Does Product Placement Work?

A handsome man looks at a carton of milk.Product placement, we’ve all seen it before. When we are watching one of our favorite movies or TV shows, and the character takes a moment to sip an ice cold coca-cola before carrying on with the scene. Product placement has a history of major successes. For example, the sales of Reese’s Pieces increased by 65% after the release of E.T. in 1982. That was the 1980’s, though! How does the effect of product placement work today? Well, advertisers currently spend $8.25 billion on product placements, and that number could be twice as much at the rate it is expected to grow over the next 5 or 6 years, so something must be working. Here is some information about the effect of product placement…

Traditional ad breaks are being skipped

The way that we indulge in digital entertainment is radically different than how audiences consumed television in previous decades. The model of ad breaks is quickly becoming irrelevant, as audiences now have a variety of ways to get around commercials, either through paying for online streaming services or by simply recording their shows and skipping the ads. This means that the bang for your buck that you get from a traditional commercial is getting circumvented by the very people that advertisers are trying to sell to. This explains the rise in spending on product placement, where the effect of the ad is literally intertwined with the content that people enjoy.

We want to be like the characters we watch

The basic idea behind product placement is that audiences want to be like the characters they love, or at least inhabit the same world that these characters do. For example, in the James Bond film Skyfall, Heineken paid the producers of the film $45 million for James Bond to drink a Heineken, rather than his typical vodka martini. The value on this might be hard to measure, but there is a certain prestige that comes with having James Bond put his lips on your drink, as he is a character that many people aspire to. This type of adoration can be utilized, for better or worse, by advertisers.

The rise of digital insertions

The industry behind product placements is growing so much, that the methods of product placement are beginning to expand, rapidly. Currently, we are seeing this with the rise of digital insertions, which is a process where advertisers can digitally insert their product into a piece of media in the post-production process. This allows certain advertisers to release films or shows with different products in them in different parts of the world, making the process much more localized.

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