Product Placement Makes Billions of Dollars for Networks... None of it Has to be Yours!

Broadcast and Cable Magazine has just reported that product placement revenues are up 13.2% so far this year in the U.S.  This increase doesn’t just come through the obvious, big money Coke on the American Idol judge’s table exposures; it takes also into account digital and music integrations.  The numbers are pretty staggering. How about $6.01 billion? That’s a 12.8% jump from last year and they’re predicting $11.4 billion in 2019.

But where does all this money come from and who is getting it? In terms of motivation, the money comes from companies who want to garner brand recognition but don’t want to place their bets on traditional commercials in the DVR/time shifting universe.  If you have a DVR, whether it’s a Tivo or the unit that came with your cable or digital satellite subscription company, you know that you’re way less likely to watch the commercials.  Why bother when you can zap right through them?  Even if you want to watch the show live, you’re likely to start it a few minutes early to allow for fast forwarding through the breaks. So, advertisers, most of whom fast forward through their own commercials, know that.  They also know that hiring a celebrity to hold their product on camera within a show or film, can be prohibitively expensive. Product placement allows them to solve both problems at once; they get a zap-free brand exposure wherein their product frequently shares the screen with a celebrity, providing an implied endorsement.

Many of the brands embedded within TV shows are placed there as part of a media buy deal.  PQ Media cites a deal between Apple and the very popular sitcom Modern Family. In this case ABC, the network that produces the show, not only included the paid brand integration but specifically designed it to air close to a commercial pod that featured the Apple spot. While ABC felt it would increase viewer engagement, we at HERO believe that it only makes the placement seem less organic and could conceivably engender resentment from viewers… if they don’t fast forward through the commercial spot!

For the most part, product placements that are made through a network’s add sales department are part of a larger media buy and that is what adds up to billions of dollars.  That’s great for the networks and the brands with pockets deep enough to play, but what about the uncountable medium-sized businesses whose budgets don’t allow them to belly up to the paid integration bar? How does product placement help companies with more modest resources?

While mega-deals for big bucks are happening in the ivory towers of Hollywood and the MADMEN trodden, tobacco-patina’d walls of Madison Avenue; there is another, larger set of deal makers. They don’t wear suits, they don’t lunch at the Yale Club and they don’t do a lot of sitting. They are the actual producers, set decorators and props masters who put the items you see on the screen on the sets and locations.  They’re blue collar working stiffs who have much more in common with the person in the red apron who gave you great advice at Home Depot (no, that wasn’t a product placement) than the executive who reclines comfortably in the ergonomically perfect Haworth Zody chair (that was).  HERO interacts directly with these folks to get our clients on the screen, which offers great exposure for brands and barely adds a dime to the multi-billion dollar figures boasted at the top of this blog.