Product PlacementA Global Medium

pro•duct place•ment

What Is Product Placement?

('prä-dekt 'plAs-ment)

the practice of exposing brand name products and services in major motion pictures and television programming.

Product Placement has a long history of influencing public opinion and affecting consumer responses.

History of Product Placement.

Clark Gable was seen not wearing an undershirt in the 1934 movie It Happened One Night.

History of Product Placement

Undershirt sales plummeted --- no real man would wear an undershirt if screen idol Gable didn’t.

James Dean, the movie idol of the 1950s, caused sales of Ace Combs to reach record levels when he used one in Rebel Without A Cause.

History of Product Placement

Sales of RayBan™ sunglasses skyrocketed after Tom Cruise wore them in the 1985 movie Risky Business.

History of Product Placement

Association with Steven Spielberg’s movie E.T. The Extraterrestrial increased the sales of Reeses Pieces™ by 70%.

History of Product Placement

James Bond’s switch to a BMW Z3 was an international media topic.

History of Product Placement

First year’s production of Z3’s were sold before they hit the showrooms.

Austin Powers’ product placement was developed into the largest and most successful retail promotion ever of Heineken beer in America.

History of Product Placement

• 32,000 retailers took part.

• Mike Meyers appeared in Heineken commercials and POP.

• Sales increased 17% over goal.

Product Placement is a powerful tool.

What Is Product Placement?

• What are the benefits?

• How does it work?

• How much does it cost?

• Is it good for your brand?

• How can you become involved?

• How do you turn product placements into James Bond-type results?

• Break through the media clutter.

• Build awareness.

• Soft-sell through positive association.

• Celebrity association = implied endorsement.

• Global reach.

• Cost efficiency -- Diminishing CPM.

• Promotional tie-in opportunities.

Benefits of Product Placement

What are the benefits?

Product Placement works much like Public Relations. Access to opportunities hinges upon relationships with:

How It Works

• Studios• Producers• Celebrities• Propmasters• Transportation Coordinators• Set Decorators• Talent Agents• Many others

• Movies are typically produced 12 to 24 months before they are released in theaters.

• Today we are dealing with movies that you will see in theaters in 2002 and beyond.

• Scripts are not publicly available; studios and producers make them available to a selected group of agencies and individuals. Access to is based upon “need to know.”

• This is why relationships and access equal opportunities.

Product Placement

We review over 600 feature film scripts annually.

Scripts are qualified, read and broken down for opportunities.

Placements are determined by the appropriateness of the movie for individual products.

Questions we ask:

Product Placement

• Does the product fit the movie?

• Does the movie help build the brand?

• Is there a celebrity association?

• Can the placement be extended into a marketing opportunity? National/Global?

•Negotiations take place to secure the opportunities for clients.

•There is always competition. (Four other car companies wanted the James Bond deal.)

•The negotiation secret is to be there first and to be the best.

Product Placement

• Once a placement is negotiated, the agency will provide the product for the filming.

• Filming can take place anywhere in the world.

• Expensive products (automobiles, jewelry, electronics) are only loaned to a production.

• Loan agreements protect clients’ products.

• Lost or damaged products are billed to production.

• Consumables, inexpensive items, POS materials are not returned.

Product Placement

• Agency tracks movie through production stage -- reports accountability to client.

• Obtains clips and still photos from studio/filmmaker.

• Screens movie before release.

• Notifies client of successful placements.

• Supplies client with reports and video clips of placements.

• NMA clients have their own password-protected web sites that catalog placements and calculate media returns.

Accountability

Agency fees: Annual retainer or per project basis.

Placement Fees:

How Much Does It Cost?

1. Simple loan: Use of product in exchange for visibility.

Filmmaker saves cost of renting or buying products needed as props. Products get visibility in film.

2. Placement fees required by filmmaker

Filmmaker knows he has high visibility placement (Tom Cruise driving a car or drinking a beer). Fees asked range from $5000 to millions.

Agency is very important in negotiating these deals.

Options: Agency recommends of best course of action:

1. Pay negotiated feeObjective is to negotiate for minimum fees/maximum visibility.

Fees are always paid upon performance, not up front.

2. Leverage placement fees against client promotions

Studios are seeking tie-in partners for their movies and will waive fees for promotions.

Negotiations With Studios/Filmmakers

No fees were paid for James Bond placement.

Extending Placements To Marketing Promotions

James Bond/BMW Case Study

James Bond/BMW Case Study

In May 1994, BMW asked NMA for alternative marketing ideas for new sports car launch.

•Bond opportunity identified in June of 1994.

•Movie scheduled for release November 1995.

•BMW approved concept.

•Negotiations started immediately.

•Met with production company in London.

•Met with MGM Studio in LA.

•First proposal presentation in London, June 1994.

•Second meeting in Munich, July 1994.

James Bond/BMW Case Study

Deal consummated July 1994 - before any competitors were even aware of opportunity

Elements of Promotion:

•Public relations.

•Print advertising.

•TV spots local/national.

•Dealer support program -- media kit, ad slicks, etc.

•Private Preview Screenings for every dealer.

•Premiere parties.

•Consumer test drives.

James Bond/BMW Case Study

All 18 BMW international marketing territories participated.

Results: • Global recognition of Z3 as James Bond’s car.

• First year’s Z3 production sold out before it reached dealerships.

• 20% increase in showroom traffic during initial stages of promotion.

• Recognition as top promotion of 1995 by Promotion Marketing Association of America.

• Established benchmark for automotive/movie tie-ins.

The Future of Product Placement

• TVs and Computers will become one.

• Internet will carry programming.

• Large digital flat screens will be common in homes.

• Audience fragmentation -- In-home viewers will have many viewing choices.

• Segmentation -- programming will become more topic specific

• Digital program storage will allow “anytime viewing” and program selection by viewer interest.

The Future of Product Placement

The Internet and Digital Convergence Technology will increase the value and importance of product placements in entertainment properties.

The Future of Product Placement

• Transactional programming will result from interactive capability, i.e. viewers will be able to purchase products they see in programs they watch, while they are watching.

• Program viewers will simply use their remote control to purchase products online.

• Transactional programming will be the next frontier of product placement.