July 18, 2017

Most people know that a can of Pepsi or Coke sitting on a kitchen table in a movie or TV show is product placement, an oh-so-subtle advertisement without words or action. The item is there to be noticed, even unconsciously, which may lead to a purchase or trip to the refrigerator. Until recent years, these indirect advertisements have been fairly simple. The practice dates back to the 1930's.
But product placement has exploded in recent years and is now more sophisticated than ever, so much so that consumers don't realize they're being sold a product while they're watching their favorite show or film. This is, in part, attributable to the fact that today's audiences react negatively to blatant placement and, with DVR's, are more prone to fast-forward through commercials, causing a conundrum for advertisers.

Ioannis Kareklas, Assistant Professor of Marketing at the University at Albany, School of Business, along with lead author Brian Gillespie, Assistant Professor of Marketing at the University of New Mexico, and Darrel Muehling, Professor of Marketing at Washington State University, experts on advertising effectiveness and social behavior, have conducted research on cognitive and affective fit. Their work has appeared in the Journal of Consumer Psychology, Journal of Advertising, Journal of the Association of Consumer Research, Journal of Consumer Affairs, Journal of Marketing Communications, Journal of Marketing Channels, and others.

Dr. Kareklas quotes the Product Placement Paradox coined by Erwin Ephron in 2003: "If you notice it, it's bad. If you don't notice it, it's worthless."

According to Dr. Gillespie, "Product placements incorporated into a script in a very overt manner often lead to negative reactions from viewers because they take away from the The movie Portlandia, featuring a Subaru placment. viewing experience."

But today's product placement, they say, must be noticed, in a good way. An up-to-date placement would typically involve characters in a television program driving a new car and observing its cutting-edge tech features, as in the following segment of Portlandia featuring a Subaru placement.

In sharing some of their secrets, Dr. Gillespie, Dr. Kareklas and Dr. Muehling report the following:

  •     The vast majority of advertisers report using product placement to promote their brands.
  •     Today, product placement spending in the United States alone is estimated at more than $6 billion annually, with growth projections for 2019 to more than $11 billion (PQ Media, 2015).

Reports suggest that consumers using DVR technologies skip between 50% and 90% of all commercials (McCarthy 2001). In response, and considering the favorable cost-benefit ratio (Wasko, Phillips, and Purdie 1993), brand managers have been increasingly relying on product placements, integrating their brands within a variety of narratives.

While many academics and marketing practitioners accept The Product Placement Paradox, the team's work (the Product Placement Fit model) suggests that when product placements are consistent with the narrative and emotional tones of segments in which they are embedded, positive outcomes can result for both consumers (who enjoy the narrative more) and marketers (who receive positive product reactions).

When product placements are congruent with both the narrative's story structure (cognitive fit) and the affective tones elicited by the narrative (affective fit), more favorable brand attitudes are produced.

Narrative enjoyment resulting from a product placement is the mechanism through which product placement fit impacts consumers' brand evaluations.

Under conditions of high affective and cognitive fit, all involved parties benefit as marketers receive positive evaluations toward their brand, content producers receive funding or other considerations from the use of product placement, and viewer enjoyment of the program increases.

Dr. Kareklas says the placement segment of advertising has become such big business that there are two trade associations now supporting the practice, the Entertainment Resource & Marketing Association and the Branded Content Marketing Association.


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