PRODUCT PLACEMENT

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PRODUCT PLACEMENT

• RUSSELL S. WINER
• STERN SCHOOL OF BUSINESS

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MARKETING COMMUNICATIONS IN 2005

• RISING PRICES OF TRADITIONAL MEDIA
• CPM (COST PER THOUSAND) OF PRIME-TIME HOUSEHOLDS
  IN 1994 7.64
• CPM IN 2004 19.85

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• LOSS OF CONTROL BY ADVERTISERS
• NEW TECHNOLOGIES LIKE TIVO (DVRs)
• 8 PENETRATION NOW 2 OF ALL ADS ARE SKIPPED
• WHAT DOES PRIME TIME MEAN ANYMORE?
• RISE OF THE INTERNET AS A MEDIUM
• 56 BROADBAND PENETRATION IN THE U.S. IN 3/05 VS.
  8 IN 3/00

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• NEW PHILOSOPHY OF MARKETING
• NEED TO REACH YOUNG AUDIENCES (18-24)
• LOOKING FOR MORE 1-TO-1, CUSTOMIZED
  COMMUNICATIONS (E.G., M-COMMERCE)
• CREATING GRASSROOTS TRENDS (BUZZ MARKETING)

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WHAT IS PRODUCT PLACEMENT?

• SOMETIMES REFERRED TO AS BRANDED ENTERTAINMENT
• PUTTING BRAND NAME ITEMS AS PROPS WITHIN THE
  CONTEXT OF A MOVIE, TV SHOW, MUSIC VIDEO, VIDEO
  GAME, ETC.

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HISTORY

• FIRST KNOWN IN A MOVIE WAS IN A FRENCH FILM IN
  1896 SHOWING LEVER BROS. SUNLIGHT BRAND OF SOAP
• PICKED UP STEAM IN THE EARLY 1950S WHEN GORDONS
  GIN PAID TO HAVE KATHERINE HEPBURN IN THE
  AFRICAN QUEEN THROW ITS PRODUCT OVERBOARD
• FIRST MODERN EXAMPLE WAS REESES PIECES
  PLACEMENT IN E.T.

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MORE RECENTLY

• RISKY BUSINESS RAY-BAN SUNGLASSES
• YOUVE GOT MAIL AOL, APPLE, IBM, STARBUCKS
• CAST AWAY FEDEX, WILSON
• JERRY MAGUIRE REEBOK

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N.Y. TIMES 2005 OSCAR NOMINEES

• AFLAC IN LEMONY SNICKETS A SERIES OF
  UNFORTUNATE EVENTS
• CLOROX BLEACH IN MILLION DOLLAR BABY
• HAI KARATE IN THE INCREDIBLES
• KLEENEX IN THE AVIATOR
• SANFORD WINE IN SIDEWAYS

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THE DEALS

• IT SIMPLY HAPPENS
• ITS ARRANGED AND THE PRODUCT SERVES AS
  COMPENSATION
• ITS ARRANGED AND THERE IS FINANCIAL COMPENSATION
  (FOR THE MOVIE PRODUCERS)
• PROJECTED 4.25B IN 2005

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CASE INTRODUCTION OF THE BMW Z3 (1995)
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BMW/MGM DEAL ON GOLDENEYE

• NOVEMBER, 1995
• CENTRAL PARK LAUNCH EVENT
• TONIGHT SHOW APPEARANCE
• RADIO DJ PROGRAM
• FILM PREMIERE
• MARCH, 1996 FIRST CARS AVAILABLE AT THE DEALERS

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GOALS OF THE LAUNCH PROGRAM

• BUILD EXCITEMENT
• REJUVENATE BMW BRAND
• TRANSFORM BMW IDENTITY
• EXPAND BRAND FRANCHISE TO YOUNGER BUYERS
• REVITALIZE DEALERS

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OUTCOME

• GOLDENEYE RAKED IN 335 MILLION WORLDWIDE
• TRAFFIC TO THE BMW WEB SITE TRIPLED
• AD RECALL (TV, PRINT 40 OF BUDGET ON
  TRADITIONAL MEDIA) WAS 44
• 9,000 Z3s WERE PRE-BOOKED BY 12/31/95 VS. 5,000
  PROJECTED
• DEALERSHIP TRAFFIC INCREASED

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HOW DO WE EVALUATE IT?

• BY PRODUCT POSITIONING
• EXAMPLE MOVE AWAY FROM BRAND ATTRIBUTES TO BRAND
  PERSONALITY OR FROM ULTIMATE DRIVING MACHINE
  INTO SEXY, WEALTHY, EXCITING
• CAN WE MONETIZE PLACEMENTS?

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WHAT ARE THE RISKS?

• LOSS OF CONTROL
• DIFFICULT TO MEASURE IMPACT
• UNCERTAINTY IN HOW MEDIA VEHICLE WILL BE RECEIVED
• NEGATIVE PUBLIC REACTION TO SUCH MARKETING
  EFFORTS (BANNED IN THE U.K.)

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SUMMARY

• MARKETERS ARE LOOKING FOR NEW WAYS TO COMMUNICATE
  WITH CUSTOMERS
• MORE MONEY INVESTED IN NON-TRADITIONAL MEDIA
  (SEE ALSO WWW.BMWFILMS.COM)
• BUT, NON-TRADITIONAL MEDIA NOT GOING AWAY ANY
  TIME SOON