Decoding Product Placement Costs: What Does It Really Cost?

But... What Does Product Placement Really Cost? 

We're always asked - "What should we budget?" That's the one question our agency can count on to hear at least once a day from a brand inquiry: How much does product placement integration cost? And quite frankly, that's a hard question to answer instantly without knowing more about the brand - and the specific partnership opportunity. It is not like there is a schedule out there even similar to a network's media rate card that defines cost A, B or C. And so many variables have to be considered, making each brand's inquiry completely unique.

And there is no way to compare apples to oranges regarding content partnerships - because each is unique in its content creator team, distributor limitations, cast allowances, and storyline. But I'm willing to give it a shot! In this blog, Hollywood Branded will dive into the complexities of product placement costs and shed light on what drives them.

It's Not An Easy Answer

When you get a call from a telemarketer or speak with a SAAS software, they typically sell a service or package deal with set pricing. Everyone gets packages 1, 2 or 3. There is no customization; if there is, it is an up-sell program that has been packaged together. Regardless of who you are, what company you work for, or typically even how big your company is, a fairly set program is outlined for you.

This is far different when it comes to selling product placement integration. There are so many factors to build in and in reality, no set rules. The highest bidder is typically the winner of the placement, but not always.  

Our team has often seen the biggest dollar offer brushed aside because another brand was just a little closer to the final decision maker's heart and that is often based on familiarity with the brand or the brand is able to offer something plussed up in trade, quantity, or a co-branded marketing campaign.

But often a brand that offers nothing but a product on loan in exchange for the exposure can get even more all-star exposure than their biggest competitor, all because of the storyline, relevancy, and need by production.

What Can Drive The Cost Of Product Placement

There are a variety of different things that impact and drive costs, which include whether the production property is:  

• A TV show on cable versus network versus SVOD, along with which network or distributor platform. Or is it a film, music video, or... some other type of content? 
• An A-list cast or production team versus emerging talent. Who is the director - and what other big names are associated with the production that helps drive the cost? The bigger the names, the bigger the costs. 
• A tentpole theatrical release for the studio, a straight-to-streamer, or an indie. The films at the heart of the studio's moneymaking will require a lot more support from a brand than smaller productions. Franchise films are going to require the most money of all. 
• A franchise hit with an established audience based on a well-known book or something new that no one has heard of. 
• How big a placement opportunity will it be and is it a hands-on, verbal, or background shot?
• Perhaps the biggest driver - does anyone else want it? If the brand category or opportunity is so great and applicable to other brands too, competitive the price goes up. 

Is Your Brand Known & Top Of Mind

I can't make a big enough deal out of how very important it is for the on-set decision makers to know your brand. Before you ever make a big ticket offer.

So many brands miss the magic of product placement of having an active program always 'on' on Hollywood, where relationships and familiarity drive the creation of or a natural fit of an opportunity organically versus an open pocket book trying to chase an opportunity down. If the decision maker didn't grow up with your brand, and it's not part of their daily life, you need to start making it be. This is particularly true for international brands who have no presence in the US.

You want the decision maker to think the partnership is a fit. And not have to climb a mountain trying to sell it in as one.

So now to get to the heart of the matter...the costs.

A Product Placement Program Vs. A One Off

If a brand is SERIOUS about product placement, then they should consider (very seriously) working with a product placement agency that can create a footprint in Hollywood that is not just about on-screen exposures, but relationship and brand familiarity building. 

When as a brand you go to a content creator, and you are an unknown, the price tag you will be paying is higher than that which can be unearthed by vigilant product placement agents. The agency costs more than pays for itself in the long run, plus you get exposure in content where it is just impossible to purchase exposure in.

A product placement agency will educate the production and have them keep your brand top of mind - and make the production WANT to work with you more than they would if you were just offering one-hit wonder dollars here and there.

This is, as we like to say, where the magic happens!!

Having a proactive product placement program that is always on the lookout for opportunities allows large featured roles to be negotiated at lower rates.And if you go in this direction, for gosh sake, don't limit your brand exposure opportunities only to TV or film. Embrace them all! Product placement is a numbers game, but the product you provide can be used over and over and over and over again. And if lost, send a bill to the production that lost it. Unless of course they made your brand a star along the way, and the relationship is worth gifting whatever the item was.

Pricing of course depends on the agency, but most established reputable agencies will quote between $60k to $350k+ for a yearly program for a brand and more for a brand with multiple product categories or higher hands-on needs for training or logistics. Some brand categories require higher dollars - based on staffing and storage needs. A car company for example is going to be on the higher end. A packaged foods company that only sells chips on the lower end. And with that cost, additional monies should be allocated to those awesome opportunities that require cash along the way.

Really now, wouldn't you like to be able to secure some mega deals in trade versus just paying cold hard cash?

So when it comes to one-off opportunities, which to us means partnering with a single entity and putting ALL of your eggs into that one basket... keep reading to learn about the price investment. 

Television & SVOD 

Let's take a look at the different levels of pricing by types of TV content - and network:

• Network TV pricing is driven by the distribution platform and content type. Network TV like ABC, CBS, CW, NBC, and Fox, as well as network-owned cable stations like A&E, FX and USA are centrally built around an advertising model. Primetime scripted content is the key moneymaker, as these shows usually have higher audiences. Night-time talk shows also command a considerable price tag. In the scripted world on broadcast network TV, a brand is unlikely to be able to negotiate a product placement deal unless there is a $500k - $1 million PLUS ad buy in a place that "allows" the placement to be leveraged. Not as added value - but at an additional cost, often ranging up to the low six and sometimes well into the 7 figure mark. But take note! Relationships that your product placement agency has with the on-set production might still be able to get you a role on the show with no dollars paid out. It all comes down to the brand category, the network, the show itself, the relationship, and the opportunity - and knowing there is a need. You'll also hear about lower-fee opportunities for integrations that may pop up at the last minute as the general brand category was scripted, opening up often lower cost options. And that is worth the retainer cost of a product placement program all on its own. (Plus there are so many other valuable additions offered...)
• Reality TV (including daytime talk) programming is a different beast altogether. For brands that aren't national advertisers, this is an area where tremendous partnerships can be built out - a little more realistically. Reality shows offer starting fees of around $50k and up to 7 figures depending on the production, time slot and popularity of the show. But more can be negotiated here in terms of brand messaging and demonstration. Reality is just a little easier to create that big partnership with. Reality TV on cable and more niche networks may offer brand partnership options at even lower fees. These are also the shows where brands can leverage social media more than scripted network programming. Your primetime network reality shows will have higher associated costs, where a budget needs to be mid-six to low 7 figures for a large partnership. A $250k to $500k budget may provide a very robust program dependent on the distribution platform for shows that aren't necessarily the apple of the platform's eye.
• Subscription Cable TV networks that are entirely subscription-based like HBO, Showtime, and Starz are entirely funded by subscribers. There is some obvious evolution going on here right now with the streaming consolidations and mergers. With these networks, there are no standard advertising media buy options. But each network treats product placement a little differently. HBO as example will typically not take fees for product placement. They are also very choosy about whether a brand can co-promote programming, with rare exceptions. It's against (or at least historically has been) the network's nature although times are a'changing. But the shows you watch are chock full of brands - all orchestrated through trade or loan of product, and typically by product placement agencies. Showtime is often open to take dollars for brand integration deals - and will also allow branded co-promotions of the brand's media and retail. Fees here can range from the mid-5 figures to mid-6 figures - or possibly even higher based on the deal.  
• Streaming Video On Demand (SVOD) operates similarly to cable TV networks, with some platforms being ad free, and others like Netflix just figuring out their advertising offers. For many brands, there are no options to pay for exposure, and product placement trade is the only potential opportunity to be featured as trade or loan of product can seriously help offset bottom dollar production costs. Costs can range anywhere from $50k to $1M+ - even into high seven (or eight) figures for the largest of partnerships or production company strategic alignments. Yes. That much. 

Feature Films

Until recent years, feature films have traditionally had lower dollar investment than television for brand involvement - with a high majority of product placement driven by trade and loan of goods through product placement agencies. TV networks have the mindset that their content is able to be monetized based on their ad sales department advertising deals. There is no such entity at a studio. However - Covid and industry strikes have changed that as filmmaking has become more expensive. The mighty dollar is being seen as attainable by these filmmakers - more so than in years past, and at higher investment levels.  

Producers and Directors understand the value of their content and are increasingly seeking large partnerships that include a mid-six to seven-figure paid partnership. It makes sense, as tens of millions of people see the largest of films worldwide. For the next decade - or longer. We're seeing studios present opportunities that even five years ago would have been no-brainers of getting closed, but the industry has changed, and the competition for the biggest on-screen moments is higher. You also have content creators who don't want to 'sully' their content with brands or be held to a contract to incorporate the brand within filming - so they just say no to partnership options.

Historically, brands have leveraged "big" deals by:

1. Either significant trade-out (think pallets of water provided to cast and crew) or flights on an airline or hotel room nights for production.
2. Promotional partnerships in which the brand's media buy is co-branded or their in-store retail point of sale also advertises their partnership with the film.

This is still a strong marketing practice - and the route brands should always approach from if it makes sense for their category.  A problem exists with films that require big dollar payouts, as brands often ask for more on-screen time and functionality featured than the creative content team is open to providing. And with the big-ticket blockbuster films already budgeted in the $250+ million range, dollar offers can matte less to the content creator or the studio at the end of the day. A co-promotion valued at $5 million + may get more love from the studio than an offer cash alone - especially if that promotion is in North America and will help drive downloads or box office attendance.

Also, buyer beware - and be prepared - there are no guarantees until the final edit. We've had big wins and losses - all thanks to the director's decision to make a scene so dark you can't see the brand or a last-minute editing choice to cut a scene. And while the dollars are always refundable, it's tough to get an entire company onboard for a partnership and excited and then have the deal die based on a film cut, after sometimes of a year plus of working on it. It happens, unfortunately, and it's something brands have to be aware of and manage internal expectations. Your agency has no control over it, nor will you and it is a risk of this marketing strategy. Brands DO have major wins however more often than naught.

Who remembers seeing Subway in the movie, Happy Gilmore? 

Video Credit: Youtube / Justin Wiggins

Music Videos

Music videos are a MECCA for brand integration deals. It absolutely stuns our agency that more brands aren't taking advantage of music video integration deals. For one, they are very affordable.  A brand can be featured in a music video for under $150k - and sometimes as low as $15k to $30k depending on the artist's popularity or the music genre.  $50k is often a sweet spot for starting fees for established artists (without agency fees built in.)  $250k  to $500k+ may be the requested fee for a MASSIVE artist integration. But the placement partnership doesn't end there.

Music Videos offer brands the ability to start slowly working with an artist and building a relationship that may result in a major celebrity endorsement deal with legs further on in the process.  Our agency LOVES music videos.  They are fast. They are as close as you get to 'turnkey'. They come with contracts that guarantee minimum seconds (good luck getting that with TV or Film - the networks won't guarantee seconds).  And the artists often have assets that can be provided to make the deal just a little bigger.

Here is a prime example with the iconic sensation Miley Cyrus and her song, We Can't Stop. Can you spot the Beats Bluetooth Pill?

Video Credit: VEVO / Miley Cyrus

Eager To Learn More?

When it comes to product placement costs, there's no one size fits all answer. So many variables can impact the cost of a brand’s Product Placement campaign. In order to give you an accurate estimate for your project, we need more information about what type of products and services your company provides as well as how they will be used in the content or programming (i.e., on-camera use vs background use). If you are interested in reading more about product placement, here are 5 additional blogs: 

• Hollywood Branded's Guide to Successful Product Placement
• 5 Steps For Brands To Stand Out On Instagram 
• The Benefits Of Licensing Entertainment Properties
• Driving Successful Marketing Efforts: An Insight into Product Placement and Brand Integration
• The Benefits and Strategies of Product Placement in Movies

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