What are the television business and regulatory factors that have encouraged product placement and why do some broadcasters and national advertisers resent it?
Product placement is the combined effort from entertainment program producers and sponsors in which branded commodities are embedded in the content with the intent of influencing consumer behavior in favor of the sponsor. In other words, it could be defined as “the purposeful incorporation of a brand into an entertainment vehicle”. This vehicle could take the form of television, radio, video games, music records and even the written word (Russell & Belch, 2005).
Although there is a symbiotic relationship between the advertiser and the producer, the best interests of audience is left out of the equation. Another concern this phenomenon has raised is the compromising of artistic merit for commercial success. This industry had grown to a $3.4 billion industry as on 2005, with as many as 1,000 products being promoted through this channel. These numbers pertain to the United States alone. Needless to say, the worldwide figures are even more staggering. There is an ongoing debate across the world on the pros and cons of product placement. This essay presents some of the salient points in this debate (Moorman, et.al., 2005).
The concept of product placement is nothing new in the world of advertising. Nevertheless, its magnitude and pervasiveness had grown exponentially in the last 20 years. Members of the Entertainment Resources and Marketing Association form the core marketing personnel of the placement-industry. The Association also acts as the mouth-piece for the placement-industry. The mission statement of the Association contains the phrase “to highlight the practice and establish a code of ethics” (Russell & Belch, 2005). The association is doing an excellent job in highlighting the practice. But, this essay is primarily concerned with the “establish a code of ethics” part. Started in 1991, ERMA has had 16 years to design a framework of ethics. Conventional wisdom instructs us that high profits and elevated ethics don’t go together. Given the impressive profits made by the public relations industry, the implication is that ethics have been neglected. The rest of this essay will look at the evolution of legislations and industry standards pertaining to product placement, by analyzing and contextualizing government regulations and industry sentiments. Also, the United States is taken as the subject country of investigation as the length of the essay only allows limited scope (Moorman, et.al., 2005).
The concept really took off in the 1980s as a result of its success in the movie E.T. The placement in the film triggered unprecedented growth in sales of Reese’s Pieces. Prior to 1980s the industry was somewhat disorganized and industry practices were haphazard. Since the start of the 1980s though, the product placement industry and its parent public relations industry grew to become major players in commerce, economy and politics. The following snippet helps us understand the size of the placement-industry:
“BMW invested an estimated $20 million on the placement campaign surrounding the launch of its Z3 roadster; the campaign included prominent exposure in the James Bond film Golden Eye, as well as in most of the film’s, trailer and television advertisements. Spielberg’s Minority Report contained interactive advertising billboards within the film promoting its placement sponsors, including Mokie and Lexus – who reportedly paid $5 million to $7 million each to promote their placements. Marketers are now moving more aggressively, seeking prominent roles for their brands in feature films.” (Karrh, 2003)
The bigger the industry, the more influential it is in affecting public opinion, consumption patterns and consumer behavior. Given such a pervasive nature of industry impact, it is all the more relevant that its business practices are scrutinized for fairness and ethics. The best way to do this is to study the regulatory framework within which the industry operates and the factors affecting regulations in the first place (Russell & Belch, 2005).
The two primary decision makers in the industry are the placement agencies and content producers. To gain a better understanding of ERMA in particular and the industry in general, a survey was conducted in 2003 by James Karrh and his team. This survey gives us a sense of where the industry is presently and what could be expected in years to come. One of the key areas of discussion is the blurring of distinction between a) content created for purposes of information dissemination and b) content created for purposes of persuasion. With respect to regulation, these two content categories in and of themselves does not invoke introspection and debate. Where regulations apply, quite rightly so, is in cases where “persuasion/propaganda” is integrated into a facade of “information”. When this happens, what we see is an act of sophisticated deceit. Given the far-reaching implications of such a phenomenon comprehensive research is warranted. As a result, these days, the research is extended to the study of “cognitive-response, attitudinal-formation, and involvement perspectives, etc.” (Moorman, et.al., 2005)
Content that has the potential to reach a large audience (for example movies) is an attractive medium for brand promotion. The product-placement industry’s success is attributable to this “integrated marketing communication” approach. In the words of an industry analyst,
“the impact of product placements and other integrated marketing strategies can be conceptualized as a ‘consumption constellation’ whereby ‘symbolic interdependencies’ of products, brands, or activities come to signify or perform social roles for audience members who use or avoid these products as means of gaining status or avoiding stigmatization.” (Karrh, et.al., 2003)
Advertising agencies found this synergy a very attractive proposition. The members of the industry and their sponsors were determined to keep open these lucrative opportunities. This explains why no amount of regulation ever seems to bring desired results (especially in the United States). More importantly, for every bill that gets ratified in the Congress, many more don’t see the light of day (Katz, 1993).
There was an interesting study published previously in the year 2001, again by James Karrh and his team. A sample of college going film enthusiasts in the United States, France, Austria and Singapore were polled on their “views on the acceptability and ethics of placements.” A majority of American participants saw placements as a form of paid advertising (not many saw it as a medium of creative expression). This is an expected response, as anyone with basic education and little common sense would have figured the real proposition of product-placements (Charlesworth & Glantz, 2005). But more significantly, a majority of American subjects stated that they were less concerned with the ethical aspects of placement and don’t care if proper regulations and restrictions are imposed by the government. They were also more open to buying products placed in the film compared to subjects from other countries. We can trace the link between the three components of policy making: public pressure/support, response from legislators, regulations pertaining to commercial activities. In this particular case, weak pressure from public led to complacent repose from legislators, which in turn led to commercial exploitation and opportunism. But this is not the complete story. After all, the survey was confined to one community (college students) and one age-group. So, inconclusive as the r results may be, it is an indicator of the general tendency (Karrh, et.al., 2003).
Surveys were also taken with members of the product-placement industry as participants. When asked about the public debate over the ethics of this practice, the responses were diverse but none too encouraging. The following some of the opinions expressed: