Product Placement Arrangements

Product Placement Arrangements

The origins of product placement can be found in the 1930’s, when US tobacco companies paid movie stars and sporting heroes to endorse their brands. From then until the 1970’s, some product placement arrangements took place, in which goods were supplied on the basis that they would be featured in movies (Balasubramanian et al., 2006). However, the nature of these arrangements changed in the mid-1980’s with the establishment of specialist product placement agencies, which were in charge of negotiating agreements between suppliers and moviemakers. The main purpose of product placement was to help companies benefiting from brand exposure, while the movie producer would gain financial support, and increase its movie authenticity. Ever since, the placement of products in movies has become an important element of consumer marketing programmes and started to offer an alternative to more traditional forms of marketing communication, which are proving to be more costly and less effective in reaching target audiences (Balasubramanian et al., 2006; Morton and Friedman, 2002).

This proposed literature review will refine and redefine the research questions raised by these gaps in the literature by embedding those interrogations in larger robust empirical traditions. This review comprises academic journal articles which propose relevant research results on spectators’ attitude towards product placement and their potential effects on brand performance, supplemented with valuable knowledge issued from other research studies. The significance of the literature findings has been determined by whether the scope comprised product placement information and consumers’ perception, understanding and use of it. This focused examination of these selected articles is reviewed in regards to the theoretical framework used, the methods employed and the knowledge obtained.

1. Product Placement and its environment

1.1.) How could product placement be defined?

1.1.1) Several definition of product placement

In spite of a significant increase in the research and practice of product placement, an aspect not formally recognised in these studies is the respondents’ understanding of the product placement concept (Lees et al., 2008). As a matter of fact, several definitions co-exist within the academic literature (see Appendix 1): Balasubramanian (1994) defined it as “the planned entries of products into movies or television shows that may influence viewers’ product beliefs and/or behaviours favourably” whereas product placement in movies, according to Gupta and Gould (1997, p. 37), “involves incorporating brands in movies in return for money or for some promotional or other consideration.” The respondents’ answers from this two studies, cited above, may differ in so far as they were instructed to consider product placement differently: compared with Balasubramanian viewpoint (1994), Gupta and Gould’s definition (1997) starts introducing clearly the notion that product placement serve promotional purposes. Therefore, respondents may more perceive, in this case, the ethical issues raised by hiding commercial messages within the entertainment they use to enjoy because of the absence of such traditional advertising slogans. That’s why, in this research, product placement will be defined as “the paid inclusion of branded products or brand identifiers, through audio and/or visual means, in a movie or in a television program for promotional purposes” (Karrh, 1998; d’Astous and Chartier, 2000). Furthermore, although the terms “brand placement” and “product placement” are often used synonymously, in reality, “brand placement” includes only branded products whereas “product placement” has a larger signification since it comprises brands, organizations, place, generic products… (Morton and Friedman, 2002). Even if some researchers may find that “brand placement” represent a more accurate description because brands are placed rather than specific products (Babin and Carder, 1996), this proposed research will keep using the term “product placement”.

Definitions of product placement, like its practice, have changed over the recent past years. One key change in these definitions is the acknowledgment that product placement occurs in media other than film or television. However, more significantly, since d’Astous and Ségun (1999) attempted to classify different types of product placement, scholars have used the word ‘integration’ in their definitions. Thus, Russell and Belch (2005) have enlarged the product placement definition as “the purposeful incorporation of a brand into entertainment vehicle”. This perspective reflects the understanding of product placement as “branded entertainment”, as it is presented by Hudson and Hudson (2006), where the boundary between advertising and entertainment does not exist anymore (see Apendix 2). For the purposes of this article, branded entertainment will be defined as “the integration of advertising into entertainment content, whereby brands are embedded into storylines of a film, television program, or other entertainment medium” (Hudson and Hudson, 2006).

1.1.2) Product placement as an “hybrid” communication tool

Balasubramanian (1994) conceptualised product placement as a “hybrid” marketing technique because it ‘projects a non-commercial character’ and characterizes the blurring of the lines between advertising and entertainment. Consequently, if product placement cannot be classified within the traditional communication mix tools, where does product placement fit into the broader integrated marketing communication (IMC) context? (Vand der Waldt, 2005). Marketing communication is defined by Burnett and Moriarty (1998) as “the process of effectively communicating product information or ideas to target audiences”. According to Du Plessis et al., (2003) there are eight promotional elements in marketing communication from which marketers can select to increase the awareness and sales of their products and brands, namely advertising, personal selling, sales promotion, publicity, public relations, sponsorships, direct marketing and new media marketing. Similarly, the main objective of product placement is to increase consumer awareness, build positive consumers’ preferences and finally, influence consumers’ purchasing decisions (Fill, 1995; D’Astous and Chartier, 2000). As a result, Fill (2002) claimed that product placement was a valuable asset for programme sponsorships category because it allows the sponsor’s product to be seen with the sponsor’s name in plenty of different places and media. Though, Kitchen and De Pelsmacker (2004) contextualised more precisely product placement as a communication vehicle within the IMC domain under the promotional element of “broadcast sponsorships” (see Appendix 3). In other words, a general understanding of sponsorships may help marketers and practitioners to make an informed choice in selecting product placement as a communication vehicle.

It results from the above contextualisation of product placement in the IMC domain a more orderly structure of product placement protagonists namely companies, placement agents and program producers (Karrh et al., 2003) (see Appendix 4). Agents function as middlemen between marketers and producers, typically working on a retainer basis (Pardun and McKee, 2000). Studios send scripts to clients whose permissions are legally required to use these brands in their scenes, either directly or through the intermediary of product placement agencies. While the movie directors and producers have artistic objectives for using placements, companies seek to enhance their brand image and influence positively consumers’ brand attitude (Karrh et al., 2003).  Moreover, given the substantial growth of product placement, agent intermediaries have become much more important since they facilitate the accomplishment of product placement deals. However, Russel and Belch (2005) pointed out that, because placement agents are not trained as brand managers, their criteria for deciding whether one of their clients’ brands is appropriate for a movie is primarily based on the opportunity for the product category. In brief, the product placement industry has evolved from a simple means for studios to cut costs and marketers to expose their products to a more sophisticated industry in which product placement agencies are increasingly assuming the role of traditional advertising agencies (Lehu, 2007). As this practice gains acceptance and interest among practitioners, product placement is being treated less as a “hybrid” marketing technique and starts being increasingly integrated with other communications mix components.

1.1.3) Typologies and modalities of product placement

Russell’s Tripartite Typology of Product Placement, which was the first established categorization of this marketing technique, recognizes three dimensions: visual, auditory, and plot connection (Russell, 1998) (see Appendix 5). First, the visual dimension refers to “the appearance of the brand on the screen”, as well referred as “screen” placements. However, Brennan, Dubas, and Babin (1999) differentiated two levels of visual placements which are respectively “on-set” placements (those that are clearly displayed) and “creative” placements (those appearing in the background). The opportunity for spectators to process visually those placements captures the extent to which circumstances at brand exposure are favourable to brand processing (MacInnis and Jaworski, 1989; MacInnis, Moorman, and Jaworski, 1991). This is influenced by a placement’s prominence, which take into account the size of the product or logo, centrality in the screen, integration into the plot, centrality to the plot, number of mentions, duration on screen, strength of the placement and/or modality (Auty and Lewis, 2004; Babin and Carder, 1996; Gupta and Lord, 1998; Law and Braun, 2000; Russell, 2002). Gupta and Lord (1998) found that prominent placements, that is to say, a brand shown by itself in the foreground, with longer exposure time, generated higher brand recall than more subtle placements. Furthermore, exposure duration positively influenced brand recognition, but only for prominent/on-set placements (Balasubramanian et al., 2006). Secondly, the auditory or verbal dimension refers to “the brand being mentioned in a dialogue” during the movie. Such “script” placements also have varying degrees, depending on the context in which the brand is mentioned, the frequency with which it is mentioned, and the emphasis placed on the brand name (Russell, 1998; 2002). Finally, the plot connection dimension refers to “the degree to which the brand is integrated in the plot of the story” (Russell 1998). Whereas lower plot placements do not contribute much to the story, higher plot placements take a major place in the storyline such as James Bond with his Aston Martin or The Transporter with his Audi A8.

From an information processing perspective, script, screen, and plot placements differ in the types of processing they require. In his study, Paivio (1971) was the first researcher who distinguished these different visual and verbal coding processes and identified within the recognition memory imagery as a “parallel processing system” whereas verbal processes tended to be associated with “serial processing”. That’s why visual images and verbal units involve different memory codes. This theory is enclosed within the “coding redundancy hypothesis”, which states that “memory increases directly with the number of alternative memory codes available for an item” (Paivio 1971, p. 181). If visual and audio dimensions activate different processing codes, the consequences for screen and script product placements become obvious (Russell, 1998). On the other hand, a plot placement that relies generally on placing the brand both on the screen and in the conversation provides an opportunity for both verbal and visual encoding, while the other situations would likely activate only one form of encoding. Steortz (1987), using Paivio’s coding redundancy hypothesis, found that the average recall was significantly higher when movie placements involved both visual and verbal product identification. “Increased availability of both codes increases the probability of item recall because the response can be retrieved from either code” (Paivio 1979). There is evidence that dual-mode placements have more impact upon viewers’ memory for the brand than do placements executed through one mode alone. In research specific to placement, unaided recall of a combined visual plus verbal placement was significantly higher than that of visual alone (Sabherwal, Pokrywczynski, and Griffin, 1994). However, despite the findings of Paivio’s research (1971; 1983; 1986) which tend to support the superiority of visual over verbal mediators, when they are not simultaneously available, other academic researchers’ results do not converge to the conclusion that screen placement is more valuable in terms of its mnemonic ability and decoding accuracy. Indeed, Gupta and Lord (1998) found that an audio mention of the brand without a visual depiction produced a higher recall rate than did a visual placement without audio reinforcement. To reach this conclusion, their framework relies more on the social learning paradigm which states that “most of the cognitive processes that regulate behaviour are primarily verbal rather than visual” (Bandura, 1971, p. 18). The findings of these studies may suggest a hierarchy of memory effects according to placement modality of a visual-verbal combination, followed by verbal only and then visual-only placements. These significant differences suggest that product placement effectiveness may well be a function of individual processing styles (Russell, 1998).

Nonetheless, previous research cited above on product placement modality has focused primarily on encoding differences between visual and auditory information. Often modality is treated as a perceptual variable and related to particular encoding mechanisms and their associated memory retrieval processes (Unnava, Agarwal, and Haugtvedt, 1996). Only have few researchers, like Tavassoli (1998) expanded Russell’s and Paivio’s analysis of modality effects beyond perceptual levels. The audiovisual context of product placement provides the opportunity to investigate a previously unexplored difference between auditory and visually presented information: their expected level of meaningfulness. This perspective offers the possibility to identify that the visual and auditory channels differ in the amount of meaning that they carry. As a matter of fact, the visual channel serves to create the context in which the story takes place (Solomon and Englis, 1994; Solomon and Greenberg, 1993) whereas the auditory channel carries only the script of characters of a movie. Accordingly, because individuals can process auditory information in a movie without watching it, the auditory modality serves as a “conveyor of semantic information through speech” (Rolandelli et al., 1991). In fact, as compared with visual stimulation, auditory information is often characterized by its greater intrusiveness and intrinsic alerting properties (Posner, Nissen and Klein, 1976). These modality characteristics become essential as meaningful stimuli are integrated in a person’s cognitive structure (Lehnert, 1981), are processed more deeply, and thus generate greater recall (Craik and Lockhart, 1972) and elaboration efforts. The third dimension of the product placement framework, plot connection, also characterizes a dimension of meaning since higher levels of plot connection characterize instances when the brand makes a significant contribution to the story and will thus facilitate memory (Russell, 2002). To sum up, this Tripartite Typology of Product Placement allows this dual focus by determining not only how a placement is cognitively processed and thus whether it will be recalled but also how it affects individual consumers’ attitudes.

1.2) Why marketers decide to use product placement strategy?

1.2.1) Advantages of product placement

There seem to be three main reasons why marketers judge product placement in movies as an attractive communication strategy (Brée, 1996; D’Atsous and Chartier, 2000). First, watching a movie is considered as a high attention and involving activity (minimal distraction possibilities, significant efforts to choose a movie, money spent for tickets…) which leads to high level of consumers’ attention, as opposed to just listening to television programs, as well as a high involvement with the characters and the story during the movie. Second, Belch and Belch (2001) and Fill (2002) have highlighted the possibility of high exposure to the product and the brand since the levels of impact can be high because, on the one hand, successful movies can attract millions of people and, on the other hand, because the lifetime of a film is estimated at three to five years when this is combined with DVD releases and television broadcasting of the feature film (Karrh, 1998; Lehu, 2007, Van der Waldt, 2005). Therefore, from a strict cost per viewer point of view, the cost of placing products in feature films, more precisely, the cost per minute can be very low in comparison to other media, due to the high volume of exposure it generates. Finally, product placement represents natural, non aggressive and non-persuasive way of promoting a branded product (D’Atsous and Chartier, 2000). Indeed, unlike traditional advertising messages, product placement provides a venue where products can be portrayed realistically in the context of a movie scene (Curtis, 1999). Thus, it may symbolize a way of combating growing consumer resistance to advertising and new technologies that allow people to avoid watching commercials (Russell and Belch, 2005).

In brief, De Lorme and Reid (1999) have summarized these numerous key advantages for marketers when using product placements: “the potential to reach captive and fragmented audiences, to provide relatively greater reach than traditional advertising, to demonstrate brand usage in naturalistic settings, to add realism to film (Johnstone and Dodd, 2000), to offer a relatively cost-efficient communication tool and an alternative to traditional advertising media options”. In addition, product placements could also be a support for other traditional media if the brand placed in the feature film is supported by additional promotional efforts. Source association represent another advantage of product placements, even if it has not been mentioned by De Lorme and Reid (1999). As a matter of fact, from a movie viewers’ perspective, the product’s association with a celebrity actor can enhance the inherent persuasiveness of the placement message (Morton and Friedman, 2002). Despite the growing body of research establishing the positive benefits of product placement, several other studies have put the emphasis on the fact that, for the advertiser, product placement must not only lead to increase awareness and a more positive attitude towards the product or brand placed, but have to ultimately, as in the case of Reese’s Pieces in the film E.T, lead to a purchase (Karrh, 1995). So far, the average recall of products that were placed in feature films showed approximately only 38% the next day (Gupta & Lord, 1998, in Belch & Belch, 2001; Lehu, 2007). Research conducted to measure product placement effects has generated mixed conclusions about the reliability of its investment return (Steortz, 1987; Morton and Friedman, 2002).

1.2.2) Disadvantages of product placement

Although product placements bring several benefits to marketers, there are still strong criticisms against this practice. Belch and Belch (2001) have underlined some key disadvantages. At first sight, product placement seems to involve fewer costs than traditional advertising media such as a 30-second television spot. But, while the cost per minute may be low, the absolute cost of placing a product may be high, from a few thousand dollars to several million of dollars, especially when product placement are supported by additional advertising campaigns (e.g. Sony products in the James Bond movies) (Lehu, 2007). Furthermore, even the time of exposure may be high because of the long lifespan of movies, it does not guarantee that viewers will notice and recall the branded product after having watched a movie (Gupta and Lord, 1998). If the product is not featured prominently, the advertiser runs the risk of not being seen by the viewers. In this context, the appeals remain limited to source association with actors’ endorsement and enjoyment atmosphere created by the movie itself (Van der Waldt, 2005). Besides, advertisers have little control over when and how often the product will be shown in the movie (Fill 2002; Russell and Belch, 2005). If product placements are too intrusive or produce a negative image of the brand, film attendees may develop negative attitudes towards the brand. Or some products may appear in film that are disliked by the audience or create a less than favourable mood as it was the case in the film Transporter 3 in which the Audi A8 car become the principal enemy of the main character (Lehu, 2007). Regardless of the above criticism against the use of product placements as a viable communication vehicle, the considerable advantages cited in the previous section still explain why marketers may prefer product placement to traditional advertising or incorporate product placement in their global communication strategy.

2. Consumers’ attitudes towards product placement in cinema movies

2.1) Spectators’ attitudes towards product placement

2.1.1) The Concept of attitude

“Attitudes are predispositions towards action made up of emotional reactions (affective), thoughts and beliefs (cognitive), and actions (behavioural) components about or towards people and things used to evaluative of people, objects and ideas” (Schmoll et al., 2006, p. 35). The study of the different components of attitude, included in the Hierarchy of Effects Model, that is to say, the cognitive, affective and conative phases, follows the mental stages that consumers must pass through before to decide to make any purchase, (Belch and Belch, 2004) (see Appendix 6). Studying the effects from product placement corresponding to the three broad classes of the Hierarchy of Effects Model permits to predict the possible outcomes on movie viewers’ attitudes (Balasubramanian et al., 2006). Uncles et al. (2003) study suggests there is a rich literature supporting the continuum attitude-drives-behaviour. Indeed, the researchers focusing on attitude effects declare to boost sales by enhancing customers’ beliefs about the brand and strengthening their emotional commitment attached to their brand value. Conversely, “advocates on the behavioural side suggest that most consumers have split-loyalty portfolios of habitually-bought brands and marketing communication acts more as publicity that sustains awareness and offers reinforcement, rather than as highly persuasive information that fundamentally changes their attitudes and/or levels of commitment” (Ehrenberg et al. 1998, in Uncles, Dowling, Hammond 2003, p. 297).

Having noted that advertising is widely recognized as a form of persuasion, defined as “symbol manipulation designed to produce action in others” (Brown 1958, p. 299, in Schmoll et al., 2006), once extended to product placement, advertisers desire that their products be placed positively within the storyline of the movie in order to associate positive attitudes to their brands and, ultimately, carry forward these positive attitudes to product purchases (Morton and Friedman 2002). However, research on consumers’ attitudes towards product placement also suggests there is no straightforward relationship between product placements and self-reported purchase behaviour (Tiwsakul, Hackley and Szmigin, 2005). For instance, Lehu and Bressoud (2007) found that only 34% of their respondents recalled the day after at least one brand placed in the movie they just watched. In addition, they recall only brands that sound familiar to them or they already had a positive experience with, whether this recall effect came from the visual or/and verbal placement modality (Karrh 1994; Brennan et al., 1999). It cannot be ignored that plenty of academic researchers have demonstrated that attitude does generally influence branded product recognition, and to a certain extent, have an impact on customers’ purchase intentions in so far as the product or the brand familiarity is established (Babin and Thompson-Carder, 1996; Karrh, Firth and Callison, 2001; Gibson and Maurer, 2000; Gould, Gupta and Grabner-Krauter, 2000; Gupta and Lord, 1998; Baker and Crawford, 1995).

2.1.2) General viewers’ attitude towards product placement

Product placement may be now established in practitioners’ minds, but the literature relating to product placement is still in its infancy. Although several researchers have indicated the importance of product placement as an additional element of the promotional mix (Friedman, 1986; Hulin-Salkin, 1989; Rosen, 1990; Elliot, 1992), the first study on audience attitude towards product placement in movies appeared only with Nebenzahl and Secunda’s study (1993). They found that their respondents expressed a positive attitude to product placements and revealed that it may become an “advanced dimension of cinema advertising” (Argan et al., 2007, p. 162). Then, several studies followed focusing on particular aspects of product placement such as types of product used in placements (Sapolsky and Kinney, 1994), the effects of placement type and exposure time on brand recognition (Babin and Carder, 1996; Brennan et al., 1999), the effect of product placement on consumer behaviour (Ong & Meri, 1994; Babin and Carder 1996; Gupta and Lord, 1998), and the semantics employed by viewers (d’Astous & Chartier, 2000).  On the contrary, other researchers examined product placement in terms of its ethical acceptability (Gupta & Gould 1997; Gould et al. 2000; Karrh et al., 2001) and noticed that few of their participants articulated negative opinions due to the ethically questionable “subliminal” nature of product placement and the presence of ethically-charged product placements such as alcohol drinks or cigarettes. The Appendix 7 summarises the findings of recent investigations of viewers’ perceptions of product placement in movies.

Generally, most of these studies reveal that respondents have a positive attitude towards product placement, although a few researchers still indicate the contrary, such as low recall rate or no increased purchase intention. For instance, Gupta and Gould (1997), by examining general ethical concerns about product placements as well as concerns about specific products such as alcohol, guns and tobacco, found that a minority of the American college respondents expressed negative attitudes towards such ethically-charged products. Their findings that product category and individual consumer differences have an impact on product placement acceptability were subsequently corroborated by Gould et al. (2000). However, the impact of different type of product placement strategies on consumers’ attitudes and particularly on their memory, do not always exhibit positive effects. Indeed, D’Atsous and Chartier (2000) showed evidence of both positive and negative effects of product placement in consumers’ eyes. On the positive side, when the placement is positively evaluated because of the presence of the principal actor, viewers’ memory is enhanced, especially if the product is prominently placed and well integrated in the movie storyline. On the negative side, when a placement is assessed as “unacceptable” (e.g. cigarettes) and prominently integrated in the movie, viewers’ memory tend to reject such product placements. Therefore, the ambivalent effects created by prominent product placements show that the prominence of placements, on the one hand, enhances recognition memory, but, on the other hand, decrease the possibility to be recalled if the nature of the product category is ethically questionable (D’Atsous and Chartier, 2000).

While the studies discussed above display interesting results, they are beginning to date and may not reflect today’s consumers’ attitudes towards product placement. Because of the constant evolving emergence of new advertising techniques that marketers use to reach their target market, product placement may not appear in consumers’ minds as “innovative” and “unobtrusive” as it was the case ten years ago. That’s why the following research question seems important to answer:

Research question 1: How do consumers generally react today upon product placements?

2.1.3)Cross-cultural studies on consumers’ attitudes towards product placement

The studies cited above gave a clearer view of college-aged audience consumers’ attitudes towards the practice of product placement, but they were conducted mainly in America, and thus, missing the opportunity to obtain profitable insight into the attitudes of audiences outside America, particularly in those nations that exhibit different cultural traditions such as European and Asian countries. With the exception of Karrh et al. (2001), Richmond (2000), Gould et al. (2000), and Baker and Crawford (1995), most of the studies were conducted in North America. It has been shown that European movie watchers object more than North Americans to brand placement (Hall, 2004), but McKechnie and Zhou (2003) and Karrh et al. (2001) justified the potential of fruitful findings that could be examined in the fast-growing areas of Asia where the diffusion of American movies is growing. Indeed, the group of nations termed “Cultural China”, that is to say, the Republic of China, Taiwan, Hong Kong and Singapore (Frith, 1996), share a set of common cultural values that includes collectivism, moderation, authoritarianism and relative non competitiveness (Martin, 1996). On the contrary, Europeans and Americans promote “materialism” and “hedonism” values as well as a great emphasis on the rights and interests of the individual (Karrh et al., 2001; McKechnie and Zhou, 2003). In spite of a general acceptance of product placement in Asia-Pacific area, compared to their American counterparts, Singaporean and Chinese respondents were less likely to report self-monitoring activity, but had greater concern about the ethical dimension suggested by product placement, and were more supportive of government restrictions on placement activities (Karrh et al., 2001; McKechnie and Zhou, 2003). Therefore, since the Asian population do not seek primarily to achieve self-representational goals, the potential persuasive power of symbolic consumption hidden behind brand placed in movies may not influence their brand attitude (Karrh, 1998).

While it is not very likely that a movie could have multiple international versions based on different versions of product placement, a marketer may include in his marketing decision the cultural factor in order to assess how a globally marketed product would be accepted in all the countries where the movie might be distributed (Gou