become a very common way to advertise a product. Reality shows like Bigg Boss, Indian Idol, America’s got talent are a few wherein product placement is used aggressively. Usually they have branded coffee mugs and/or laptops as a part of their product placement campaign. In Bigg Boss 3, Vodafone, the title sponsor of the show, placed their logo inside the swimming pool.

UK, probably the only market in the world who had a ban on television product placements has also lifted the ban temporarily. Even though the ban is lifted, the broadcasters have a lot of restrictions on the content of the advertisements. They are not allowed to advertise for gambling, alcohol, junk food, medicine, and baby milk.

Also, the product placements are not allowed on children’s shows, news, current affairs, and religious shows. Apart from these restrictions, the shows who will be broadcasting different brands will have to prompt a 'P' logo at the start of the show to inform the viewers that what they are watching would have product placements in it. In my opinion, this is not a very good idea for the companies who have their products placed in the show. This will actually dilute the main motive of product placements i.e. advertising your brands without consciously informing the viewers.

In contrast, India has no specific regulations for product placement with respect to Indian television programs. Unless and until the channel is alright with the content, the companies can have their products placed in their shows. Indian markets are far more innovative and flexible as compared to the international markets as far as the regulations or restrictions are concerned.

Pros of Product Placement:

  • High probability of attracting new segments of customers
  • Improved/increased sales
  • Win-Win situation for both the broadcaster and the advertiser

Cons of Product Placement:

  • A bad product placement can destroy a show or film's plot
  • High risk for the advertiser in case the show or a movie is a big flop
  • Product placement of products like guns, cigarettes and alcohol can have

negative impact on the viewers

Future of Product Placement:

Even though product placements do not convert into significant increase in the sales of a product, they are becoming a popular means to reach to the consumers as every little bit helps nowadays. Use of TiVo (a digital video recorder developed and marketed by TiVo, Inc.) will further help in increasing product placement in movies and TV. One of the reasons for this increase might be the lack of harm in product placement. There is a possibility that the use of unintentional advertising images might cause a danger, but nevertheless the direct use of brands on TV is relatively harmless. Even though there is lot to explore in this field, if controlled and executed properly, product placement can prove to be an excellent tool.

This article has been authored by Varun Acharya & Garima Malik from SCMHRD.


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