We will start this lecture with a fun, little exercise. Try to remember if you’ve ever been in this situation before, or imagine, if this has never happened to you, that you just adopted a dog or a cat. You got them from the shelter, and you brought the animal home, but now the newest member of your family is hiding behind the couch, or under a bed, scared for its life, and you are wondering if it was a good decision to adopt them in the first place.

But because you are smart, you know that at some point, your new furry friend will get hungry, so you pick up some dog or cat treats and you place them on the floor strategically, piece by piece, the first one closer to where your dog or cat is hiding, the second one maybe a foot away towards you, the third one next, and so forth until you place the bait so to speak, to make your new furry friend, come out from their hiding place. You understand that when your new pet is in a new house, a new environment, it may take a few days before the pet is willing to come out from their hiding place. Sometimes they will come out at night, eat the food and then run back to their safety spot, but eventually, if the bait is placed strategically and continuously, day after day, you have good chances to create a long-term relationship with your new furry friend.
In this simple exercise, you can already tell how product placement, or in this case, bait placement, patience, and perseverance, play an important role in eventually getting your prospect (or pet in this example) to give you the results you’re expecting, in other words, to come out from hiding.

In the business of selling, product placement plays an important role in creating our motivation to buy.

The strategic use of product placement is said to have started in the 1930s in the United States, when grocery stores started hiring specific people that seemed to understand how product placement was essential to the success of making clients purchase more of one product or another. Since the 1930s we have been able to see strategic use of product placement in print ads, radio spots, TV shows, movies, in stores, and now, online.

Do you remember the movie called “ET, the extra-terrestrial ” directed by Steven Spielberg? It’s a famous movie, in which a boy named Elliott discovers an extraordinary looking creature living in the woods behind his house. Just like we illustrated in our exercise, in the movie Elliot tactically places individual pieces of candy to lure out of hiding this creature that he just discovered. Those who remember the movie, likely remember that it was Hershey’s Reese’s Pieces, as the candy that Elliot used to lure out ET, and that candy choice was not an accident. The choice for Hershey’s Reese’s Pieces was a premeditated one, as you might suspect.

The story goes that Steven Spielberg had an agreement with Hershey, the chocolate company, to use their Reese’s Pieces in the movie, which they did. Interestingly, Steven Spielberg initially approached M&M Mars, the company that makes Snickers, M&Ms, and other famous sweets, asking if they were interested in allowing the movie to use their candy, as paid advertisement in the movie, but Mars turned him down. However, Hershey took full advantage of the opportunity, and that turned out to be a smart decision because only a week after the movie launched, the sales of Reese’s Pieces tripled, and within a couple of months from the movie’s release, more than 800 movie theaters across the United States began carrying and selling Reeses Pieces for the first time.

What a great example to see the power of product placement at the right time in the right place.

Standard advertisement, which is a forward approach to marketing in which the consumer can overtly see that advertising a product is what they are witness to. But product placement is more of a covert way of advertising something because we aren’t observing product placement for the product itself, but for the storyline in which it’s found.

We all know that virtually all media is funded in part by sponsors, all of whom want to showcase their products or company name within the story that we see. Think of it this way: The attraction of product placement works the same as a perfume ad or as a hamburger add we see on TV. We don’t really get to smell the perfume or taste the hamburger when we watch the commercial, but the commercial tells a story that pulls us in, that creates curiosity and desire which in turn, will make us eventually try, and buy those products.

Product placement is becoming more and more popular as it gives results and creates new opportunities for brands to reach their target audience in subtle ways. Businesses are using product placement to increase their sales, brand awareness, and draw in customers – all without “traditional” ads, as we know them.

In the media world, product placement is also known as embedded marketing, because the product is embedded in another form of media. This placement of branded goods or services is often found in the entertainment industry, like movies or TV shows, in sports and many other fields. Do you remember James Bond? What famous car does he drive? An Aston Martin, of course. But do you also know that apart from the Aston Martin car that appeared in the James Bond movies, there were also another 20 some brands strategically placed in each of those movies. In Casino Royale, another James Bond movie, if you pay attention you can see brands like FedEx, Sony Computers, Omega watches, Louis Vuitton, and other car manufacturers like Land Rover, Jaguar or Lincoln, all made by Ford, the same car manufacturer that makes Aston Martin. However, most of us only remember the Aston Martin, and that’s perhaps because that is the strongest association that we have with James Bond in our minds.

In most cases, these major brands have paid huge amounts of money for their brand to be placed in these movies, because they know that the payout can be even higher when they have their brand strategically placed throughout a popular movie . To have an idea, overall, it has been reported that Hershey saw a 65% increase in profits and popularity during E.T.’s movie run.

Aside from an increase in profits, product placement can also boost brand recognition, which will benefit a business in the long run. At first brand recognition usually doesn’t generate immediate sales, however, in time, it will lead to that. In fact, the Journal of Management and Marketing Research (JMMR) estimates that on average “57.5% of movie streaming and TV viewers recognize a brand in a placement when the brand also was advertised during a show.”

Next Medium, a marketing survey company claims that the brand recognition percentage is even higher when the placements are integrated into “emotionally engaging programs.”
They attribute this number to the “halo effect:” a positive association with a show or person which leads to a positive association with the corresponding product. Just keep in mind that the marketers’ goal in this process is for us, the prospective consumers, to be positively influenced by the brand, without overtly noticing the placement of that brand. The goal of superior placement is to positively influence our perception of a brand or product, so we buy it.

Product placement not only applies to subtle placement in media but can also apply to retail shop space. Think about going through a grocery store checkout – how many times have you picked up a candy bar or magazine just because it’s right there, conveniently located for you to do so? Just as with media, big-name corporate brands will pay top dollars for prime space on the retail floor and on shelves. That may mean large end of aisle displays, a space right next to the register, or even just having their products at eye level on the shelves, which is very important because it significantly increases the likelihood a consumer will choose their product over similar ones that are placed on higher or lower shelves. Brands will also pay slotting fees, which can be significant, and are meant to limit shelf space for their competitors. This is common practice for big brand retailers who could pay large amounts of money for the premium shelves and premium aisles in the grocery or retail locations. These large slotting fees can make it difficult for smaller brands or businesses to break into the commercial retail market.

So, if you want to have a physical presence and sell other than online, for your health products that you have created, or for your workout equipment, or for your books, you may not be able to demand top-notch shelf space at Walmart right away. A strategy may be instead to make connections with smaller, local stores to get your products in front of consumers and even talk to bulk shopping stores, which may be open to a small endcap display for a local business – Sam’s Club and Costco are known for doing this.

The rapid growth of social media marketing clearly pushed the traditional retail, marketing and ad agencies to adapt and make changes to keep up. Even huge corporate brands now rely on Facebook, Twitter, Instagram, SnapChat, TikTok and YouTube to share, promote, and sell their products. Social media product placement often requires the service of the social influencer. The social influencer is a social media personality with a large following; they may use branded products to boost that brand’s popularity with their followers. Social media influences are typically paid a fee for branded product placement. The cool part of this is that social media influencers don’t need to be big movie stars to make an impact on product placement and influencer-based marketing can range from very overt shout-outs to a brand to subtle inclusion of any products in a picture or post. Companies interested in this method will need to work through their marketing strategy to decide what works best for them. And all of it starts with finding the right influencer who can hit your target audience and your budget. Or you can become an influencer yourself with time, planning and dedication.

Just as you can imagine, national product placement campaigns in movies, TV shows or media are, of course, expensive, but social media makes things a lot easier and affordable., Small business owners should always try to use product placement to spread the word about their products and their brand, keeping in mind that the goal of any product placement campaign is to simply get a brand out in front of their target audience.

Author: Sanda Kruger

Sanda is an entrepreneur, real estate investor, health coach and professional dancer. Sanda is an entrepreneur with more than 20-year experience in business development and project management in the fields of life, health and fitness coaching. She is also a real estate investor and a banker, who learned outstanding adapted business strategies, sales and marketing techniques, communication, and goal setting skills, hands-on, through life and work experiences. She is a certified fitness professional and is the creator of two original fitness programs, called BellyCore® Fitness and AquaCor®.