Post Pandemic: Is Movie Product Placement Better Than TV Commercials?

With the rise of OTT consumption is movie promotions way to go for brands. Let’s find out.

-Sai Deepak Konreddy | Executive Marketing Club

Although I’m pretty newbie to the world of “The Big Bang Theory” (Still in Season 1), last night while I was watching it, I realized all the characters using a laptop of only one single brand which is “Dell” (ok graduate interns, it’s your firm stop blushing). I wondered for a moment but then I remembered the concept of “Product Placement”, which is not a new one but the one that has become quite prominent these days. So here a question that struck my mind will it replace the conventional tv commercials?

This concept of product placements occurs due to the fact of increasing production cost of movies which is now averaging at $50m or more. So, when a brand offers a certain amount of money for example motorcycle company Harley Davidson paid $10m to feature its motorcycle in the 2015 flick Avengers: Age of Ultron. So, this money that comes from product placements can help filmmakers make a better-quality product.

With F9 (Fast and The Furious 9) now in theatres and we know a lot of getting wrecked in this franchise (1,487 cars were wrecked until Furious 7). As mentioned in the above paragraph, not all brands pay for product placements, some brands give their products for free in exchange for promotion. This is what happens for a majority of the Fast and The Furious Franchise.

There are agencies in Hollywood where brands pay agencies for exposure and these agencies go make a deal with production companies to feature their client’s product. Usually, brands pay $40k to $300k annually to these agencies to get featured.

But how beneficial are these product placements to brands? It all depends on the below formula:

(Exposure on Screen) x (Viewership) x (Cost of TV Commercials)

This isn’t a proper indicator, yet it gives a rough comparison between TV commercials and movie product placements. But mainly product placements depend upon the screen time, logo exposure, context (location), and its relevance in the film.

Sometimes brands get featured for free that is accidental without any partnerships yet get hugely profited. But not all times it’s rewarding sometimes brands are shown in a bad light in movies, to avoid these brands make sure that they have proper guidelines before the brand gets featured in the movie.

According to Concave Brand Tracking, a firm that tracks movie product placements. In 2020, the top 50 highest-grossing films have reaped $892m in product placements and brands have made $1.2B in ad value from those product placements.

Fun Fact: Ray-Ban did not compensate film producers for major placements in films such as Risky Business (1983) and Top Gun (1986).

Here’s the list of top product placements in year 2020.

Picture Courtesy: The Hustle. Data: Concave Brand Tracking

This clearly shows the profitability of product placements over tv commercials, and we can also direct OTT releases in the above list.

Now with the advent of technology, product placements can be done digitally and in no matter of time, we can see product placements in already released and old films. With pandemic and people getting accustomed to OTT content, digital product placements seem a better investment than tv commercials.

But the thing that matters here is performance of the film at the box office/ streaming sites and the amount of screen time the product gets. If the brand is lucky enough then it has hit a jackpot in terms of advertising.