The Hidden Value of Product Placement

Stacy Jones | May 18, 2024 at 10:00 AM

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From Screens to Sales

As a business owner, I understand that every investment must be scrutinized for effectiveness because every dollar spent is crucial. For our clients who manage millions to hundreds of millions of advertising budgets, ineffectively applying those funds has the potential for real-world job loss across their company or the opportunity for massive growth. That's a lot of responsibility for a marketer to bear.

In the world of marketing, discovering strategies that promise enduring returns and decreasing cost-per-impression (CPM) rates is like striking gold, and one such goldmine is product placement in movies and TV. In this article, Hollywood Branded provides an exclusive look into the effectiveness of product placement in movies and TV series as a marketing strategy, highlighting its benefits, success stories, and cost-efficiency.

The Hidden Value of Product Placement Photo Credit: Business Insider

Why Product Placement Is A Game Changer

One of the most common inquiries I receive is: What makes product placement so effective in driving sales? This question is typically followed by a request for specific examples of how product placement has tangibly benefited brands.

Product placement is effective because it embeds your brand within the content consumers are already engaged with, subtly weaving the idea and image of your brand into the storyline. This repeated exposure, much like traditional advertising, enhances brand awareness and familiarity. Over time, as viewers repeatedly encounter your brand in different contexts—whether visually or audibly—it becomes top-of-mind. When it comes time for them to make a purchasing decision, these accumulated impressions can significantly influence consumer behavior, leading directly to sales.

Product placement allows your brand to benefit from the emotional connections viewers develop with characters and stories. When a beloved character uses your product, it can transfer celebrity appeal to your brand, enhancing consumer perception through association. This method of advertising is uniquely powerful because it leverages narrative context to showcase your product in action, demonstrating its use in real-life scenarios that resonate with audiences on an emotional level. This not only increases the likelihood of recall at the point of purchase but can also elevate the perceived value and desirability of the product.

Friends Product Placement

Photo Credit: The Telegraph

It's Affordable As Far As Advertising Goes

Product placement offers incredible value and efficiency, which is why its among the most cost-effective marketing strategies globally. Unlike many other advertising tactics, where costs may increase over time, product placement stands out because your investment diminishes as the content continues to reach new audiences—approaching the magical cost-per-impression (CPM) of 'almost nothing.'

When your brand is featured in a film or series, it stays there indefinitely. Or at least, it does right now. The initial airing of a show or movie captures the first wave of viewers, but the real value comes from prolonged exposure: reruns, on-demand views, international screenings, and more. For example, series that exceed four seasons often enter off-network syndication, re-airing globally for years. This extended life cycle also applies to films that, post-theatrical release, can be seen via streaming, on airlines, in hotels, and more. Evergreen content, especially popular holiday movies like Harry Potter, sees viewership spike annually.

This permanence as an opportunity for advertisers is crucial in a time before the widespread use of digital alterations that can add or remove product placements post-production—a future possibility but not yet a current standard. Today, digital placements are largely experimental and typically limited to specific programming due to rights and endorsement issues.

This may change in the future as new technologies allow easy swap-out of products seen in the foreground or background of a scene. Legal contracts limit the ability to just swap out content on screen. Everyone from the director, the designer, and even the celebrity seen on screen in that moment had a say in allowing a brand to grace the screen in that particular scene. It's not a common practice - yet - to be able to change the creative content that was originally produced in Hollywood's biggest blockbusters due to legal protections where too many people would need to approve it and be cut into the deal.

Waynes World Product Placement Photo Credit: Campaign US

Continuous Exposure, Compounding Returns

Shows and films frequently amass far greater audiences over time compared to their initial broadcasts. A series attracting under 2 million viewers initially upon its first airing can reach hundreds of millions over its lifetime through various platforms. The return on investment (ROI) for product placement can be staggering when considering the global audience reach over many years.

For instance, holiday movies starring top-tier talent are almost guaranteed to become cultural staples, replayed annually. The longevity of these placements means your brand continues to be seen year after year without additional investment, driving down the cost-per-impression each time it airs.

Incredible Cost Efficiency Over Time

Comprehensive product placement strategies executed by specialist agencies like Hollywood Branded can cost less than running a few traditional ads, yet the cumulative reach can be exponentially greater. Consider reallocating funds from a single ad to a product placement strategy and you might capture hundreds of millions of views for the same investment. This approach not only maximizes reach but also enhances brand prestige through association with popular content and beloved characters.

Here are several case studies highlighting the effectiveness of our product placement strategies:

BlackBerry: Over 6.5 billion first-run impressions with a CPM of $0.18.
Canadian Club: Revitalized the brand with a 4.7% annual growth after 17 years of decline.
Bumble on Riverdale: Generated 115% more fan engagement with a CPM under $3.
FLIR: Featured in over 220 million yearly impressions for six years, averaging a $0.32 CPM.

Bumble Product Placement Photo Credit: X/Twitter

Building Global Brand Awareness

Whether you aim to focus on domestic markets or anticipate future international expansion, product placements allow you to establish and expand brand awareness globally. Our strategies are designed not only to suit current market positions but also to anticipate and support future growth, ensuring that when you're ready to take your brand worldwide, the groundwork has already been laid.

Product placement is not just about visibility; it’s about embedding your brand into narratives that resonate deeply with audiences, making your product a recurring character in the stories people love. This deep integration is why product placement remains a uniquely powerful tool in the marketing arsenal, capable of delivering not just immediate results but prolonged benefits at a cost that becomes increasingly attractive over time.

Stats + Metrics Of Measurable Product Placement Impact

The fact is, product placement works. It is proven to increase brand awareness, drive sales, generate a high ROI, engage audiences, and improve brand perception. Let's dive into some studies and success stories.

Brand Recall and Recognition: Studies show that product placements significantly increase brand recall and recognition among viewers. A study by Millward Brown found that product placements can increase brand awareness by up to 20%.

Sales Impact: Product placements have a direct impact on sales. Exactly how much? Enough that you don't want to be missing out.

A study by Harvard Business School found that prominent product placements in movies can increase sales by up to 47%.
Another study by Advertising Age found that successful product placements can boost sales by up to 30%.
A study by Concave Brand Tracking found that 63% of viewers were more inclined to purchase a product after seeing it placed in a TV show or movie.

Return on Investment (ROI): Product placements offer a high ROI compared to traditional advertising. A study by PQ Media found that for every $1 spent on product placement, brands can generate up to $8.23 in return.

Audience Engagement: Product placements are more engaging than traditional ads. A study by Nielsen found that viewers are 88% more likely to remember a product placement than a traditional ad.

A study found that 63% of consumers reported feeling positive emotions like happiness, inspiration, and curiosity after seeing a product placement in a TV show or movie.
46% of consumers said they learned about a new product for the first time after seeing it placed in a TV show or movie.
A Nielsen study found that well over one-third of gamers actually bought, talked about or sought information after seeing an in-game ad.

Positive Brand Perception: Product placements can improve brand perception and favorability. A study by Ipsos found that 59% of viewers have a more positive perception of brands that are integrated into their favorite shows. Research by BenLabs showcases the power of product placement as an effective marketing strategy for brands to increase awareness, influence consumer perceptions, and drive sales.

63% of consumers reported feeling positive emotions (happiness, inspiration, interest, curiosity) after seeing a product or brand in a film or TV program. This suggests product placement can create favorable brand associations.
75% of consumers have searched for a product/brand online after seeing it in a TV show or film, and 57% of those consumers went on to purchase the same product or a different product from that brand. This demonstrates the potential of product placement to drive research interest and sales.
46% of consumers learned about a product for the first time after seeing it placed in TV or movies. Product placement can be effective for building initial brand awareness.
86% of U.S. marketers who have tried product placement rate it highly, and 81% consider it an effective marketing channel. Marketers view product placement favorably compared to traditional advertising methods.
57% of those consumers who searched for the product went on to purchase the same product or a different product from that brand.

Notable Success Stories You've Seen on Screen

Photo Credit: CBC

Eyewear

Ray-Ban in Top Gun (1986) - When Tom Cruise appeared as Maverick sporting Ray-Ban Aviators, it not only defined his character but resurrected the brand’s cool factor. Sales reportedly soared by 40% in the 7 months following the film's release.
Ray-Ban Wayfarers in Risky Business (1983): The film catalyzed a dramatic increase in sales from 18,000 pairs in 1981 to 360,000 in 1983, saving the sunglasses from discontinuation. By 1986, sales reached 1.5 million pairs.
Oliver Peoples in Fight Club: This eyewear brand made nearly $900,000 in 1999 and a total of just under $16 million to date from its product placement in Fight Club.

Automotive

Porsche in Risky Business (1983): Although there are no specific sales figures, the film's inclusion of Porsche's tagline "There is no substitute" likely enhanced the brand's image.
BMW Mini Cooper in The Italian Job (2003): The film featured the car extensively, leading to a reported 22% increase in sales the year following the movie's release.
Audi in Iron Man (2008) - Audi saw a significant increase in sales of their premium vehicles by 30% following the release of Iron Man 2, demonstrating the powerful impact of strategic product placements in blockbuster films.
BMW Z3 in GoldenEye (1995): BMW secured a $3 million co-promotional partnership deal for product placement in GoldenEye. This marketing move was highly successful, resulting in $240 million in advance sales for the Z3 model. This was the first time the Austin Martin was replaced and led to decades of movie partnerships for BMW with the film franchise.
Cadillac in The Matrix Reloaded (2003): Following its product placement in The Matrix Reloaded, Cadillac experienced a 37% increase in sales inquiries.
Aston Martin in James Bond Films: Aston Martin saw a 300% increase in sales inquiries after the DB5 was featured in the James Bond films Goldeneye (1995) and Tomorrow Never Dies (1997).
Chevrolet Camaro in Transformers (2007): The Chevrolet Camaro's appearance in Transformers led to over 60,000 units sold by the end of that year, showcasing the strong impact of product integration within a major blockbuster film.

Food + Beverage

Pinot Noir in Sideways (2004): Following its feature in the film Sideways, sales of Pinot Noir wine saw a significant increase, with the Blackstone brand experiencing a 150% boost in sales. Conversely, Merlot sales dropped by 2% due to the film's negative portrayal of that wine variety.
Eggo in Stranger Things: After the show's premiere, Eggo's sales increased by 14% in 2017 and by 9.4% in 2018, revitalizing the brand through strategic integration in a popular series.
Reese's Pieces in E.T. the Extra-Terrestrial (1982) - After M&M's passed on the opportunity, Reese's Pieces were used in pivotal scenes with E.T. The result? A reported 65% surge in sales within just two weeks of the film’s premiere.
Shawarma Sales Post The Avengers (2012) - Shawarma sales increased by 80% in Los Angeles after being featured in The Avengers, showing how even a brief mention of a food item in a popular film can boost sales significantly.
Heineken in Austin Powers (1997): Heineken experienced a 19% sales increase after being featured in the first Austin Powers movie.
Kahlua in The Big Lebowski (1998): The character's preference for White Russians in The Big Lebowski led to a 26% increase in Kahlua sales.

Technology

Apple's PowerBook in Mission: Impossible (1996): Following its prominent placement in Mission: Impossible, sales of Apple's PowerBook increased by 28%.
Microsoft in Superhero Movie (2008): Microsoft saw a 20% increase in product sales after being featured in Superhero Movie.

The Toy Story Effect

Mr. Potato Head after Toy Story (1995) - Sales of Mr. Potato Head increased by 800% following the release of the original Toy Story movie, highlighting how effectively film can rejuvenate interest in classic toys.
Etch-A-Sketch after Toy Story (1995) - The inclusion in Toy Story led to a 4,000% increase in sales for the Etch-A-Sketch.
Slinky Dog after Toy Story (1995): Following the film's release, the manufacturer received 20,000 new orders, revitalizing the discontinued product.

Retail

Missguided in Love Island: Partnering with the reality TV show, Missguided saw a 40% increase in sales, with featured items sometimes seeing a 300-500% sales boost.
Pottery Barn in Friends: Every time the episode featuring a Pottery Barn table airs, the company experiences a spike in catalog requests, highlighting the long-term benefits of product placement secured without direct payment for the placement.
Reebok's Garment Collection in Blade (1998): Reebok reported a 40% increase in sales of their Garment Collection following product placements in Blade.
Gap in The Intern (2015): Gap's product placement in The Intern led to a 14% increase in sales of the branded merchandise featured in the film.

Making Your Brand a Star

Brands that wisely invest in product placement as a marketing strategy can enjoy sustained interest and declining CPMs, proving that some marketing investments truly keep giving back, year after year. Ready to explore how your brand can benefit from Hollywood's magic? Let’s make your brand a star on the silver screen and beyond. Our team is here to open doors to opportunities you may never have imagined.

Eager To Learn More?

To further explore the strategies and benefits of effective product placement, check out these related articles from the Hollywood Branded team:

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