That’s Product Placement!

As Advertisers Look for More Impact, They Look West to Hollywood

Lights, camera, [your product here]!

Everybody’s doing it. Visa, Polo, Amstel Light, Baskin-Robbins, Hostess, Bacardi, Kraft Foods, the American Heart Association, Campbell Soup Company, Hallmark, Mercedes-Benz, Gateway Computers, Burger King, Doritos, BMW, Laurent-Perrier Champagne, Coffee Beanery, and the Office of National Drug Control Policy. Yes, all of those brands have participated in product placement deals in recent years.

And now there’s Revlon

The cosmetics maker paid ABC a reported "several million dollars" to be featured for 13 weeks in the daytime serial All My Children. The plot evidently went something like this: Susan Lucci’s character, Erica Kane, who owns a cosmetics company, Enchantment, engaged in a corporate battle with Revlon after the real-life cosmetics company tried to "hire away one of her top employees."

In what can only be described as the biggest TV story line tie-in to date, Revlon was also given exclusive rights to advertise its cosmetics products during the show’s commercial time. While the arrangement has made headlines, what you may well want to know is how the whole thing came together, for the next time your client’s brand wants to be a featured guest star on Everyone Loves Raymond.

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However, if advertisers want more exposure, this deal didn’t come around because of that craving. The storyline originated with the All My Children writers, who informed ABC’s sales executives, who quickly reached a deal with Revlon, says aW0ggela Shapiro, president of ABC Daytime. "Instead of creating a fictitious cosmetics company, we thought it might be fun for the audience if we used a real-life company as part of the storyline," she says. "It was a win for Revlon because it received extraordinary exposure, and it was a win for ABC because it brought in incremental revenue."

With the ever-increasing fusion of television and advertising, and the advent of TiVo and other services that make it easier for viewers to skip commercials, advertisers and television networks are looking for new ways to generate ad revenue in a tight market.

Of course, product placement deals on TV and in the movies are nothing new. In fact, there have been several celebrated deals that have received unprecedented marketing exposure. Remember when M&M/Mars turned down director Steven Spielberg's request for permission to use M&Ms in E.T.? Spielberg turned to Reese’s Pieces, owned by Mars rival Hershey Foods. Remember when BMW launched its Z2 roadster by featuring the car in the 1996 James Bond flick GoldenEye? The deal generated hundreds of millions of dollars of exposure. BMW reportedly paid $3 million, and industry sources estimate that the placement sold $240 million in cars in advance sales alone.

But it’s worth wondering what advertisers get out of these deals besides the opportunity to be sprinkled with a little stardust. If the advertiser is looking to get true bang for the buck, its goal is to achieve an integrated form of advertising by showing its products in a seemingly non-commercial context. Although a company might pay millions of dollars for a straightforward placement, the deals are usually more complicated. Often, product placements are part of a larger marketing tie-in, in which a company agrees to create an ad campaign, a sweepstakes, or some other promotional campaign that complements the studio’s own marketing efforts for the film.

What makes a good product placement deal?

"First and foremost, you must have your audience in mind," says ABC’s Shapiro. "If you do something that’s wrong for the audience, ultimately you lose that audience, ratings go down, and the advertiser’s not happy."

And, adds Shapiro, you can’t jeopardize the integrity of either the programming or the advertiser. "If I jeopardize the integrity of our own brand, my audience is going to be the first to let me know. If I enter a deal with an advertiser that dilutes their brand, that’s shortsighted on my part. The execution is often harder than one might imagine."

In the ABC-Revlon deal, ABC’s daytime executives met with Revlon and its agency, New York–based Deutsch, Inc., to get to know each other’s business. Although Revlon could not dictate how the story line was structured, the All My Children writers were clearly sensitive to not portraying the cosmetics company in a negative light.

"The value of the deal is in what happens in the plot," says Peter Gardiner, partner/chief media officer for Deutsch, Inc. Because this particular deal was organically grown by the writers, we just thought it was a natural fit for Revlon."

And how did Revlon go about measuring the brand impact of such a deal? "We don’t have that completely figured out," admits Gardiner. "But you’ve got to weigh the intangibles. How valuable is the story line to your brand? We’re doing our best to track the mentions within the show, and the PR we received was extraordinary. But there’s no formula for this stuff, at least not yet."

Jay May is president of the Los Angeles–based product placement agency Feature This! Some of the product deals he has structured include putting Popeye's Chicken in front of Adam Sandler in Little Nicky and a cup of Coffee Beanery coffee in Julia Roberts’s hand in a poster for the movie Erin Brockovich.

He says there are several ways an advertiser can broker a product placement deal:

  1. The product is already scripted in the movie ("He reaches for a can of SPAM");
  2. The producers decide early in the script-development phase to start looking for product placement ideas; or
  3. The advertiser agrees to pony up a marketing program that helps the producers sell movie tickets or draw viewers.

In the end, May suggests, there are three basic reasons why advertisers choose to underwrite a product placement deal: to sell product, to generate what he calls "feel-good" appeal for viewers/consumers who own or purchase the advertised product ("That’s my car James Bond drove in GoldenEye"), and to engender "feel-good" appeal for the advertiser and its employees ("Did you see my company on TV last night?").

And what does a company like ABC get out of the deal? "Ultimately, product placement deals serve the advertiser and its consumers as well as our viewers and their consumers," says Shapiro. "It’s rare that you’ll discover an opportunity that serves all the gods. For two strong brands to be associated with each other in a positive context is a great growth opportunity for everyone."

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