What Is Product Placement Marketing Essay

Product placement is defined as the practice of inserting brands in the script of mediated news and entertainment programs, also referred to as brand placement or entertainment marketing. (Hackley, 2006).

Product Placements are considered to be a relatively new type of advertising when compared with the traditional methods. After comprehensive reading, it can be safely assumed that very few studies have been conducted in Pakistan regarding product placements. However this study focuses on the consumer recognition of products which are placed within the broadcast mediums in Pakistan.

This study signifies what type of product placements are recognized by the consumers which means that whether prominent product placements have a higher consumer recognition or does subtle product placements have a more significant recognition.

The study revolves around the work done by DLR van der Wald in 2005 and in 2007

Introduction

Moster (Moster et al, 2002) states that a product or a brand can be exposed to millions of customers at a single time through product placements via the broadcast mediums. Product placement is new type of marketing strategy which helps a product to communicate with its customers and a rapid growth can be witnessed by adapting this strategy. Marketers believe that if a product is used by famous celebrities or stars in a movie or a television show or if the product is endorsed by them, then the audience might be able to relate with the products on a more personal level through emotional persuasion. As stated by the MD of GroupM, Mr. Perwani, product placement is a relatively new and emerging phenomenon in Pakistan that has tons of growth potential

It has been specified by Russell (Russell, 2002) in his study that a product which is placed prominently in the screen plays a vital role in the recall and recognition of product placements especially in films since the total money which was spent on product placements during the year 2010 was more than US$14.5 billion (Morgan, 2011). With the advent of technological advancements and constant up-gradation of communication mediums, traditional advertising methodologies will become less impactful (Hornick, 2006). Product placement has its own advantages; the most essential ones being the deliverance of product message across a much wider domain; and greater endurance with low cost per exposure (Wiles & Danielova, 2006).

Recognition for products and brands can be considerably increased when viewers witness their placement not just on screens but also observe them in conversations (Berglund & Spets, 2003). Thus anticipation regarding products and brands can be increased through multiple sources for potential customers. Product placement is becoming an increasingly growing phenomenon in the marketing word. However, there is yet a lot to be explored regarding the subject and its validity (Gupta et al., 2000).

Products such as cigarettes and alcohol can be placed in the content of either the Film or the TV show which can give the viewer a more real experience of using the product. DeLorme & Reid (1999:2) in his study highlighted disadvantages of product placements which suggested that when it comes to traditional advertising, the marketers have full authority over every aspect of the communication while in the product placement process; the marketers have to depend upon the producers and directors or writers to include the product in their content or if the content portrays a negative unintentional message to the audience, then marketers will not be able to control the message and damage control would be difficult.

Problem Statement

It is very difficult to measure the effectiveness of content integration and till this date, not one universal method is used to measure the effectiveness of content integration. Lamb et al (2004) stated in his research that effectiveness of advertisements can only be measured by recognition. Various organizations use their own models to rationalize the effectiveness of content integration which is why we intend to bridge the gap by ascertaining the consumer recognition generated by product placements in the Broadcasted Programs of Pakistan.

There are both local and international programs which are broadcasted in Pakistan and there is no universal formula which calculates whether products which are placed in local programs have higher consumer recognition than those products which are placed in international TV shows and movies. Thus this research also revolves around which product placements have higher consumer recognition

This research is restricted to respondents residing in Karachi, Lahore and Islamabad and the limitations are further explained in the study.

Purpose of Study

Gupta et al (2000) stated that a few studies exist on product placements and the ones which are published often conflict with each other which results in unexplored issues and the need of further validation and generalization arises thus a need for further research on product placements exists which might be able to benefit the marketers globally as well as domestically.

Hence, the basic purpose of our study is to find out the consumer recognition for different brands which were used in product placements. Not a lot of researches have been conducted regarding product placements in Pakistan. Very little consumer reactions to product placements have been tested in Pakistan which used various different models.

Another reason why we are conducting this study is to find out whether product placements in the Pakistani broadcasted programs contribute to the brand recognition a customer/viewer has and whether he/she was able to recognize the branded product names placed in the programs.

Literature Review

Introduction

Moster (Moster et al, 2002) states that a product or a brand can be exposed to millions of customers at a single time through product placements via the broadcast mediums. Product placement is new type of marketing strategy which helps a product to communicate with its customers and a rapid growth can be witnessed by adapting this strategy. Marketers believe that if a product is used by famous celebrities or stars in a movie or a television show or if the product is endorsed by them, then the audience might be able to relate with the products on a more personal level through emotional persuasion. As stated by the MD of GroupM, Mr. Perwani, product placement is a relatively new and emerging phenomenon in Pakistan that has tons of growth potential.

It has been specified by Russell (Russell, 2002) in his study that a product which is placed prominently in the screen plays a vital role in the recall and recognition of product placements especially in films since the total money which was spent on product placements during the year 2010 was more than US$14.5 billion (Morgan, 2011). With the advent of technological advancements and constant up-gradation of communication mediums, traditional advertising methodologies will become less impactful (Hornick, 2006). Product placement has its own advantages; the most essential ones being the deliverance of product message across a much wider domain; and greater endurance with low cost per exposure (Wiles & Danielova, 2006).

Recognition for products and brands can be considerably increased when viewers witness their placement not just on screens but also observes them in conversations (Berglund & Spets, 2003). Thus anticipation regarding products and brands can be increased through multiple sources for potential customers. Product placement is becoming an increasingly growing phenomenon in the marketing word. However, there is yet a lot to be explored regarding the subject and its validity (Gupta et al., 2000).

What is Product Placement?

Product placement is defined as the practice of inserting brands in the script of mediated news and entertainment programs, also referred to as brand placement or entertainment marketing because of its transformation from films to television shows and radio broadcasts, books, songs, stage plays and computer games (Hackley, 2006).

Product placement is the practice in which firms tend to devote vast resources to place branded products (e.g. brand name/logo, package, signage, and other trademarks) in mass media programming (Graser, 2006). However, the paradox of product placement cannot be ignored. “If you notice it, it’s bad. But if you don’t notice, its worth- less,” (Ephron, 2003). In other words product placement comprises of an advertiser or company producing some appealing content in order to sell something (Falkow, 2010).

In integrated marketing and advertising product placement continues to grow in importance with advertisers pushing their way into content far more aggressively (Ewoldsen, 2007). As a marketing tool product placement has one main advantage, due to its captive audience the product that is being placed is viewed avoiding clutter (e.g. other advertisements) (Dunnett, 1996). Product placement as argued by many scholars was first practiced after the invention of motion pictures and the commercialization continued through the twentieth century (Newell, 2006).

Branded Entertainment and Product Placement: A common Phenomena

Branded entertainment involves embedding advertising inside the content of television, radio programs and movies by placing products in important scenes or making brands intrinsic elements of plot lines (Kramer, 2005).

FBC Media further elaborates this definition. Branded Entertainment is a means by which a brand can have a deeper relationship with a program property beyond traditional media activity. It is where a brand creates entertainment that would not have existed without that brand, and where consumers choose to be involved.

Product placement is defined as the intentional usage of a third party’s intellectual property right in any non-commercial communication space designed for entertainment that helps in establishing a trademark and also serves as a source of income for movies and television production (Bramm, 2007).

Through television programming and cross-platform extensions, brands are reaching consumers by association with the program’s values – where those values are specifically developed to be consistent with the values of the brand. Hence an optimal branded content would use entertainment as a gateway to consumer dialogue leading to engagement on multiple platforms and off air as well thus creating and using it as a social currency.

Branded programming play’s a significant supporting role for traditional advertising as long as the cost efficiency ratio is maintained. Product placement has evolved over the years and transformed into branded programs which has a lot more than only brand placement in the show i.e. brand essence, brand values, brand talkies. Hence, branded entertainment is about bringing a brand to life by providing entertainment and a feel of the brand to the target audience.

History of Product Placement

The history of product placement dates back to 1945 when it was first used as a tool of promotion. Joan Crawford, the actor sipped Jack Daniel’s whiskey prominently in the film Mildred Pierce (Reed, 1989). Later in the year, 1951, the producers of the film “The African Queen” were paid by the makers of Gordon’s Gin to have a brand of liquor placed in the film. In 1982 “E.T.” was used so skillfully to promote Reese’s Pieces candy, that sales of the product jumped by 65% during the month of release (Business week, 1998). After this huge success, brand placement in feature films became an essential part of consumer marketing (Reed, 1989).

Another success of product placement was witnessed in the year 1997 when Will Smith & Tommy Lee Jones wore Ray-Ban Predator 2 sunglasses in the movie called Men in Black, the sales of the Ray-Ban glasses tripled to almost $5 million according to the company. This proves that product placement indeed influence the sales of a brand (Basset, 2000).

Product placements in movies are nearly as old as cinema itself (Turner, 2003; Newell, 2004). It involves placing a product or a brand into the script of a film scene where it can be noticed by the viewers. In most cases, the placement is paid by the advertiser (Karrh, 1998). In 2002, Ford paid around 30-40 million dollars to position Aston Martin cars in the movie Die Another Day (2002). Conversely, Virgin Cola did not pay for the placement of its product in (La Boite, 2001) but instead, offered complimentary products to Claude Zidi, the director of the movie (Lehu, 2006).

The positive effect on attitude (Fontaine, 2005), behavior (Daugherty, 2005), and the density of impact on brand recall (Dubas, 1999; d’Astous, 2000) signifies the foundation of the research knowledge. Hence, today’s advertisers are exploring opportunities to represent their offerings to their target audience in the most constructive form, product placement seems to be appropriate (O’Reilly et al., 2005), and since it is cost effective as compared to a 30 second TVC (Jaffe, 2005), it is more commonly implemented.

Authors characterize product placement according to three categories; prominence, audio visual and plot placements. Prominent placement is defined as a placement in which the product is highly visible due to the size or position on the screen (Gupta, 1998). Audio visual is described by the appearance of the product on the screen or as the product being talked about in a dialogue (Russell, 2002) and plot placement is the extent to which the product is included in the story plot (Russell, 1998).

Product Placement in Movies and Television Programs

Product placements in movies are of two types: Creative & On-Set Placement. When the brand is placed into the screen in clever ways, it is considered to be creative. Zaie’s logo on a park bench in the movie “Back to the Future” is the perfect example of creative placement. Conversely, on-set placement is when the product is showed in a neutral situation, for example, Tide detergent being placed on top of the washing machine, in the movie Mr. Mom (Oliver, 1986).

Product placements can create strong loyalty and also affect style and trends for years after the film is released (Yorks, 1989).

One of the most important benefits associated with product placement is its lasting life and wide reach of the message with lesser cost per exposure. Product placement in films are mostly paid but hidden messages including the product name, the product itself or the firm’s name is aimed at the audience through product identifiers through audio or visual means of promotion (Balsubramanian, 1994).

An idea was stated by (Russell, 1998) to show how product placements are important in the context of the imaginative engagement of consumers with their favorite broadcasted programs and celebrities. The idea proposed that the experience of using/consuming a product can be changed with the help of product placement in films or television programs. When real products are placed in broadcasted programs or movies, the authenticity and salience of the brand is strengthened which increases empathy towards the product (Russell, 1998).

Product placement makes visual aspects of films more realistic and credible which greatly facilitates viewers’ memory (Russell, 2002). There are various ways to feature a product in films. The product can itself be displayed, its logo can be shown, or even an advertisement of the product can appear in the film (Smith, 1985).

Product placements which come under the integrated marketing communications strategies intensify the impact of overall communications done by the brand. It relates to the consumer on a more personal level which then enhances the chance of product recognition (Beard 1996).

Television programs and movies can be regarded as valuable projective function for consumers: audiences of television programs and movies enter into new worlds through dramatic entertainment which the video is providing. When brands are placed in this fantasy world, consumers are able to connect with them (Hirschman, 1982). A few essential reasons why marketers starting focusing on developing innovative placement techniques were: advertisement clutter produced by television commercials as a consequence of greater time allocated to advertisements with lesser durations per commercial; and inability to defragment audiences because of increasing number of television channels (Gupta, 1998).

Significance of Product Placement in comparison with Advertising

In an interview with Jean-Marc Lehu (Jean, 2007), he highlighted the fact that the viewer ship of a prime-time 30 second commercial is declining each day and the audience profiles are even more difficult to predict. In 2007, two major players in the FMCG sector namely Procter & Gamble and Unilever opted out of airing commercials during the February Superbowl in Florida- a mega event hosted in US. Due to the wide spread of entertainment, managers have adapted an attractive strategy known as branded entertainment. Product placement provides an opportunity to deliver the message of the brand; at times the audience not being aware of the intention of the advertiser. In comparison with advertising budgets, product placement is cost effective.

Product placement proves to be a very important marketing tool, which in turn is used to compliment various other marketing and advertising tools. It helps marketers to emphasize and strengthen brand awareness. Product placement can be further distinguished into Real placements and Virtual placements. The former requires the participation of film actors and actresses and are essentially associated with film production. The latter utilizes digital technology using an audio – visual segment processes (Balasubramanian, 1994).

According to Beglund (2003), product and brand placements on television and in conversations increase the probability of greater product and brand recognition, which in turn results in customers absorbing more information from various sources. Product placement is increasingly gaining popularity in the marketing world. However, it still requires comprehensive product related research. Therefore a number of issues remain unclear which require exploration and further validation (Gupta et al, 2000).

The nature of product placements in media recognition depends significantly on subjectivity (D’Astous, 2000). Brand recognition by the customer can be increased by using an effective marketing and communication tool (Beglund, 2003). To measure the effectiveness of advertising, recognition tests are commonly used.

Product placement is remarkably replacing traditional marketing tools and strategies based on its ability to communicate product message across potential customers over much wider domains. Where traditional marketing tools failed to do so as a result of increasing advertisement clutter, product placement has proven to be an effective alternative to such approaches (D’Astrous, 2000).

Product placements have given marketing communication tools a new approach which is more flexible, efficient, feasible and innovative. The systematic mechanism of communications is to reach out to the target audience and remind them about a certain product or service in the market. Product placement informs and reminds the consumer about a particular product or service made by a specific brand (Eagle et al, 2000).

Consumers often prefer product placement to advertising because the attitude towards product placement is generally more positive than advertising or television commercials (Nebenzahl,1993).

Realism in television programs and movies is increased through product placement since it involves consumers on a more personal basis if compared with advertising because product placement is mostly discreet when compared with other tools of marketing (Gupta, 2000, d‟Astous, 1999; Karrh, 1998). The industry of advertising classifies product placements into three categories. First category includes a logo, brand or brand name being seen in the background or the character holding the brand. Second category is when the character uses the brand while the third category involves the character voicing the brands name (Kinsley, 1990).

The messages communicated through product placements diverge from the conventional tools of marketing communication since they are incorporated into the content. These communication messages tend to be more subtle which makes them more realistic rather than advertising. Also, messages communicated through product placements are less pressurized than those communicated through advertising (Grigorovici, 2004; Karrh, 2006; Meenaghan, 2001). Due to brand placements, transformational advertising which involves the experience of using/consuming the brand might occur. This type of advertising makes the use of brand much more enjoyable if compared with a conventional television commercial. Consumers can always relate to this type of advertising and recalling the brand through the experience generated by the placement is always better (Puto, 1984).

Psychologist in their experiments found that the individuals organized their incoming information into a coherent pattern designed to aid retrieval which resulted in individuals recalling information in terms of categories or clusters meaning product categories would recall more easily than specific brands (Bousfield, 1953).

Product Placement: A Global Perspective

Over the years, the utility of product placements has received substantial importance in Africa (Van, 2005; Du Toit, 2004; Du Preez, 2004; Nunes 2004).

According to a study on politics of product placement in the European Union (Haifa, 2008) technological advancements and extensive competition commercially such as Multi channel TV and Internet broadcasting are remarkably changing the advertisement market globally.

For commercial broadcasters Product Placement has become the main source of revenue instead of spot placements. Product placement is a tool whose sole objective is to promote a service or a product with the main commercial message enclosed within. The reality, which rivals commercial media, is supplemented by a decrease in popularity of traditional television e.g. “spot ads”. In spot ads advertisements are broadcasted in a separate closely monitored environment.

Four major forces that are instigating change now challenge these arrangements. Firstly the creation of a digital revolution introducing hundreds of TV channels into viewer’s homes leading to the creation of a fragmented audience divided amongst many niche channels, therefore making it very hard to target the audience with a same spot advertisement (Russell, 2005; Tiwsakul, 2005). Secondly new recording machines makes skipping advertising spots possible (Schejter, 2007; Wenner, 2004). Thirdly the Internet serves as a medium for advertising that attracts advertiser’s attention and budgets and lastly the rising cost of advertisements proves to be a major concern for advertisers (Avery, 2000), However the threat of undue influence remains.

Product Placement: A Deceptive Tool or a Modern Advertising Technique?

Product placements create and increase brand awareness but no association has been found yet that it also influences the brand attitude. Product placement might influence the brand category of which product to use if the consumer has a category need (Babin & Carder 1996, 150; Brennan et al. 1999, 334).

Since the message is hidden the viewer’s find it hard to distinguish between commercial and editorial content therefore product placement is referred to as a hybrid message (Balasubramanian, 1994) and it is claimed to raise a question of deception (Avery, 2000). Product placement is a selected message aimed at misleading the audience about their control over content Schejter. The audience is usually mislead about the intent of the placement this matter is however raised in two public concerns firstly minor protection because the placement is not clearly identified as an advertisement and secondly to protects the audience against harmful to health content (Baerms, 2003; Wenner, 2004).

According to Al Ries and Laura Ries, traditional advertising has lost its credibility (Ries, 2004) as the traditional advertising is mere distraction for the viewers and consumers and hence, don’t want to watch the ads. Sergio Zyman claims that the marketing and advertising tactics have changed drastically from the past and Joseph Jaffe further explains why the traditional 30-second spot is not very significant which leads to the advent of non-conventional advertising techniques that is product placements. The non-conventional ways will be more engaging and involving than a traditional ad which is thirty seconds. The non-conventional ways could be any and everything beyond a 30 seconds spot (Jaffe, 2005).

Product placement provides an extra mileage to the brand and added exposure with the traditional advertising. Product placement is there on screen and therefore in the minds of the consumer without distraction. It’s something which can’t be avoided while watching a specific program. In the United States alone, the number of product placements on television increased by 30 per cent in 2005, to reach 108,261, according to Nielsen Media Research. It is for such ratings that firms spent more than US$14.5 billion on product placements during 2010 (Spurlock, 2012).

Mehr Sultan stated in her thesis that, even in Pakistan “in-program” exposure is a lot more valuable to advertisers than mid break spots and break bumpers. For example in Lemon Max Bar’s case an animated logo placement in a show on PTV Home, called Baharaai. The GRPs attained during the show by onscreen animation consisted of 13% of the overall GRPs attained from exposures (Medialogic, 2009). The on screen animations or scrolls are a must see since they are shown during the program, whereas exposures during mid-break do not guarantee complete viewer ship as the attention span during mid-breaks declines (Mehr, 2009).

Practitioners see product placement is a cost effective and precise way to communicate your brand’s message to the specific target audiences and market segments (McKechnie, 2003).

What is the logic behind product placement, and what makes it work. The basic idea behind modern advertising persuasion is that if you want to sell your product, then you want to have social leaders be seen using it. Thus, selling soft drinks to teenagers, you might tailor your advertising to the leaders among the “mooks” and “midriffs” mentioned in the Frontline documentary “The Merchants of Cool” (Goodman, 2001).

You might use Led Zeppelin’s music to lend an air of excitement to a Cadillac that only the most successful consumers can afford to buy, because most peak earners today were in their teens during Led Zeppelin’s heyday 3 decades ago. Product placement puts things into hands of leaders (Bovard, 2005). If we look at the local scenario in Pakistan, Zubaida Tariq endorsed P&G’s leading product Ariel. Pakistani housewives look up to her in various aspects of life.

Branded shows have one considerable advantage: their length, which the ‘infomercial’ sought to re-establish in the late 1980s. In the case of a sponsored show, it is possible to escape the straitjacket of the 30-second advertising spot. Not only are these few seconds of screen time expensive, but also it is sometimes difficult to make the consumer understand how a product is used, or what its benefits are, in such a short space of time. Customer awareness and brand attitudes can be increased by product placement as supported by ample evidences (D’Astous, 2000; Gupta, 1998).

For technological goods, product placement offers the following advantage:

1. During a film or a television series, it is possible to place a product in the hands of a character and show explicitly how it is used.

2. For both a series and a film, it is also advantageous to be able to use the latest fashionable gadget or to benefit from the latest technological advances, sometimes even before the product has gone on sale, as was the case with the very latest Nokia mobile phone used in David R Ellis’s film Cellular; or with the telephonic video security systems designed and built by Cisco and visible in the television series.

Another advantage of product placement is that, to date, it cannot be avoided and it is visible in almost all the possible shots.

DeLorme (1999), Blech (2001), and Fill (2002) emphasized various benefits associated with product placements, most essential ones being: product acknowledgement; and life span as well as frequency of the film placement. Celebrities using specific products in films have a greater impact on viewers which subsequently increases product acknowledgement.

Classifying products into various categories, utilization of a product itself, or associating the product visually with films may strongly influence the recall factor for such products (Dodd, 2000). Other advantages of product placements are: it increases familiarity and salience of the product; and increases product awareness (Aaker, 1996).

Product Placement and Ethics

According to the study (Hackley, 2008), it has been determined that the potential for an ethical regulation of product placement depends on two major components: (1) the degree to which producers, media agencies and brands make their product placement strategies explicit to the target audience, and (2) the level of commercial complexity, which regulator attribute to non-expert entertainment viewers.

One of the key concerns of product placement is that consumers believe it to be a subliminal or subconscious promotional effect (Gupta, 1997; Morton 2002). Another criticism that follow considers product placement as a deceptive practice since it convinces people to make purchase decisions based on influencing factors involved in the process (DeLorme,1999). Also, objections on ethical principles of product placement as an implied promotional tool have been voiced regarding specific categories. Children are seen as a primarily vulnerable segment when it comes to product placement mainly because they do not possess the ability to understand the intensity of such subtle promotional technique (Avery, 2000). Despite the fact that children below the age of 10 years are not fully responsive towards the commercial motive of conventional advertising, their recall initiates as soon as conscious awareness occurs (Gupta, 2000).

Product placements for products that have an adverse perception or an ethical charge, fail to deliver a constructive message regardless of how positive the emotion in the content is. Consumers tend to ignore placements of such products which results in the cancellation of a positive transformation of product perception (Gould et al 2000).

On the basis of various studies, PQ Media agency calculated that for the United States, investments in product placement in the media had risen from US$190 million in 1974, to US$512 million in 1985 to US$1.130 billion in 1994 and it reached US$3.458 billion in 2004.

Cinema’s share decreased due to the explosion of placement opportunities on television because of continuous growth in reality TV shows. Expenditure on product placements for media other than films and television was estimated at US$384.9 million in 2005 (or an increase of 18.1 % over 2004). Based on an annual growth rate fixed at 14.9%, the projections of the experts at PQ Media foresaw that expenditure on product placement in all media in 2009 would be US$6.94 billion. Among the leading sectors, analysts believe that transport and accessories, clothing and acce