Department of Marketing

Title

A Comparison of Consumers' Responses to Traditional Advertising and Product Placement Strategies: Implications for Advertisers

Document Type

Article

Publication Date

Spring 2005

Abstract

Product placement is a form of advertising and promotion in which brands are placed in television shows, movies, or other entertainment content to generate visibility and achieve audience exposure. Proponents of product placement cite several potential advantages for embracing this method, such as a long shelf life, prominent exposure, and enhanced realism. For example, even years after a movie is released or a television show airs, advertisers are still able to receive some level of benefit from DVD/video releases and television re-runs (Morton 2002). Furthermore, product placement allows advertisers to escape "commercial zapping" because consumers cannot skip over products placed within media content. In fact, television networks believe that by 2007, there will be 24.7 million DVR owners (Digital Video Recorders) resulting in a loss of about $6.6 billion in advertising revenue. However, there are common disadvantages associated with product placement, such as the lack of control over how products are portrayed or incorporated into a scene or storyline. Further, advertisers have no influence over how successful media programming will be, making it difficult to predict where to place brands for maximum exposure. Nevertheless, advertisers continue to spend as much as $20 million to have their products appear in media content (Grover 2004). While a considerable amount of research has explored the effects of product placement, key issues remain for understanding this strategic tactic. For instance, much of the research investigating product placement to date has advocated or used memory-based tests (either recall or recognition) to assess effectiveness (Brennan and Dubas 1999; Eddington 1991; Pracejus 1995; Russell 1998; Weaver and Oliver 2000) with very little work done comparing the effectiveness of product placement versus traditional advertising. Therefore, the purpose of this study is to explore consumer attitudes toward the various forms of product placement (i.e., movies, television, video games, music lyrics, etc.) and investigate how these differ from traditional advertising. According to the Elaboration Likelihood Model, consumers process information through a central route when they are highly involved or interested in content and a peripheral route when involvement or interest is low (Petty and Cacioppo 1983). Thus, information is processed actively when deemed relevant and relegated to a secondary status when relevance is perceived as low. For the most part, product placement is more likely processed through the peripheral route since the message is secondary to that of the media content. For instance, while watching movies or television shows the likelihood that a viewer is more focused on the placed product than on the programming content is low. While elaboration of messages can vary depending consumer motivation, the implications for processing product placement is important when measuring the effectiveness of this tactic given the inherent differences between various types of media and advertising. Gupta and Lord (1998) compared product placement with traditional advertising and found that prominent placements outperformed traditional advertising. However, this work does not lend itself toward understanding product placement occurring in other media modalities, such as television, computer games and music videos (Nelson 2002). To explore these issues, five hundred adults were randomly selected from an online panel and asked to complete a thirty-item survey. Subsequently, a total of 227 completed questionnaires were collected resulting in a response rate of 45.4 percent (227 out of 500). The variables measured centralized around four categories: opinions about advertising, opinions about multiple forms of product placement, perceived advertising effectiveness, and perceived effectiveness of multiple forms of product placement.