So what does all of this mean to brand managers and advertising execs? Quite simply, product placement offers a unique and valuable opportunity to enhance product recall and drive a greater return on investment for their advertising budgets.
To be clear, I am in no way purporting that product placement will rival – nor even truly compete – with traditional spot advertising. Television advertising will continue its rate of growth unabated and, if anything, we will likely see more ads squeezing their way onto our television sets.
This is largely due to the fact that TV advertising continues to return the largest profit of any medium (according to Thinkbox, £1 of TV advertising returns around £1.70 to advertisers) . But the long-term security of traditional TV spot ads also comes down to practicality: streaming content still requires breaks to be inserted into their programming and – by and large – shows are still produced on the back of advertising revenue. However, I believe that product placement will soon take its place next to advertising and programme sponsorship to form a ‘triple lock’ effect.
Consider, for example, the impact on recall for a brand that is introduced to the audience during the initial commercial break, then subtly used by key characters throughout the show, only to be followed by another brand reminder during the credits of the show.
What’s more, rather than simply pushing the brand name over and over again, product placement provides insight into how the product is used and what benefits it delivers, both of which help elevate the value of the brand to consumers.
I believe that advertisers intuitively ‘get’ this point. In fact, according to the US National Advertising Association, almost 70 per cent of advertisers in the Americas already believe that TV is saturated with spot ads, leading eight in ten to say that branded entertainment will play a greater role in their strategy going forward. Much like the recent crush to incorporate social media strategies into ad campaigns (even though, if we are honest, few have yet found a verifiable ROI for investing in social media channels) in order to capitalise on ‘second screen conversations’, so too will advertisers start to recognise the value of the third party endorsement that stems from product placement.
Brand managers and advertisers also have to be aware of the opportunity cost of not participating in product placement. The fact remains that television characters will eventually be filmed driving a car and advertisers must understand that if it is not their car that the character is driving, it will be a competitor’s.
Indeed, I frequently wonder how much Audi’s competitors would pay for the chance for their car to be used in the hit show Ashes to Ashes, rather than the now infamous Quattro.
