The Realities of Paid Product Placement Today


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We've always challenged the reported high spend on paid product placement by media.  Unfortunately, that has led many producers to believe that their golden chalice to fund their production will be a major brand integration deal.  And many TV execs believe every brand should come with dollars attached. 

Those perceptions are incorrect, and both have caused some changes within the overall industry – and in some instances, driven brands away to other platforms than traditional network TV.  In this blog post, we take a look at Nielsen's recent research and provide insight as to what ways this marketing practice is actually growing.

What Nielsen Reported

Both MediaPost and Wall Street Journal covered a Nielsen report that stated prime-time non-sports branded entertainment/product placement/brand integration partnerships are on the decline - in part due to premium pricing.   See our response to this in the article on the subject of BrandChannel. 

The report goes on to say that last TV season there were 136 brands airing 4,455 integrations in programs, which is a 20% decline from the 2012-2013 TV season, when 185 brands did 5,580 integrations.

Nielsen also reported that brand marketers see "key marketing metric gains" by adding an ad spot to a branded placement.   Chad Dreas, managing director of media analytics for Nielsen, stated: “While there has been a decrease in both brands and occurrences in regards to branded integrations, it is still a great opportunity for marketers looking to increase their advertising impact.”

Here are the stats:

  • Among young adults 18-34, brand memorability for ads increased 16%
  • While among older adults 18-49, brand memorability gained 18%
  • Men respond more strongly to in-program product placements paired with standard TV commercials -- a 26% rise in brand recall versus 9% for women
  • For viewers 18-49 the practice improved advertising memorability by 5%; message memorability by 19%, and likability by 17%

The study came from survey responses related to network TV's originally airing programs.  


Why Product Placement Is Here To Stay

Most product placements seen in TV and film still, to this day, are based on trade and loan of goods versus dollars.  That is not to say that there are deals being made to more highly emphasize and lock in guarantees around brand usage on screen – there are, and as an agency, we actually do see those on the rise.  The reality is this is an old industry practice that isn’t going away, and the direct number one reason for that is that the cost of production runs very high, and product placement and brand partnerships reduce lower-line budgets. Here are three reasons why productions use product placement.


What We See Happening Today

What we are seeing as an agency are more opportunities for brand partnerships on more platforms, and whether that be trade and loan of product, or fees, there is a limit of product and cash to go around.  Even a decade ago, one of our brand clients may have judged a show’s opportunity by overall reach and only wanted to work with network television which at the time guaranteed the largest footprint.  Today, we often take a more specific look at the niche reach and relevancy of the brand.  As SVOD and digital opportunities become more abundant, the pool of properties one can work with becomes gigantic.  We also look to work with productions and individuals who really “get it” and are willing to become a true partner to the brand, versus just holding a hand out to collect dollars.

We are also seeing a tremendous rise in the number of brands across a very wide category mix prepared to come to the table with dedicated dollars to spend on product placement and celebrity campaigns. We have multiple conversations literally every day with new brands looking for the right opportunity to partner with.

You can read this article to learn more about the history of product placement.

National Advertisers

For brands that do national TV advertising, the main networks have locked down on opportunities with their productions without a multi-million ad buy commitment attached.  Even when brands themselves have an interest in exploring opportunities, the networks are requesting that they deal directly with their media agencies to go through a vetting process to ensure that the ad dollar allocation is there before having conversations.  This is literally closing the door to brands who prefer to reverse engineer, have dollars, are interested in overall ideas, and may then choose to grow the idea with ad dollars attached.  So down go the numbers seen on network TV of product placement.  And we can’t tell you how many brands we have worked with that prefer to look at the opportunity first, build legs around it on and off screen, and then add additional advertising dollars to the equation to further support.  There are certain networks we will call to discuss what we and our brand client think may be a brilliant idea, and the conversation is immediately shut down based on, “Let us have the network ad team assigned to that brand’s agency do a cost basis history of ad spending and then we will see if we can talk”.  It happens frequently.

Brands Who Have No TV Spend 

For brands that don’t do national TV advertising, it can either open doors for awesome deals to be constructed or have the door slammed in your face.  Some networks don’t want to “upset” their advertising brand partners who purchase on their network by allowing non or low-advertising partners to be integrated into content through placement or storyline.  And the door is shut – until we go through the backdoor and work directly with props, sets, transportation, or wardrobes who are desperately trying to control their production budgets and want trade opportunities.

Here are 5 ways we work with brands to get around the "I don't have enough money" issue.

In other instances, we find that some networks are slowly realizing low dollars are better than no dollars, and as long as the brand category does not offer heavy competition from other potential ad buyers, reasonable fee-based integration deals can be constructed – without required media buys.  Or if there is a requirement, a redirection to digital where a program can be put in place to lead back to a campaign or microsite developed around the on-screen brand partnership.

What Brands Want On Screen 

Today's brand marketers are smart and they want their every dollar to count – and they also want to make a big bang happen while doing so that will get higher attention and can have legs built taking it from on-screen to continue to live through digital, retail, and social.  Many brands think product placement costs are high, but this article provides insight that adjusts that perception. 

So How Does Product Placement Work? 

Have you ever wondered how a comprehensive product placement program works? Or do you want to know how to create a promotional partnership strategy with a movie partner? Watch this video which will answer your questions as it shows the steps and processes taken by Hollywood Branded that lead to your brand increasing both consumer engagement and sales!

How Product Placement Works Video