To Product Place or not to Product Place. That is the Ad Agency Question.

One of the first, and arguably most logical, questions a brand seeking a product placement agency might ask is, does product placement work?  While we have been answering this with an obvious yes for eighteen years, larger advertising agencies whose ability to bill may help guide their answers, have been less consistent.  This makes perfect sense; if your business plans call for the creation of advertisements and the commissioning of the media purchased to distribute those advertisements, you would logically support the mediums in which profit can be found. What sways the opinions of major ad-biz players is far less the viability of a medium and far more the billability thereof.

Back in 2007 Starcom’s product placement exec disapproved of an overt brand integration on The Sopranos. In the scene, Tony presents his son A.J. with a Nissan Xterra. The exec said the brand inclusion was, “Really obvious … It disengaged me from the story. It was very overt.”  That may or may not be so (we’re guessing Nissan was fine with it), but was the opinion in any way guided by the fact that The Sopranos, an HBO production, could not be influenced by cash offers for integrations?  It’s a theory worth considering given the agency’s current stated position.

Starcom’s SVP/research now states that, “Media fragmentation is forcing us to rethink the 30-second spot and the 15-second spot, as well as frequency and reach.” And goes on to say that incorporating a product into original-content narrative yields an opportunity for “more meaningful connections to the end viewer without it just being in your face within that 30-second spot.”

It seems the big ad agencies are now facing a universe where traditional network-produced, ad dollar-financed programming is becoming the minority option.  Original content produced by Amazon, Netflix, Yahoo and even Showtime, Starz and HBO are paid for by subscribers, leaving ad agencies without a seat at the table. Why wouldn’t they double down on the reliable avenues for billing beyond producing and purchasing traditional thirty-second spots?

Meanwhile, HERO has spent nearly two decades nurturing relationships with the very same influential production personnel that made network decisions and which has now expanded into the subscription-based realm.

This helps underscore a major difference between an ad agency that practices product placement and an established product placement agency; the ad agency works with money to create brand integrations and the product placement agency interacts with the human beings literally on the set.  Not only is the latter the far less expensive alternative, it will also survive the impending restructuring of entertainment delivery away from the commercially financed as past models become outmoded.