Product Placement (and the other 2 P’s)

This is probably my final blog, so let’s make it a good one, shall we…

In addition to the required materials, this week I also checked out “Why Advertising Is Failing On The Internet” by Eric Clemons, the Marketing and Second Life podcasts, and “Advertisers Face Hurdles on Social Networking Sites” by Randall Stross. The theme that struck me the most was the topic of product placement, be it in games or on the internet. I would like to expand on that topic, including television, movies, and music.

First off, I agree with Mr. Clemons that the role of advertising, at least in its present form, will grow to be less and less effective over time. Consumers are becoming more savvy more quickly than most advertisers can keep up with. This is why experiments like Second Life or the bevy of social marketing apps tend to be either complete failures or are effective only in the short term. I have also seen product placement in television shows become much more bold in the last two or three years. This is likely due to the proliferation of digital video recorders, but the response is intrusive to the point where it becomes offensive. Two shows I can think of immediately are Medium (coincidence?) and Bones. In both shows, there is a scene where a character is introduced to a new vehicle (Chevrolet Equinox and Toyota Prius, respectively) and the character gushes about what a wonderful vehicle it is and all the wonderful features it has. Clearly, marketers need to make customers aware of their products (does anyone who might be in the market for a Prius not know of that vehicle?), but such emboldened placement is more likely to turn off viewers than attract them, at least it does for me. Perhaps there is some data to demonstrate the effectiveness of this type of placement, but it just seems like desperation to me. Apparently gone are the days that product labels all just happened to point towards the camera; subtlety is not part of this generation.

Let’s say, hypothetically, that such marketing were to prove ineffective. What would a marketer do? I see a potential easy move towards music. Music, rap music especially, has shown an affinity for mentioning brands even without getting paid to do so. Granted this typically applies to luxury brands, I could imagine a few upcoming musicians would readily take sponsorships from advertisers for quid pro quo promotion. If I recall correctly, Chrysler did just this with Snoop Dogg a few years back with the 300C. Just check out this link for some more examples of potential cross marketing: http://www.billboard.biz/bbbiz/content_display/industry/e3ibd93dba87a9330a3e46bc95c5dcacd9b.

Similarly, I have seen an increase in video game marketing (oh, how I miss Pong). Unlike a commercial television show, where a logical person will expect advertising, gamers paying $60 for the latest video game will have, and have had, scathing reviews for any advertising that distracts form game play. Ironically, these reviews appear to contradict studies that actually show video game advertising is more effective than TV advertising. I won’t go into detail here, as there is a good article on TechCrunch: http://techcrunch.com/2009/03/24/study-in-game-video-advertising-trumps-tv-advertising-in-effectiveness/.

So that takes care of promotion; what about product, price, and place? As I mentioned earlier, customers are becoming more savvy – they all can readily find reviews of your product and the best place to buy it. Thus, I see much more emphasis in the future on advanced marketing functions. Specifically, as promotion becomes less effective, resources must be places on understanding customers’ wants and needs (stated or not), what is required to delight those customers, and what adds the most value to the product. Pricing will need to flow accordingly depending on the firms choice of being a low cost supplier or a value-add supplier. Similarly, distribution channels will reflect the firms’ strategic decisions. Companies will not be able to make up for an inferior product by blasting consumers with ads, not will they be able to convince consumers of value that simply is not there.

So how does this all tie back into the digital age? Well, easily I say. These new media tools can be used to direct the attention of consumers to your product. Certainly the product value must be there – a clever online game cannot make up for a crap product – but the marketer can pique the consumer’s interest and establish a brand in the collective social psyche. It will require a fine balance between opening a line of communication with the consumer and offending or turning them off.