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47Т. ЗАРУБЕЖНЫЕ ИССЛЕДОВАНИЯРЕКЛАМЫ
WHY TECHNOLOGICAL AND SOCIAL TRENDS ARE INCREASING THE IMPORTANCE OF PRODUCT PLACEMENT AMONG THE AFFLUENT
Lance Gentry*, Morris Kalliny** * Colorado State University-Pueblo, USA ** Saint Louis University, USA
Product placement has existed almost as since the very invention of moving pictures. As technological innovation increases the number of options available to reach customers, product placement become Paramount to a firm's success in creating effective advertising.
Keywords: advertising, product placement, digital video recorders (DVRs), avatars.
Технология продакт плейсмент появилась с изобретением кино. С расширением возможностей доступа к клиентам вследствие развития технологических инноваций, продакт плейсмент приобрел первостепенное значение для успеха фирмы в создании эффективной рекламы.
Ключевые слова: реклама, продакт плейсмент, цифровые ви-део-рекодеры, аватары.
Introduction
Product placement has existed almost as since the very invention of moving pictures. Newell et al (2006) documented instances of paid product placement in Europe by the Lumiere brothers in 1896 and provided American examples from Edison films from 1897 and beyond. In addition to anecdotal stories such as the famous use of Reese's Pieces in E.T. the Extra-Terrestrial, more researchers are conducting empirical research to measure the effectiveness of product placement. Auty and Lewis (2004) found that children were much more likely to consume a certain brand of soda after viewing a movie where the hero drank that brand. Perhaps the best summary to date on the effectiveness of product placement is Reijmersdal et al's
(2009) meta-analysis. They found 147 studies on product placement published in peer reviewed journals between 1981 and August 2008. Of these, Reijmersdal et al. then analyzed a subset of 57 empirical studies. The known factors that make product placement effective are beyond the scope of this paper and have been well covered by Reijmerdsdal et al. However, their general finding that more than half of the studies on brand placement effects were published in the last five years documents the growing importance researchers are placing on product placement.
Increased interest in product placement is not limited to just researchers. In fact, researcher interest may be increasing in response to marketing practice. According to PQ Media (2010), spending on product placement grew every year from 1975 - the first year they started measuring it - through 2008. In 2009, both global and US spending on product placement dropped for the first time (0.8% and 1.3% respectively), probably due to the current international economic malaise. Even with the downturn, global spending on product placement in 2009 was $54.58 billion, with $24.63 billion of that being spent in the United States. Based on spending in the early part of this year, PQ Media predicts that 2010 will be another record year for product placement expenditures, growing 5.3% from 2009.
The values and advantages of product placement may also be seen by pointing out the shortcomings of traditional methods of advertising such as TV, newspaper and radio advertising. Traditional advertising faces numerous serious challenges that are difficult to overcome. These challenges are summarized as follows:
1. Consumers are exposed to a tremendous number of advertisements on a daily basis which makes it impossible to give significant attention to most of them, and this number is expected to continue to increase in the future (Bogart, 1985). This is more true than ever before due to the various venues available to advertisers. No matter how useful or how interesting a piece of advertising is, the customer has neither the time nor the mental resources to dedicate sufficient attention to it.
2. The majority of advertising is presented to consumers when they are not shopping for products or services being advertised. This makes it even more difficult for consumers to pay attention, retain or respond to these advertising. In addition, these advertising messages
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are viewed to be less relevant to the consumer during the time the consumer is exposed to them. Aaker, Batran, and Myers, (1992) found up to 80% of an ad's score on recall and/or persuasion measures is a function of background variables such as whether or not people are interested in the product category being advertised.
3. The cost of advertising and particularly TV advertising is fairly high so companies limit the length and frequency of airing those commercials; therefore, the time the consumer is exposed to these commercials is very short.
Consumer Attitude toward Advertising
It is probably safe to say that the majority of consumers do not consider the nature of most advertising to be worth their attention or time. A thirty-year retrospective (Gaski and Etzel, 2005) of consumers' attitudes toward advertising in the United States found that the general attitude of the public toward advertising is negative, although consumers have a less unfavorable regard today than they did a few decades ago. Although the criticism toward advertising is usually directed at the tactics advertisers employ and not at the institution of advertising itself (Darke and Ritchie, 2007), it does impact the attitudes of consumers toward advertising in general. This poses a serious problem for marketers because advertising effectiveness is believed to be rooted in the view that advertising messages are potential communication exchanges between advertisers and consumers. This communication exchange is central to marketing success (Ba-gozzi, 1975; Houston and Gassenheimer, 1987; Hunt, 1976; Kotier, 1984). The exchange assumes that both parties give and receive something of value in order for both parties to be satisfied. The main objective of the advertiser is to sell or create a positive perception toward the product or service. To the consumer, the value of advertising is achieved when advertising matches or exceeds their expectation.
The negative perception of consumers toward advertising has been significantly impacted by irritation felt toward the bombardment of daily advertising. For example, Greyser (1968) found the main reason for people's criticism of advertising has to do with annoyance or irritation caused by either the number or type of advertising directed at consumers. This irritation is believed to lead to a general reduction in advertising effectiveness (Aaker and Bruzzone,
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1985). Irritation is often caused by techniques that are perceived to annoy, insult, offend or overly manipulative to consumers and as a result consumers develop a negative attitude toward it.
Entertainment
The now considerable body of research on Aad (Attitude toward Advertising) originated in the contrasting notion that pleasant or likable advertising is thought to have a positive impact on brand attitudes (Mitchell and Olson, 1981; Shimp, 1981). In a related vein, uses and gratifications research has demonstrated that the value of entertainment lies in its ability to fulfill audience needs for escapism, diversion, aesthetic enjoyment, or emotional release (McQuail, 1983). As the value of media entertainment is regularly acknowledged (see for example: The Economist, 1989), and as advertising is a significant portion of media content, the ability of advertising to entertain can enhance the experience of advertising exchanges for consumers (Alwitt and Prabhaker, 1992). Product placement provides alternative venues for advertisers where consumers may not be as negative toward advertising. This can be achieved when the product's name or image become part of the game the consumer is playing or when a hero utilizes the product during a movie. The consumer is likely to be more positive toward these forms of advertising compared to the traditional forms.
Why is Product Placement Increasing So Quickly?
The need for product placement will continue to dramatically increase as changes in society provides wealthy consumers with more and more ways to consume content while avoiding traditional advertising. Affluent consumers now regularly bypass commercials in three distinct methods for their home video consumption. First, consumers watch movies and unique television shows on subscription channels such as HBO. The final episode of The Sopranos, viewable only in the 29-30 million homes with subscriptions to HBO, was watched by 11.9 million people (Associated Press, 2007). It was the second most watched program on television that week, with more viewers than all but one show on the major networks. This is all the more impressive when one considers that at that time the major networks were available in approximately 111 million homes,
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and thus had well over threefold the number of potential viewers. The authors predict that this disproportionate share of ad free viewing of premium television content compared to standard advertising supported network fare will continue to grow in the twenty-second century, especially among affluent consumers. Currently the three most popular premium (advertising free) subscription services in the US are HBO (in approximately 29 to 30 million homes), Showtime (approximately 18 million subscribers), and Starz (about 17 million households) (Stelter, 2010). Interpreting these numbers is not an exact science as some overlap (the same household may subscribe to HBO, Showtime, and Starz as part of a premium viewing package) and each subscription includes multiple channels (for example, one of the authors currently receives eight HBO channels as part of his cable package).
Second, consumers will continue to purchase advertising free video content in every increasing numbers. Nash (2010) estimated that in 2009 Americans purchased just over 1.4 billion movie theater tickets alone and another 1.3 billion DVD/Blu-ray titles for home viewing. Other than a few previews at the beginning of the movies (which are easily bypassed on most disc players), this represents almost twenty-four billion dollars that people spent on advertising-free video consumption.
The videogame industry is comparable in size to the television industry. In contrast to the previously discussed advergaming model, purchased video games for consoles are another growing method for consumers to participate in ad-free entertainment. According to J. Mazel, an industry analyst at VGChartz (personal correspondence, July 15, 2010) approximately 275 million titles were sold in 2009 for various console systems in the United States (594 million units for the entire world). These numbers do not consider the titles bundled with the consoles themselves (of which 34 million were sold in the US last year, 89 million consoles sold worldwide) nor PC software titles. Mazel stated that the typical console owner buys approximately three games per year and that the typical new game is played about thirty hours. Thus, the average gamer spends at least 90 hours a year pursing advertising free video entertainment. This is a very conservative estimate as it does not include time spent on older games, game rentals, downloaded titles, nor other ad-free entertain-
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ment options. See Kohler et al (2009) for a recent discussion on marketing opportunities in the virtual world, such as using avatars for product placement.
Finally, the growing adoption of digital video recorders (DVRs) will continue to enable those willing and able to pay for the service to fast forward through commercials. According to K. Rutkowski of the Consumer Electronics Association (personal correspondence, July 15, 2010), DVRs are in 35% of US households as of mid 2010. DVRs can work in two ways; they can simply fast forward, or "zip," through the commercials at a rapid rate (as the most popular US brand, Tivo, currently works) or they can skip the commercials entirely as the line of ReplayTV DVRs did. The ReplayTV option worked by skipping a set amount of time that could be determined by the user. One of the authors used to own a ReplayTV unit and would fall into an unconscious pattern of clicks for particular television viewing. For example, after just a few experiences with recording Show A, the author would hit the skip button four times at each commercial break to completely skip all advertising and continue watching the show with virtually no interruption. As technology advances, "smart" DVRs will be developed that will recognize the difference between commercials and the show and will automatically skip the commercials on recorded shows. Consumers clearly desire this feature. Ferguson and Perse (2004) found that DVR owners who skipped (ReplayTV) or fast forwarded (Tivo) through commercials reported significant increases in television viewing enjoyment, television viewing satisfaction, and received greater entertainment benefits from watching television. The latest version of the Tivo, the Premiere, also includes a 30 second skip button.
Previous research (Bellman et al, 2010; Gilmore and Secunda, 1993; and Stout and Burda, 1989) documented that fast forwarded advertisements provided significantly weaker effects compared to full attention (regular speed) commercials. However, there was one positive finding for advertisers. The researchers found that the diminished impact of fast forwarded was almost neutralized if the viewer had previously viewed the advertisement at least once. They theorized that the zipped (fast forwarded) ad helped the viewer recall the previously viewed commercial.
Thus, the case for increased product placement rests upon multiple trends among those with large disposable incomes to purchase advertising-free entertainment. In terms of passive video consumption, well over thirty million households subscribe to premium (ad free) television content. Sales of movie tickets and DVD / Blu-ray title purchases are in the billions, and this does not include rentals. Over 275 million units of console game software were purchased by Americans in 2009 and 35% of US homes now have a DVR. It is clear that there is a large and growing market for advertising free television service for those with the discretionary income to enjoy it. Product placement is a viable mechanism for marketers to reach this affluent population as they enjoy these ad-free entertainments.
References
1. Aaker, David and Donald Bruzzone (1985), "Causes of Irritation in Advertising," Journal of Marketing, 49 (2), 47-57.
2. Aaker, S., R. Batran, and J. Myers (1992), "Advertising Management" Englewood Cliffs, NJ: Prentice-Hall
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4. Associated Press (2007), 'Sopranos' ratings beat most network shows: 11.9 viewers tune in to Tony's finale; beat only by 'America's Got Talent,' MSNBC, June 15, 2007, http://today.msnbc.msn.com/id/19194093
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14. PQ Media (2010), 'New PQ Media Report Finds US Branded Entertainment Spending Dipped Only 1.3% to $24.63 Billion in 2009 & on Pace to Grow 5.3% in 2010, Exceeding Most Advertising and Marketing Segments,' Press Release, June 29, 2010.
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