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Product Placement Boosts Brand Recognition

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November 20, 2006

Everyone knows that Simon Cowles drinks a Coke during the judging on American Idol. The camera is on the cup in front of him almost as much as on his face. And Coca-Cola pays a lot to make sure of that fact. But is that money well spent?

Probably so, according to the first-ever "Product Placement Valuation Study," from Nielsen Media Research. The study found that 57.5% of viewers recognized a brand when viewing a product placement in combination with a commercial, compared with 46.6% of those viewers exposed only to a commercial for that brand.

Effect of Product Placement on Branding in the US, October 2005-June 2006 (% of respondents)

A 10%-plus jump in brand recognition clearly demonstrates the value that product placement contributes to traditional television advertising.

Beyond that, an important objective of the study was to look beyond a product placement's physical characteristics (eg position within a scene, duration, character interaction, verbal support, etc) and examine how the context of a placement's execution — including the viewer's loyalty to the program and familiarity with the brand — impacts consumer response. Here are some of Nielsen's conclusions:

  • While upping brand recognition, the addition of a product placement to a commercial spot for the same brand does not appear to have an edge over a stand-alone commercial in terms of motivating viewers to purchase that brand
  • Attitudes were affected, however, with nearly 60% of all viewers feeling more positive about the brands they were able to recognize in a placement
  • Many challenges still exist in product placement, as the study uncovered substantial variations in brand awareness, attitude and purchase interest based on the level of familiarity a viewer had with the brand, the genre of the program, a viewer's loyalty to that program, the exact nature of the placement, etc.

"This study of the interaction of product placement and commercial messages demonstrates that product placement can represent a valuable enhancement to a media plan," said David Poltrack, chief research officer at CBS Corp. "[But] it also confirms that not all product placements are successful."

For more on new developments in television advertising, read eMarketer's recently published US DVR and VOD Usage: Ad Skippers and Time Shifters report.

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