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Putting the Pieces in All the Right Places
It's been nearly three decades since a little movie made Reese's Pieces a household name. Have product-placement marketers learned anything since then?
For the rest of the September 2010 issue of CRM magazine please click here
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Marketing isn’t all fun and games. But it can be a little of each. 

For companies invested in maintaining strong customer relationships, the ability to connect with prospects and customers unobtrusively—in real time, and in an engaging way—is an integral component not just of marketing, but of an overall CRM strategy. But marketers can’t usually play trial-and-error—they can’t risk their product message or brand identity appearing in the wrong context. Ironically, despite the multitude of modern options available to them today, marketers have long relied on a low-tech solution: communicating a product message through product placement and the brand identity through brand integration. Product placement and brand integration may not be cutting-edge, but they still represent a way to build awareness and affinity with customers who may not sit through commercials or browse social networks. 

Throughout the 20th century, marketers placed their products onto the sets (or, ideally, into the plot) of radio programs, movies, and television shows. Who can forget the touching moment when little Elliot offered Reese’s Pieces to his new buddy E.T.? No one, apparently. That product placement signified a turning point for the advertising industry, the moment when marketers realized a well-placed in-content ad could be just as valuable as—and leave a more lasting impression than—any billboard or 30-second commercial. 

Perhaps the earliest known in-content advertisement appeared in 1873, when railway and shipping companies reportedly encouraged the author Jules Verne to mention their businesses in chapters of his serialized novel Around the World in 80 Days. Whether Verne accepted any of the offers remains unknown, but a study guide on the novel from the Cleveland Playhouse notes that many of his descriptions approximate major companies of the time. 

And product placement in films dates almost as far back as the medium itself. According to a 2006 article in the Journal of Broadcasting and Electronic Media, less than six months after filmmakers Auguste and Louis Lumière screened a film in the basement of a Paris café in 1895, the two brothers had entered into a distribution and production arrangement with British soap manufacturer Lever Brothers. 

Fast-forward more than a century and you have a $3.6 billion industry expected to expand by 5 percent by 2014, according to PQ Media, a provider of alternative-media econometrics. And no wonder—any successful effort provides a very clear benefit: A consumer can discover, learn about, and build an affinity for that product without actually realizing that she just watched a commercial. While product placement and brand integration are both valuable, they’re not at all identical. 

Product placement is the less expensive of the two, as it ensures visibility but relinquishes control of the brand. How (and for how long) the product is used is up to the content creators, as is the impression left with viewers. Brand integration, by contrast, offers a more hands-on approach: A deal is negotiated between marketers and content producers regarding how a product will be incorporated. An example of the difference? Placement puts a brand-name jacket on the protagonist’s back; integration means his friends may compliment the jacket and refer to the brand by name. 

Despite their effectiveness, in-content ads have long gotten a bad rap. As far back as 1920, for example, an article in the motion-picture trade journal Harrison Reports denounced the appearance of Red Crown gasoline in a 1919 comedy called The Garage. And as recently as April of this year, pop star Rihanna was quoted saying that she hated product placement because she felt it made things seem too commercial. 

Perception aside, industry observers insist that in-content ads can work, provided they abide by a few unwritten rules: The product should be shown in a positive light, but not overpitched. The product can’t interfere with the natural flow of the content and, most important, should be relevant to the content’s subject matter. 

In our postmodern world, though, some rules are made to be broken. Episodes of the NBC sitcom "30 Rock" have included product placements alongside transparently scripted gags about product placement. Other rules are sacrosanct. The AMC basic-cable drama "Mad Men," set in the early 1960s, can mention Popsicles and Hilton, but lead character Don Draper can’t turn to the camera and suddenly profess his love of, say, iPhones. That may be an extreme example, but it underscores just how important it is that in-content ads also be in-context ads.

In fact, several analysts and marketers say that failure to make sense in context is a sin some brands continue to commit. “When product placement doesn’t have anything to do with the media that you’re consuming, it’s distracting, if not downright annoying,” says David Raab, principal at marketing and publicity agency Raab Associates. “It could feel a bit sleazy if you’re not on the up-and-up about it.” 

The integration of a product must seem authentic because authenticity is what makes product placement work, regardless of the medium: People want what they’re seeing to seem realistic, or at least to fit within their suspension of disbelief. How often have you seen a show where the bottled beer on the table is labeled “Beer”? A prop that’s too obviously generic can be just as jarring as a brand name mentioned too prominently. 

“When you’re watching a sitcom and it’s a totally ‘clean’ set, it doesn’t resemble…somebody’s real life,” says Tom Meyer, president at entertainment marketing firm Davie Brown Entertainment. “All the logos are gone or have made-up names. That’s obtrusive to a viewer—but too much messaging can mean an interruption…. Integration hopefully happens as a well-choreographed execution between the brand, the intellectual-property owner, the product team, and the brand’s agency.” 

Steve Rasnick, senior vice president at UPP Entertainment Marketing, agrees. UPP has been in product placement since 1978, helping such brands as Coors, Evian, UGG Boots, and Ray-Ban (the sunglasses made famous by Tom Cruise in "Risky Business"). Viewers, Rasnick argues, “would much rather see legitimate brands than ‘Brand X’ on screen. Brands are going to be used no matter what, whether it’s a specific brand of soda or a generic brand. It gets in the way more if it says ‘Brand X.’ Of course, you can take brands and put them so blatantly on screen that it detracts from the story. But [professionals] understand how far things should be pushed and where they shouldn’t.”

The recent video for the Lady Gaga song “Telephone” might provide an example of in-content advertising gone wrong, says Jeff Greenfield, chief operating officer and cofounder of media-tracking system C3 Metrics. Greenfield says he found the video’s sudden focus on a Virgin Mobile phone “freaky,” and that Lady Gaga would likely use a more sophisticated device in real life. (On the other hand, Greenfield commends the video’s equally atypical use of Wonder Bread, because the bread is at least made to look white and fluffy.) 

As an example of how brands can successfully integrate themselves into entertainment content, Liz Miller, vice president of senior management at Global Fluency, a firm specializing in worldwide communications services, cites Gatorade’s Replay campaign, which drops former high school rivals into do-over athletic events, giving aging athletes the chance to relive past glory or to redeem themselves. Shown as a series of episodes on Gatorade’s Web site, the show’s first season gave two teams the opportunity to replay a 1993 football game that ended in a tie. Gatorade sponsored a training camp for the former athletes, provided public relations for the event, and sold tickets and endorsements—all while introducing (or reintroducing) itself to the over-30 demographic, prospective customers who are less likely to be active or consume sports drinks. “Replay is a good example of when branded entertainment works—and it worked exceptionally well,” Miller says. “It had a sales-driven proof point to justify why it was done. Gatorade created a platform that said, ‘Hey, men over 30! You need to be fit and active.’” 

As for return on investment (ROI), the Replay campaign cost Gatorade just $225,000 in paid media, according to alternative and digital marketing agency Street Attack; subsequent news coverage earned visibility equivalent to paid media worth in excess of $3.4 million. The event was such a success that Fox Sports Net agreed to telecast Season Two of Replay nationally, and a third season is planned. 

“You need to have a very clear understanding and measurement point of what your ROI or objective is going to be,” Miller argues. “Marketers are going to start turning away from things that just get their [brand] names out there. You can’t just do it because your CEO’s favorite TV show is on Fox at 8 p.m.” 

Ian McQueen, president of entertainment marketing at marketing agency ISM Entertainment, argues that ROI for in-content advertisements hinges on the use of cross-promotion to drive sales. “Back-end promotions solidify that product placement using traditional means. You can let the consumer know that you’re associated with the film and you can make them some type of offer: free movie tickets, a discount on the product, a discount on the DVD release.” 

McQueen, who was responsible for the placement of a Klein bicycle on Jerry Seinfeld’s living-room wall on the set of "Seinfeld," says that ROI isn’t always as clear cut as sales. The value, he says, is a simple logic equation: If a viewer thinks a TV program is cool and hip, and the program endorses your product, then the viewer will probably think your product is cool and hip. “Consumers,” he says, “believe that a savvy TV show won’t use bad products.” 

Unlike other forms of marketing, such as search engine advertising, there are no hard numbers for in-content advertising. Meyer, of Davie Brown, says in-content ads rely on gut instinct—but that the same could be said with most advertising. “[In-content advertising] is highly subjective,” he says. “The definitive metrics haven’t been found. But I don’t think they’ve been found on 30-second ads either. If you turned everything off and you just did one aspect of advertising, then it’d be easier to find out its effectiveness.” Meyer says Davie Brown measures in-content ads in terms of “estimated media value”: the cost to get that message equivalent airtime via paid media buys. He also suggests customer research to gauge the qualitative perspective of a placement. 

The inability to adequately measure the effectiveness of in-content advertising, coupled with the corruptive aspect the practice has on art, makes justifying the cost difficult. But when the practice works, it works—well done, tasteful, in-content ads leave enduring impressions and trigger emotions far beyond those generated by a typical commercial. 

Just ask Hershey’s: As a result of the inclusion of the confectioner’s Reese’s Pieces in "E.T. The Extra-Terrestrial," sales of the then-little-known candy increased 65 percent, according to BusinessWeek. Or, better yet, ask Hershey’s competitor Mars, which makes the M&Ms that were the filmmakers’ first choice. Mars executives associated director Steven Spielberg with two of his previous films, "Close Encounters of the Third Kind" and "Jaws"—both basically monster flicks—and when the producers declined to provide prior access to E.T.’s final script, rejected the placement because they didn’t want to have their product seen in the hands of some mysterious space alien. 

Maybe Gatorade can offer Mars a replay.


Editorial Assistant Juan Martinez can be reached at jmartinez@destinationCRM.com.


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