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How Does Product Placement Work? Examples and Benefits

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When Mission: Impossible hero Ethan Hunt, played by Tom Cruise, speeds off in a car to save the world, you can usually count on seeing the black, white, and blue logo of a BMW. When Joel Goodsen (also Cruise) struts across the screen in Risky Business, he’s prominently flashing a pair of Ray-Ban Wayfarer sunglasses. These are examples of product placement in movies. 

As a small business owner, you might find product placement to be a cost-effective marketing tactic. Here are some ways to dive in.

What is product placement?

Product placement is a marketing technique in which a product or service is showcased in some form of media, such as television shows, movies, music videos, social media platforms, or even ads for other products. Advertising professionals sometimes call this an embedded marketing strategy.

Paid product placements typically aim to reach specific target audiences within the commercial retail market. For instance, the popular game show The Price Is Right gives screen time to dozens of branded products—most linked to people who might be watching television in the late morning (when The Price Is Right traditionally airs). Often, this audience tends to be made up of homemakers and retirees, so the show’s prominently featured products frequently include items like appliances and cooking supplies. The goal of this visual product placement is to build brand recognition and capture viewers’ purchase intention when they go shopping.

How does product placement work?

Product placement works by featuring items and services outside the context of traditional ads. When a TV commercial block appears in the middle of a show, or a banner ad appears at the top of a website, people understand they are viewing traditional paid advertising. But when people watch a carefully placed paid promotion, they may not even realize they’re viewing a piece of advertising. Whether the audience realizes it or not, the product’s visual placement is intended to capture a viewer’s attention and influence their future buying decisions. Here are some ways that product placement shows up in the advertising industry:

  • TV and movie placement. This form of product placement offers visual placement in movies and television shows. Prominent characters may be using a particular product or service, even if it’s never called out by name. The TV show 30 Rock turned product placement into a joke by turning the model on its head—explicitly naming the real products they advertised, and hawking fake products through traditional, “subtler” means of product placement (Sabor de Soledad chips, anyone?).
  • Video game placement. Marketers can pay for virtual product placement in a video game. Given the narrative nature of modern games, and advancements in digital editing technology, these products may show up in much the same way that they might appear in a movie.
    • Social media placement. Brands can pay a social media personality to use their products in their posts. For instance, in these paid posts, a lifestyle influencer might film a video at a particular hotel or demonstrate a makeup routine using a certain product.
    • Verbal placement. A more subtle form of influencer marketing involves paying a well-known figure to talk about a product or service during the course of an interview, or even while out in public. During the Super Bowl’s annual media week, many retired athletes cruise along “radio row” giving media interviews and plugging products during their on-air conversations.
    • Retail floor placement. Perhaps the oldest form of product placement—one that predates film, video games, and social media—is where companies pay for prime space in retail stores. In the grocery industry, large brands often negotiate product placement deals that guarantee them shelf space at eye level.

    Benefits of product placement for businesses

    As a small business owner, you stand to benefit from a reasonably priced product placement deal. It can boost your brand’s popularity and, if you’re in ecommerce, drive traffic to your online store. We can break down the benefits of paid product placement into three major categories.

    • Increased brand visibility and awareness. Like any form of advertising, product placement gets your goods and services in the minds of more potential consumers. When they encounter your product in multiple ways—in filmed entertainment, video games, or social media posts—you gain multiple chances to make a subtle impression.
    • Strengthens positive brand awareness. A clever placement showcases your product, but it does so without disrupting a person’s viewing experience. Traditional commercials, by contrast, can potentially annoy a customer, creating negative brand associations. Even the most glaringly obvious product placement can still feel more organic than a traditional commercial because it doesn’t occupy traditional ad space; it appears as part of other content.
    • Cost-effective compared to traditional advertising. Depending on the scale of your campaign, you may find that paid product placements offer greater value over time than traditional advertising campaigns. You can find bargains by partnering with upstart social media influencers or independent filmproduction companies. Since you’re not competing with multiple brands for a sliver of screen time, you may be able to negotiate better rates. In fact, you may even be able to get some free product placement if you can get your product featured on a news broadcast or included in a gift guide.

    3 product placement best practices

    Not all product placement campaigns, however, are equal. The most effective ones show respect to potential customers and are not overbearing with ad messaging. To reach your customers more subtly, embrace these three product placement guidelines.

    • Offer transparent disclosure to viewers. Respect viewers’ intelligence. If you’re working with an influencer to showcase your products, label the collaboration as a paid promotion. If using social media, link to your brand’s handles. There’s no shame in the fact that this is an advertisement.
    • Pursue relevance to a storyline or plot. If your product appears in a movie, television show, or video game, make sure it organically exists in the storytelling. Think of the way that FedEx naturally integrates into the storyline of Cast Away with Tom Hanks. Hanks’ character is literally a FedEx employee, whose responsible behavior positively reflects on the company—and this form of product placement helps the film move forward.
    • Provide integration that enhances the viewing experience. As a marketer, you want viewers to welcome mentions of your product. In other words, seeing your product should make a viewing experience better, not worse. For instance, the online video game Fortnite lets players add specially branded products like Nike Air Jordans to their in-game avatar. Nike gets brand exposure, and players welcome the chance to engage with their product.

    Examples of successful product placement campaigns

    Product placement has netted some tangible business success for small business owners and ecommerce retailers. Two case studies are:

    Batsheva

    Shopify merchant Batsheva found success getting celebrities, musicians, and influencers into their custom-crafted dresses. They’ve also had success placing their clothing in films. This has helped the company build brand prestige with existing clients, while introducing the brand to new legions of potential customers.

    Zillow

    As The New York Times recently reported, the property listing website Zillow has succeeded in becoming a buzzword by integrating itself into movies and TV shows. For instance, in the Netflix series Never Have I Ever, a character says: “I Zillowed his house. Do you want to know what his Zestimate was?” These proprietary terms are thrown around like common jargon. They make the Zillow brand seem synonymous with looking up real estate listings, thus building Zillow’s brand prestige.

    Product placement FAQ

    What does product placement mean?

    The phrase “product placement” means the intentional insertion of products or services into non-advertising media. Examples include products prominently featured in movies, TV shows, video games, radio interviews, and social media posts. When a product is artfully placed in a piece of media, it does not automatically register as an ad. It reaches the consumer in more subtle ways. This stands in contrast to traditional advertising.

    Is product placement legal?

    Yes, product placement is legal. In fact, many brands spend top dollar to have their products featured in popular forms of media. The only way that product placement can get you into legal trouble is if you disparage a brand without its permission—making it seem defective, unsafe, or otherwise undesirable. This can expose you to a libel or defamation lawsuit.

    What are the four types of product placement?

    Four particularly popular forms of product placement are film and TV placement (where a product is clearly shown in a movie or TV episode), social media placement (where a social media personality features the product in a post), video game placement (where the product turns up in the action of a video game), and retail store placement (where the product is placed on specific shelves or end caps to grab shopper attention).

    What is the purpose of product placement?

    Product placement exists as a form of advertising that does not bombard a viewer with sales language. Typically, the product exists organically in the context of a scene, social media post, or video game. Rather than overtly trying to sell you a product, marketers try to make you aware of it and show how it can be used. This may not drive instant sales, but it can build long-term brand equity.
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