The World: Product placement reaches maturity in the US

Glen Mutel reports on the branded entertainment industry in the US, which is now estimated to be worth $1 billion.

Product placement is under the spotlight in the US following the Federal Trade Commission's decision to investigate a complaint by Commercial Alert, a consumer group led by the former presidential candidate Ralph Nader.

Product placement has been around for decades. Just ask anyone who bought a packet of Marlboro cigarettes after seeing Superman II; if the presence of a Marlboro billboard during the final fight scene looked odd to viewers of the 1980 film (particularly given Superman's animated anti-smoking duties on children's television), that's because the tobacco manufacturer Phillip Morris paid $43,000 for it to be there.

But while product placement is nothing new, Commercial Alert contends that its increasing use in TV shows amounts to little more than stealth advertising. Commercial Alert's solution is for a disclosure to appear at the beginning of each programme and then again each time a product is "placed".

The FTC is yet to rule on the issue but, while the body isn't expected to back Commercial Alert's proposals, the episode has re-ignited the debate over the booming placement industry.

"In the past, product placement was called an 'added value'," the Media Planning Group entertainment director, Richard Linnett, explains. "This meant the placement was a freebie, just an added incentive for an advertiser to buy a spot.

"Today, products are being more aggressively integrated into programming. Networks are asking for extra money for that and so are the producers - it's beginning to grow as a source of revenue."

Attempts to gauge the value of the product placement industry have been difficult because there has been no single form of re-imbursement for such deals.

One company, ITVx, thinks it has found a solution to this problem. The company has introduced what it calls "result-oriented integration", which assesses what advertisers get for their money by determining how many spot ads the placements are worth, based on factors including impact, clarity, appropriateness and recall.

ITVx's chief executive, Frank Zazza, values product placement in the US at around $1 billion. "I think that figure will double, maybe even triple over the next year," he says.

Reality television - enjoying a boom in the US - may well be one factor driving this growth. The competitive, unscripted format of reality shows lends itself to aggressive product placement. Companies are now willing to pay huge sums of money to make their brands the focus of contestant challenges in shows such as Survivor or The Apprentice.

Jak Severson, the chief executive of Madison Road Entertainment, believes this model is just as workable for comedy and drama. He claims that in today's deflated US TV market, writers are willing to work with advertisers to keep their shows on air.

But it's not easy to integrate a brand seamlessly into a scripted programme.

One show that managed it, however, was the US sitcom Seinfeld, Severson claims.

In one famous episode, brokered by Zazza, a character ate a Snickers bar with a knife and fork, sparking a nationwide trend. "I mentioned this ten-year-old example to a recent audience panel and everyone remembered it," Severson says.

"Then I offered £10,000 to anyone who could name one traditional ad they'd seen during an episode of Seinfeld and nobody could.

"When product placement is done this well, it's worth more than you can dream of. When it's done poorly, however, it's worse than if the brand hadn't done it at all."

And, as product placement grows, so does the number of bad examples - the most infamous being The Restaurant, a reality show fully funded by Mitsubishi, American Express and Coors. The Restaurant has become notorious for shoehorning its brands into crudely scripted action sequences.

The hope among advertisers is that the TV market will learn from these examples. "Right now, branded entertainment is an experiment," Linnett explains. "You're going to have bad experiences. But when consumers switch these shows off, it will hurt the pocket books of the producers and they'll be forced to change their approach and improve it."

Meanwhile, no-one's losing sleep over the proposals from Commercial Alert.

"I think they're ridiculous," Linnett says. "To have a little thing pop up and say 'This is an advertisement' is incredibly condescending. Audiences know an ad when they see one. Believe me, Americans may not have taste, but they are not stupid."


The Apprentice - Brands fit well in this business-based show. In one episode, contestants had to design a catalogue for Levi's.

The Restaurant - The reality show featured some clunky placements. In one, the chef Rocco DiSpirito pulls up in a Mitsubishi SUV. One of his staff turns to camera and says: "Wow, a guy who drives a car like that can get anyone!"

Seinfeld - The sitcom featured characters who obsessed over the humdrum details of everyday life and it would have been unrealistic if they hadn't mentioned brand names from time to time.

Friends - In one episode, Oreo Cookies were digitally superimposed on to existing film. Although Oreo missed the show's first transmission, the brand was present in the repeats.

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