Those consumers who prefer their entertainment unbranded — that is, without the products, logos and other trappings of advertisers embedded in the content — are in for a disappointing decade, according to a new report.
The report, scheduled to be released today, predicts that marketers will remain enamored with placing products wherever they can: in movies, television and radio shows; on Web sites; in video games; in lyrics; in newspaper and magazine articles; and even in the plots of novels.
Product placement is an example of a phenomenon known as ad creep, in which popular culture grows increasingly commercialized. As technology enables consumers to avoid or skip over ads, by using devices like digital video recorders or iPods, marketers are trying to restore the balance in their favor by placing ads where consumers cannot miss them.
The study, from PQ Media, a research company in Stamford, Conn., covers not only the United States, the largest market by far for product placement, but also 14 other countries. It is the first time that PQ has compiled data about — and offered forecasts for — product placement practices overseas.
Placing products in the content offered by entertainment media abroad has lagged for several reasons, including the slower pace of development for commercial television networks in countries where government-run TV has been the norm.
But just as French and British consumers can now shop at American-style convenience stores, the practice of product placement is gaining popularity overseas. In fact, the European Union is considering rules that would liberalize what are now strictures on — and in some instances, virtual prohibitions against — the inclusion of products and brands.
“Product placement has emerged as a key marketing strategy worldwide,” said Patrick Quinn, president at PQ, who offered a preview of the report in a telephone interview yesterday.
“There’s a new media order emerging,” Mr. Quinn said, “fueled by a fear of ad-skipping technology, doubts about traditional advertising’s effectiveness and, in some countries, a search for new revenue streams as government subsidies decline.
“As brand marketers are seeking to effectively engage consumers with an emotional connection, product placement is no longer a novel tactic and is increasing dramatically.”
The PQ report tracks several types of product placements. One type is paid placements, where marketers spend money to weave their wares into the plots, scripts and content of entertainment offerings. Another type is barter, when, for instance, an airline provides tickets to the producers of a TV series in exchange for the airline appearing or being mentioned in an episode.
Spending on paid placements worldwide will reach $3.1 billion this year, the PQ report forecasts, compared with $2.2 billion in 2005. The United States led last year with $1.5 billion in paid placements, the report says, followed by Brazil, Australia, France and Japan.
By 2010, the report predicts, worldwide paid placements will total almost $7.6 billion.
If the European Union approves the changes under consideration, called the Television Without Frontiers Directive, there could be triple-digit percentage increases in the money that marketers spend in Europe for paid placements, the report says.
Spending on all types of placements, according to the report, will total $7.4 billion this year, compared with just under $6 billion in 2005. The United States was also first last year in all placements, at $4.5 billion, followed by Brazil, Japan, Australia and France.
By 2010, the report forecasts, all worldwide placements will total almost $14 billion.
Placements are “going to be an integral part of the business” for the foreseeable future, said Dick Lippin, chairman and chief executive at the Lippin Group in Los Angeles, a public relations and marketing agency. Lippin is forming a unit, called Brand to Hollywood, meant to help advertisers forge ties between products and celebrities as well as between products and events in the entertainment industry like award shows.
When Mr. Lippin started his agency in 1986, he said, marketers were content to just run commercials during TV shows; the few ways to dodge the spots included using remote controls or leaving the room.
Today, Mr. Lippin said, because “technology has had a tremendous effect on what consumers watch and don’t watch,” the marketers “are coming to us asking how to place their products and brands into the entertainment world, for maximum effectiveness.”
The list of marketers engaged in product placement and branded entertainment is lengthening each week, particularly online. Their ranks were once dominated by makers of packaged foods, soft drinks and other lower-priced products, which could be easily inserted into the background of a scene.
But that is changing, as illustrated by the five sponsors of “Gold Rush,” a game in the form of a seven-week, online reality series from Mark Burnett Productions, the creator of placement-laden programs like “The Apprentice” on NBC and “Survivor” on CBS.
“Gold Rush,” which is to begin on Sept. 13 on a Web site operated by the AOL division of Time Warner (aol.com/goldrush), will have only one packaged-goods sponsor, the Coca-Cola Zero brand sold by the Coca-Cola Company. The others are a retailer, Best Buy; an automaker, the Chevrolet division of General Motors; a wireless carrier, T-Mobile; and a bank, Washington Mutual.
The placements will include using Chevrolet cars and trucks to drive contestants to competitions — and to transport the $2.2 million in gold to be hidden around the country that lends the series its name.
AOL has included product placement in previous online series like “The Biz,” sponsored by Chevrolet and Sprint, but those were “baby steps” compared with its aggressive pursuit of sponsors for “Gold Rush,” said Kathleen Kayse, executive vice president for sales and partnership alliances at the AOL Media Networks unit of AOL in New York.
The biggest problem with product placement and branded entertainment is how often projects blur or cross the line that traditionally separates editorial content and advertising, potentially alienating the consumers they are meant to woo.
“We’ve got experience understanding what consumers are willing to accept as entertainment and what they are not willing to accept as commercialization,” Ms. Kayse said.
“The last thing we want to do is put the consumer in the position of feeling it’s too commercialized,” she added.
Stuart Elliott, The New York Times. August 16, 2006
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