US TV Product Placement Boosts Brands, Even as It’s Shrinking

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Coke Product Placement

Just in time for Donny!, ad veteran Donny Deutsch’s new USA Network TV show centered on product placement, we have reached peak product placement. That’s one takeaway from the new Nielsen TV Brand Effect study, which found a 20 percent decline in product placement in US primetime TV in just two years. The study blamed increased costs for brand integrations and placements as well as increased competition from other platforms, including digital, for the dip.

As Nielsen’s study noted,

While the amount of primetime, non-sports IPPs (in-product placements) measured in Nielsen’s TV Brand Effect coverage has declined in recent years across the (US) English language broadcast networks—from 185 brands showcasing 5,580 integration occurrences over the 2012-13 TV season to 136 brands airing 4,455 integrations during the 2014-15 season—their impact hasn’t. In fact, when these integrations aired in the same program as standard ads for the same brand, brand memorability for those ads increased 16% among adults 18-34. The lift was and even more pronounced when brand memorability was measured among the broader demographic of adults 18-49 years old, which saw an 18% increase.

Nielsen TV product placement study October 2015

Product placement detractors—like Emily Nussbaum, correspondent for low-brow entertainment for the high-brow New Yorker, who recently lamented the practice at length—will celebrate the news that IPPs are dipping. But so might those who place the products. brandchannel spoke with Stacy Jones, CEO of product placement agency Hollywood Branded Inc., about what this means for the practice and some hands-on perspective behind the findings.

First, says Jones, this is a matter of quality of quantity. “Brands are looking for ‘bigger’ opportunities that they can wrap a campaign around and add social media traction to it, even if that campaign is only for a couple of weeks,” she told us. Her observations are well reflected in the study’s other findings. While it’s true product placement instances are down, combined ad and message recall and “brand likeability” have all increased in the coveted 18 to 49 demographic.

Apple Product Placement

Second, reports about the inevitable dominance of product placement may have been overstated. Jones warns that years of reports about product placement rushing in to buoy the collapsing US TV advertising paradigm has maybe led programmers to mistakenly think that the “golden chalice to fund their production will be a major brand integration deal. And many TV execs believe every brand should come with dollars attached.” For them this study is a reality check.

Jones also echoes the new findings that expanded opportunities are siphoning away interest in product placements. “What we are seeing as an agency are more opportunities for brand partnerships on more platforms. And whether that be trade and loan of product, or fees, there is a limit of product and cash to go around,” she said.

“Even a decade ago, one of our brand clients may have judged a show’s opportunity by overall reach and only wanted to work with network television, which at the time guaranteed the largest footprint,” she added. “Today, we often take a more specific look at the niche reach and relevancy to the brand. As SVOD (subscription video on demand) and digital opportunities become more abundant, the pool of properties one can work with becomes gigantic.” (Case in point, a recent episode of Marvel’s “What The–?!” YouTube series sponsored by Western Union.)

Finally, Jones says one reason product placement may be in decline is due to the networks themselves, not the brands. Aiming to create bigger packages, she says broadcasters are restricting prime time placement opportunities only to brands committed to a larger conventional ad buy. Jones explains at length:

“Even when brands themselves have interest in exploring [product placement] opportunities, the networks are requesting that they deal directly with their media agencies to go through a vetting process of ensuring that the ad dollar allocation is there before having conversations. This is literally closing the door to brands who prefer to reverse-engineer, and have dollars, are interested in overall ideas, and may then choose to grow the idea with ad dollars attached. So down go the numbers seen on network TV of product placement. And we can’t tell you how many brands we have worked with that prefer to look at the opportunity first, build legs around it on and off screen, and then add additional advertising dollars to the equation to further support. There are certain networks we will call to discuss what we and our brand client thinks may be a brilliant idea, and the conversation is immediately shut down based on, ‘let us have the network ad team assigned to that brand’s agency do a cost basis history of ad spending and then we will see if we can talk.’ It happens frequently.”

This would account for the study’s finding that heavy-hitting brands like Apple, Google and the big automakers account for fully 30 percent of placements, with smaller brands shut out from the opportunity.

As it matures, it seems both sides of the product placement equation are becoming more savvy and increasing their expectations—ultimately leading to fewer placements. That’s good for everyone involved from brands to producers to audiences, and even Emily Nussbaum.

Product Placement

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