Marketing

Ad-free? Think again: The product placement business is only getting bigger

From cars to bags of chips, brands that can’t advertise during shows are showing up within them instead.
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Illustration: Francis Scialabba, Photos: Nacho, Chyno Miranda, Chino & Nacho, Big Little Lies, HBO, Lil Nas X

6 min read

Product placements are all around you, even if you don’t notice them. While many people subscribe to premium streaming services in order to avoid ads, product placements are built into lots of movies and TV shows, from Emily on Emily in Paris wearing Zeus + Dione to The Home Edit using products from The Container Store.

Placements can also be found in music videos and lyrics, not to mention influencer marketing. There’s even talk of superimposing placements onto existing media, like classic movies. In short, this $23 billion business is only getting bigger.

This must be the place

Many product placements start with an agency that navigates the deal. Erin Schmidt works as the chief product placement officer at one of those agencies, BEN. She told Marketing Brew that deals are a two-way street: Brands seek an outlet to place their product, and production teams (or influencers) seek brands to help boost their budgets.

“Anytime [a show is] greenlit, that comes to us,” she explained. “Then for the actual brand moments, we respond and have those conversations with a creator to find the right moments [for integration],” Schmidt said.

Sarah Schrode, head of entertainment and influencer marketing for General Motors, said the car manufacturer has been working with BEN for almost 40 years, placing cars from all four of its car brands: Chevy, Buick, GMC, and Cadillac. One placement that viewers might remember is the Buick Enclave that Reese Witherspoon’s character drives in Big Little Lies. Schrode said the placement led to a 70% increase in brand opinion and a 90% increase in purchase consideration for Buick, according to internal data.

“Those are huge shifts,” Schrode told us. “And we liken that to being aligned with someone like Reese, with her character, and with HBO—that high-level premium content. That’s been really important for us.”

Beyond brand opinion and purchase intent, Schmidt said another key measurement BEN looks at is brand awareness. The next evolution of the industry, she added, will be the ability for companies to track actual sales that come directly from product placements.

Schrode said GM has also worked with BEN to help shape brand image, like with Netflix’s Queer Eye, in which the Fab Five can be seen driving GMC vehicles like the Yukon and Sierra. “[GMC was] really looking for a way to humanize the brand, you know, create an emotional tie with consumers,” she said. “And what better way to do that than on Queer Eye, which has such an amazing storyline?”

Sometimes the inverse is true, and brands may want absolutely nothing to do with a storyline or character. According to Schmidt, part of BEN’s job is to ensure brand safety measures are in place. For GM, that means making sure a character isn’t drinking and driving one of its cars or skipping the seatbelt, for instance.

Often, Schmidt said, brands want product placements to reflect their ideal customer or brand image. “Context is actually the biggest piece here,” she said. “How do you want your brand represented on screen?”

Looking ahead, Schrode said GM wants to increase placements of its electric and self-driving vehicles as consumer behavior shifts. “We really want to use entertainment content to help with that, start normalizing it, start showing people driving EVs and start showing people charging their vehicles instead of going to the gas station,” she said.

All around me are familiar faces, worn out placements

But, do placements actually work? The short answer is yes: A Nielsen study cited by the Journal of Management and Marketing Research found that product placement on TV can raise brand awareness by 20%.

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Plus, sometimes a show or movie’s good enough that we don’t think too hard about it (shout-out to fellow fans of You’ve Got Mail, whose title alone is essentially an ad for AOL).

When viewers do notice product placements, it’s often “cringeworthy,” Beth L. Fossen, assistant professor of marketing at Indiana University’s Kelley School of Business, told Marketing Brew, noting that integrations need to feel natural and not look or sound like ads. She’s found in her research that successful integrations tend to happen earlier in a show, before viewers start to tune products out or get sucked into the storyline.

If a brand achieves that, Fossen said, all parties tend to be happy (or at least neutral). “Advertisers love it and viewers don’t mind it, so that’s sort of a balance of why it’s exploded recently.”

Another reason brands like product placements? TV ad rates are going up, and viewers are switching to streaming anyway, some avoiding commercial breaks entirely. “We as consumers are getting very tough to advertise to,” Fossen said. “We are consistently using ad-free or ad-reduced platforms at higher rates than we’ve ever done before.”

According to Fossen, another reason advertisers like product placements is that viewers are unlikely to fast-forward through parts of a show while streaming. That’s part of the gray area of the industry: Product placement can be sneaky. Without disclosures, some viewers won’t even realize that they’re being advertised to. For example, Fossen said, The Lego Movie could be considered an ad.

Just look at Lil Nas X’s “Rodeo” music video, which BEN worked on in partnership with Frito Lay (spot the Doritos at 1:05). There’s no mention of the brand in the description on YouTube or in the credits at the end.

“In the US, viewers aren’t as privy to [placements], and there aren’t strong disclosure requirements. So we don’t actually know what is a paid placement or [what is] not,” she added. Sometimes, the only way to know is if a brand explicitly markets the placement, like Heineken and James Bond.

It’s different for influencer marketing, where sponsored posts on social platforms typically need to be marked as advertising, per FTC rules. In images from BEN’s influencer campaign with Proximo Spirits, Instagram Stories are clearly marked with hashtags like #ad21+ and brand tags like @1800tequila.

Whether the US will one day require more stringent labeling for other media is TBD. In the meantime, viewers can rest easy knowing they’ll never be marketed to by fake brands like Let’s Potato Chips–even if they hear that they’re “a buy.”

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Marketing Brew informs marketing pros of the latest on brand strategy, social media, and ad tech via our weekday newsletter, virtual events, marketing conferences, and digital guides.