Do product placements really work?
The answer is product placements.
If, like me, you’re also wondering how product placements really work, keep reading.
A YouGov survey, reported by AdWeek, estimates that the placement of various cans, bottles and cups in the fourth season of Stranger Things generated a combined placement value of $3,4 million for Coca-Cola.
And netted the show’s producers at least $25 million.
Product placement spending is increasing globally.
2022 also brought long-awaited new content that was put on hold during the pandemic. Plus because of the streaming boom, there are more opportunities for brand integration than ever before.
Product placement spending is on pace to hit $26,2 billion this year as people are expecting more branded entertainment. For some brands, product placement is a great way to engage pre-Boomer audiences.
Unsurprisingly, TV and movies have the biggest share of product placement spending, and digital media and specially recorded music are growing even faster.
In the US, searches for the affordable luxury brand Telfar went soaring after Beyoncé dropped her new album on Spotify.
In a report published by product placement data and analysis firm PQ Media, their CEO explained that:
Paid placements have grown substantially in number and value during the past several decades because brands have become more willing to invest in the creative integration of their logos and products in storylines that expose their assets in meaningful ways. And the strong desire to gain brand awareness among target consumers, create positive brand associations, and generate sales lift will continue to favour product placement in the post-pandemic era.
Do people really pay any attention to product placements?
Personally, I don’t even remember paying attention to a product placement if I’m engaged with the content.
And apparently, that’s why they work.
According to the researchers “[…], skilful product placement creates emotional connections with key target consumers brands are trying to reach, particularly pre-Boomer demographics, which are more elusive, tech-savvy and averse to traditional media.”
A Nielsen study cited by the Journal of Management and Marketing Research found that product placement on TV can raise brand awareness by 20%.
In an interview with Marketing Brew, Beth L. Fossen, assistant professor of marketing at Indiana University’s Kelley School of Business, explained that “[brand] integrations need to feel natural and not look or sound like ads.”
She told Marketing Brew that the most effective product integrations happen earlier in a show before viewers start to tune products out or get sucked into the storyline.
A study featured by Marketing Brew found that brands that use product placement together with advertising during the TV show gain the most benefit.
As the article explained: “The study compared four audiences: viewers who saw at least two seconds of a brand’s linear ad; viewers who saw the brand’s product integration but no ad; viewers who saw both a linear ad and the same brand’s product integration; and viewers who saw neither ads nor product integrations.”
The researchers were particularly interested in finding out if people purchased the products within two weeks of watching an integrated airing.
And the results do speak for themselves.
“Doritos, which had a product placement within Riverdale, saw a 61% lift in sales among audiences who saw a TV commercial and the product placement in the series, nearly twice as much as the 37% lift in sales resulting from audiences who only saw the TV commercial.”
And “on the CBS series Mom, a cereal brand saw a 53% lift in sales among audiences who saw a TV commercial and a product placement, more than 3x higher than the 13.5% lift from a TV commercial alone.”
On the other hand, an auto brand that only advertised on ABC, “saw an 8% lift in website visits when audiences saw both a commercial and an in-show product integration” and no increase in website visits from the TV commercial alone.
What about streaming TV and going ad-free?
Post-pandemic soaring production costs and pent-up demand means that TV ad rates are going up. At the same time, viewership is getting fragmented across multiple platforms.
Consumers are getting tough to advertise to and product placements are the kind of ads that we can’t skip.
To quote prof. Fossen from her interview with Marketing Brew
Product placement can be sneaky. Without disclosures, some viewers won’t even realize that they’re being advertised to. For example, The Lego Movie could be considered an ad.
And while Netflix, HBO, and Disney+ don’t sell traditional ad spots, the use of product placements in their original productions is going up.
But looking at Netflix, that’s not a sustainable solution.
This July, Netflix reported a loss of 1 million subscribers for the second quarter of 2022. And the news sent its shares falling 67% by the end of July.
Soon, like Roku and HBO, Netflix will also offer an ad-supported tier with Disney+ soon to follow.
According to Bloomberg, the new tier could generate $8.5 billion annually globally for Netflix by 2027, including subscription fees and ad sales.
They also expect Netflix to not run ads during original movies when they’re first released and instead insert ads at a later date.
Viewers are already frustrated when streaming shows play the same commercial over and over again. And Netflix is hoping to avoid these complaints by not using too much targeting to tailor ads to the viewers and ensuring that the same spots don’t endlessly repeat.
And this news has delighted advertisers.
First, TV's fastest growing segments offered no solutions for advertising. In fact, according to some estimates, the amount of time spent watching ad-supported videos was projected to drop by 6% by 2025.
Now it’s projected to go up by 1%.
Do you get a sinking feeling when your favourite TV series ends or feel a sense of loss when your favourite character dies? That’s the side-effect of a deep emotional connection - even if it’s fictional it’s real in your heart of hearts.
Emotional connections form the strongest and most long-lasting memories. And our memories drive our behaviours.
You may not think that you’re paying attention to the brand of the car they drive, but you’re absorbing the brands that create the character and personality.
People pay attention as Peloton discovered when their stock took a beating after its product placement on HBO featured lead characters suffering heart attacks while on Peloton machines.
Marketing wisdom you won’t find scrolling LinkedIn.
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