The professionals of Comp Edge Media are often asked .... What is Product Placement and how does that work?

The intent of this page is to help people from all walks of life, understand the meaning of Product Placement & Brand Licensing.

Introduction to How Product Placement Works

The latest trend in advertising is to make it, well, less advertorial. The tendency is to move away from in-your-face ads, where the product is the star, to mini-movies­ or quasi-documentary vignettes that feature "real-life scenarios" with the product(s) hovering in the background. Some would argue it's a sort of "art imitating art imitating life" scenario -- where ads are imitating the practice of product placement.

Photo courtesy Amazon.com
The DeLorean played a prominent role
in the "Back to the Future" movies. See more movie making pictures.

This may seem a bit confusing, but really, it's quite simple. The majority of us are getting tired of ads. Today's consumer is inundated with advertising everywhere: television, radio, billboards, magazines, buses, newspapers, the Internet... And these are just the usual suspects. More and more ad-space is popping up every day. From people walking down the street wearing signs, to flyers on our cars and in our mailboxes, to ads on the ATM screen as we wait for it to dispense our cash -- we see ads all day, every day.

Even television networks that depend on advertising dollars to stay in business know that it can be useful to ditch the interruptions and present a show without ads from time to time. The ABC network did it for "Gideon's Crossing" in 2000 and for "Alias" in 2001. FOX did it for its hit series "24" in 2002.

What is Product Placement?

Product placement is something that dates back to at least the early 1950s when Gordon's Gin paid to have Katharine Hepburn's character in "The African Queen" toss loads of their product overboard. Since then, there have been countless placements in thousands of movies.

Think about it. You can probably remember quite a few examples. One of the most commonly discussed is the placement of Reese's Pieces in the movie "E.T." Originally intended for another product (they melt in your mouth, but not in your hand), this prime spot essentially catapulted these tiny peanut butter morsels into mainstream popularity. A slightly more recent and easily as effective example is the placement of Red Stripe, a Jamaican-brewed beer, in the movie "The Firm." According to BusinessWeek Online, Red Stripe sales saw an increase of more than 50% in the U.S. market in the first month of the movie's release.

Now that you have an idea of what product placement is, let's take a look at some of the basics involved in leveraging a product placement arrangement.

Have you ever watched a television show or a movie and felt like you were watching a really long commercial? If so, then you've been the victim of bad product placement. There's certainly a line that can be crossed when presenting brand-name items as props within the context of a movie, television show, or music video. Clever marketing folks try never to cross that line. They want their products to be visible within a scene, but not the focus. The product needs to fit, almost seamlessly (almost being the key word here) into the shot and context of the scene.

When done correctly, product placement can add a sense of realism to a movie or television show that something like a can simply marked "soda" cannot.

Photo courtesy Isabella Vosmikova/FOX

Perhaps the producers of "24" did not find a phone company that wanted to sponsor this episode.

Realistic Product Placement

A worldwide trend in advertising, product placement is a vehicle for everything from foodstuffs to electronics to automobiles. So, how does it work, exactly? It's actually pretty simple. Basically, there are three ways product placement can occur:
  • It simply happens.
  • It's arranged, and a certain amount of the product serves as compensation.
  • It's arranged, and there is financial compensation.

If the Shoe, Shirt, Car or Soda Fits...Sometimes product placement just happens. A set dresser, producer, director, or even an actor might come across something he thinks will enhance the project. Usually this has to do with boosting the level of credibility or realism of the story being told. One example can be found in the surprising use of a can of RAID -- an ant killer made by the SC Johnson company -- in an episode of the popular HBO series "The Sopranos." The poisonous prop was used in a particularly violent fight scene in the show. According to an article in USA Today, Therese Van Ryne, a spokeswoman for SC Johnson, said the company was not approached about the use of their product and they would not have given it a thumbs-up.

For illustrative purposes throughout the rest of this article, we can create a less controversial scenario. Let's say the main character in a program or movie is an unmarried, successful, well-travelled architect in his thirties. From this description, it's easy to start thinking up things to enhance the feel of this character. Maybe he'd drive an SUV -- the four-wheel drive would come in handy when visiting building sites. He'd read particular magazines, drink certain wines, eat certain foods... In making the character's life seem real, products necessarily come into play.

Repo Man
In the 1984 cult classic "Repo Man," genericized foodstuffs and other consumables rule. With plain blue and white labels that simple read "Food," "Cigarettes." "Whiskey," and "Beer" appearing in most scenes, it's obviuos that the producers had almost no luck with product placement deals.
The one uber-evident product that is placed in frame after frame are tree-sha­ped air fresheners. These fragrant props hang in just about every moving vehicle in the movie -- even the police motorcycle has one. According to The Internet Movie Database, the company that makes the air fresheners was one of the sponsors of the movie.

Arranged Product Placement

As we mentioned earlier, arranged product placement deals fall into two categories:

  • Trade-off of integration or placement for a supply of product
  • Financial compensation for placement or integration

The most common type of deal is a simple exchange of the product for the placement. Using our existing example, let's say the production team wants The Architect to display a quirky affinity for a particular type of beverage. This will come across rather strongly over the course of the program (because the character even collects the drink's labels) -- which means the chosen product could get a lot of air time. It turns out that someone on the crew knows someone who works for Honest Tea. The movie people approach the Honest Tea folks with a proposal and a deal is made; in exchange for the airtime, the cast and crew are provided with an ample supply of various Honest Tea drinks at work.

Sometimes, a gift of the product isn't an appropriate form of compensation, so money powers the deal.

Imagine that the marketing team at Tag Heuer has heard about this project and feels that, given the starpower of the actor playing The Architect, this project would be a great vehicle for showcasing its product. Someone from Tag Heuer approaches the set dresser with a financially lucrative proposal. Eventually, they come to an agreement. Consider this scene: Our male character (The Architect) stands outside a movie theater waiting to meet a friend. The camera pans down to show a slight tap of the actor's foot. Next, it moves up and zooms in to show him checking his wristwatch for the time. After switching from the actor's face to the face of the wristwatch, the camera pauses just long enough for you to really see the wristwatch. He's wearing a link-style, stainless steel Tag Heuer luxury sports-watch. The camera pans out and swings around, introducing a beautiful woman into the scene... During the next hour of the program, the wristwatch casually appears in several scenes.


Both teams are happy -- the integration of the Tag Heuer product is a success. Remember, the advertised product's role is to be part of an ensemble cast rather than the (obvious) star. Tag Heuer manages to reap the benefits of conventional advertising without being overly obvious or intrusive to the audience/consumers.

Getting the Job Done

Before product placement really saw a surge in the mid 1980s, it was pretty much a DIY effort. Now there are specific corporate positions and entire agencies that can handle the job. Some larger corporations will dedicate personnel to scout out opportunities for product integration or placement within films, television shows and even games and music. Comp Edge Does this for the Production.

It's a Miss!

Like lots of advertising methods, product placement can be hit or miss. One particular example of product placement gone awry is the Reebok/Jerry Maguire fiasco. Reportedly, Reebok had a placement agreement to integrate one of its commercials at the end of the film "Jerry Maguire." The commercial didn't make it to production -- but something else regarding Reebok did. In a pivotal scene, Cuba Gooding Jr.'s character makes disparaging remarks about the company.

Product Placement in the Movies

The next time you watch a movie, try to keep an eye out for products or brand-names you recognize. It's highly likely that you'll see one of the major soft drink companies represented. Is it Coke? Pepsi? Snapple? Once you've spotted something, see how many other scenes include that product. You'll start to see a trend. "How," you'll wonder, "can the actor hold the Coke can just the right way every time so that the logo is perfectly visible?"
Take a minute to comb through your movie memories. You'll probably recall at least a few of these now-famous product placements:

Product placement in movies is so ubiquitous that it's even become something to parody on the big screen. Two movies that do a good job of this are "Wayne's World" and "Josie and the Pussycats." In Wayne's World, the two main characters hawk a variety of stuff, including Nuprin, Pepsi, Pizza Hut and Reebok. The amusing part about this is that the product placement vignette takes place while the characters Wayne and Garth are lambasting the very thing they're doing. As Wayne says "Contract or no, I will not bow to any corporate sponsor," he is opening a Pizza Hut box and pulling out a slice of pizza. The camera lingers on the Pizza Hut logo and Wayne, holding the slice of pizza lovingly beside his face, smiles straight at the camera.

The movie "Josie and the Pussycats" takes the joke several steps further. A send-up on the music industry, "Josie and the Pussycats" manages to satirize name-brand integration throughout the film. To get an idea of just how saturated with brands, logos and products this movie is, here's a taste of what you can see in just the trailer alone (Keep in mind that the trailer is only two minutes and twenty-five seconds long!): America Online, American Express, Bebe, Billboard Magazine, Bugles, Campbell's Soup, Coke, Entertainment Weekly Magazine, Evian, Ford, Gatorade, Kodak, Krispy Kreme, McDonald's, Milky Way, Motorola, Pepperidge Farm Cookies, Pizza Hut, Pringles, Puma, Ray-Ban, Sega, Starbucks, Steve Madden, Target, and T.J. Maxx.
Cars in the Movies
Movie / Car
Herbie the Love Bug / Volkswagen Beetle
RoboCop / Ford Taurus
Back to the Future / DeLorean
Smokey and the Bandit / Pontiac Trans Am
The World Is Not Enough / BMW Z8
Laura Croft: Tomb Raider / Jeep Wrangler Rubicon
Photo courtesy DaimlerChrysler

According to a 2003 Chrysler press release, "The Jeep Wrangler Rubicon is the most capable Jeep ever built, so the heroic and extreme environment in which Lara Croft uses her custom Wrangler Rubicon in Tomb Raider is accurate... This is more than just a product placement. We have created a 360-degree integrated marketing campaign around the movie and the debut of the Wrangler Rubicon Tomb Raider model."


The "I, Robot" Movie Car: Audi RSQ

In 2004, product placement reached a new level with Audi's involvement with the movie
"I ROBOT."

Photo courtesy Audi.com
Will Smith and the Audi RSQ

The Audi RSQ concept car plays a central role in the futuristic action film. So how is this different from the placement of the BMW Z8 in "The World is Not Enough" or the DeLorean in "Back to the Future"? Audi didn't just place the RSQ in the movie; Audi created the RSQ for the movie.

Photo courtesy Audi.com
The Audi automotive brand has been involved in movies before. Audis have been featured in such movies as "Ronin," "The Insider," and "Mission Impossible II." This time, though, it wasn't just a question of promoting the right car in the right movie. It was a full-blown custom job. And since this custom job was also a product-placement job, the car had to fit seamlessly into the movie world while still screaming "Audi."

Photo courtesy Audi.com


Photo courtesy Audi.com

The RSQ is not just a movie car -- those have been done before, with movie designers creating a car and simply attaching the highest-bidding car logo to the hood. Audi put the same amount of thought and detail into designing the RSQ as they do into designing any other concept car. It has a fully developed interior and exterior.

Photo courtesy Audi.com

The carmaker worked with the director of the movie, Alex Proyas, and with set designers to achieve a concept that both Audi and the movie people were happy with -- Audi designers toured the movie sets and got their hands on the futuristic props used in the film. The result of the collaborative effort is the futuristic RSQ sports coupe, featuring, most notably, spherical wheels, mid-engine design, butterfly-action doors, a color-changing, luminescent paint job and a low, sleek profile.

Photo courtesy Audi.com
In the creative partnership between a carmaker and Hollywood, we may be looking at the future of this type of advertising -- name-brand products that are not simply chosen to fill a role that benefits both parties, but products that are created to fill that role.

What is Brand Licensing

Brand licensing is the process of creating and managing contracts between the owner of a brand and a company or individual who wants to use the brand in association with a product, for an agreed period of time, within an agreed territory. Licensing is used by brand owners to extend a trademark or character onto products of a completely different nature.

Brand licensing is a well-established business, both in the area of patents and trademarks. Trademark licensing has a rich history in American business, largely beginning with the rise of mass entertainment such as the movies, comics and later television. Mickey Mouse's popularity in the 1930s and 1940s resulted in an explosion of toys, books, and consumer products with the lovable rodent's likeness on them, none of which were manufactured by the Walt Disney Company.

This process accelerated as movies and later television became a staple of American business. The rise of brand licensing did not begin until much later, when corporations found that consumers would actually pay money for products with the logos of their favorite brands on them. McDonalds play food, Burger King t-shirts and even ghastly Good Humor Halloween costumes became commonplace. Brand extensions later made the brand licensing marketplace much more lucrative, as companies realized they could make real dollars renting out their equity to manufacturers. Instead of spending untold millions to create a new brand, companies were willing to pay a royalty on net sales of their products to rent the product of an established brand name. Breyers yogurt, TGI Friday's frozen appetizers, Dodge power tools, and Lucite nail polish are only a fraction of the products carrying well-known brand names which are made under license by companies unrelated to the companies who own the brand.
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