Product placement is a form of advertising used in television and movies.
If you've ever noticed an actor drinking a particular brand of beer in a movie or heard her mention a particular brand name in a television show, you have seen product placement at work. Product placement is a form of advertising where companies pay to have their products used or seen in an indirect way. Product placement differs from regular advertising in that it is more subtle because the product remains in the background.
Significance
According to "Promo" magazine, the amount of money spent on product placement in television, movies and other media such as video games was expected to increase from $3.1 billion to $7.6 billion worldwide between 2006 and 2010. In the United States alone, companies paid $1.5 billion in 2006 to place their products in the same forms of media.
Benefits
Companies can benefit from product placement by being able to promote their products in front of millions of people without having to develop a full-blown advertising campaign. When a celebrity is seen using a product in a movie or television show, some viewers may interpret it as a form of indirect endorsement by the celebrity.
Need for Advertisers
"Promo" also indicates that the increase in the use of product promotion is due in large part to the proliferation of ad-skipping technology. Innovations such as TiVo allow viewers to watch their favorite programs without having to watch the commercials. As a result, advertisers could waste millions of dollars creating commercials that may not be seen by enough viewers.
Other Types
Smaller companies may not have the resources to pay for product placement, so they may resort to other methods. Some companies may barter for their product placement by exchanging it for providing the production crew of a show with free use or supplies of the product. Product placement agencies look for the best opportunities to place your product for a fee.
Expert Insight
According to some experts, the ubiquitous nature of product placement is not well-received by consumers who feel inundated with the amount of advertising to which they're already exposed. According to Max Kalehoff of the marketing research firm Nielsen BuzzMetrics, consumers are using the Internet to wage campaigns against intrusive product placement. Rance Crain of "Advertising Age" magazine has stated that consumers have become desensitized to advertising due its volume.
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