Product placements have long found their place in the marketing mix.
Initially, the Apple logo was upside down when the PowerBooks were opened. It wasn't until 1997 that it was turned 180 degrees. Since then, the backlit apple has been a perfect eye-catcher for every product placement. A simple and ingenious trick that should pay off for Apple.
In the mid-1990s, ten years after Steve Jobs turned his back on Apple after disputes with its CEO John Sculley, the company ran into major economic problems. At that time, Apple's Marketing Manager Jon Holtzman was already well connected in the film and television production landscape and he managed to place Apple in the film "Mission Impossible" with Tom Cruise. He had to overcome great internal resistance, but finally triumphed with the argument: "… you may only have 10 percent market share in the real world, but I have 90 percent market share on the silver screen." Success proved him right. Also in the matter of the logo shoot, which he was only able to implement much later, after the return of Steve Jobs.
Who invented this technology?
Holtzman's persistence has paid off: Apple continues to work closely with the entertainment industry to this day and continues to make a name for itself with its product placements. But is Jon Holtzman the inventor of product placement? Probably not. In 1894, the inventor of the light bulb, Thomas A. Edison, started his "Black Maria Studio" and later the "Edison Studios", where almost 1,200 silent films were made. At that time, Edison's film team recognized the opportunity to create win-win constellations with the railway companies that purchased products from Edison's companies. The railway company transported the film crews with their equipment and their brands were used for this – for example, the express train “Black Diamond Express ” – featured prominently in the films. Since these beginnings, there have been several success stories that show how clever product placement can affect the awareness of brands and products.
The product placement story of Steven Spielberg's “ET - The Alien”, one of the greatest commercial successes in cinema, is legendary. The boy named Elliot lays a trail of chocolate candy to lure ET into the house. The request from the film production company Amblin Entertainment, whether M&Ms could be used for this, was rejected by the manufacturer Mars. They then used Reese's Pieces from Hershey, a much less well-known product. However, Hershey recognized the huge opportunity, built a million-dollar campaign around the topic and implemented an extensive package of co-promotion measures. The result? Both ticket sales for “ET” and Reese's Pieces' sales skyrocketed.
James Bond films are considered record holders in terms of product placement. Special mention should be made of "Golden Eye" (1995), the seventeenth film in this series. It was the first Bond film with Pierce Brosnan and the first in which "M" was played by a woman. It was also the first in which Bond did not drive an Aston Martin. Instead, he was behind the wheel of a BMW Z3, which acted as the launch for the new roadster. It was the start of a very successful three-film deal for BMW with the Broccoli family production company.
The HBO TV series “Sex and the City ” ran from 1998 and 2004, which was jokingly referred to as the “Super Bowl for Women” due to numerous product placements. In any case, Manolo Blahnik shoes would never have reached such a high level of popularity and recognition if Carrie Bradshaw had not led us through the many episodes of "Sex and the City " on the red soles of their "Manolos". Today, almost everyone knows the shoe brand.
For an apple and an egg?
Many stories are also related to the cost of product placements. Because, for example, Tom Cruise can be seen in many parts of the Mission Impossible series with the PowerBook, rumors arose that Apple had paid $5 million for the placement. Holtzman, who now runs his own product placement agency in Los Angeles, continues to deny this vigorously. Rather, he emphasizes that such charismatic brands as Apple tend to upgrade the equipment and that outfitters simply like to see such brands on the set. In the reality of Hollywood productions, however, money usually flows today when it comes to significant placements as in the Bond films. And this money is already taken into account when planning the production budget.
Product placements in Germany
In Germany, product placements are more strictly regulated. After the topic had been in a legal gray area in Germany for a long time, the legal framework for product placements was laid on April 1, 2010 – following an EU directive for audiovisual media services (AVMS) from 2007. The 13th State Treaty on Broadcasting essentially transferred the contents of the AVMS guidelines into German broadcasting law.
Specifically, this means that product placements are limited to entertainment formats and must be identified as such. Interventions in the dramaturgy are not permitted, as are direct purchase requests. There are also a few other rules for public service broadcasting. One is, for example, that production aids and supplies must be free of charge. Within the defined scope of action, brands can now include product placement in their marketing mix on the German market and legally use this effective form of brand communication.
Digitalization and the competition of “streamers”
The digitalization of the media is increasingly disrupting the old order between producers, film, television and viewers. Although the viewing time for linear TV is a good three and a half hours a day, it's still significantly higher than the use of online videos*, but television use is declining among younger age groups and online and VoD use is increasing overall. The major TV broadcasters counter this by constantly optimizing their online media libraries.
The big "Game of Thrones" takes place on the Internet: In addition to Netflix, Amazon Prime Video, Disney and Apple have now stormed into the streaming arena. Disney+ comes with competitive prices, huge programming assets and famous brands (in addition to Disney also Marvel, Pixar, Star Wars and National Geographic). Apple TV+ started its service in 100 countries at the same time, installed its new app on 900 million iPhones and also offers free packages for buyers of new devices.
The German streaming providers are also actively in the ring. Deutsche Telekom has renamed its Entertain TV to Magenta TV and is experimenting with the first in-house productions. ProSiebenSat.1 launched the Joyn streaming platform with Discovery. Joyn focuses on local programs and aims to reach 10 million customers in two years. In addition, there are other fee-based and free streaming offers that compete with classic TV – not least YouTube, where you can also subscribe to YouTube Premium (YouTube and YouTube Music without ads) in addition to the free video clips.
The immense range of online TV offers creates great opportunities for product placements. The American branded goods industry has long recognized this and integrated it into their marketing strategies. And once again Apple manages to attract attention: "The Wall Street Journal" counted an average of 32 camera shots in each episode of "The Morning Show", which show an Apple product. "The Morning Show" (on air since November 1, 2019) is an Apple TV+ "Original" – as the streamers' own productions are called. NETFLIX earned $15 million in product placements in the third season of Stranger Things, according to the American Marketing Journal. Around 45 products from the automotive, beverage, shoe, retail and food sectors were registered.
Why so much effort?
But why do the marketers put so much effort into showing their products in entertainment formats? Quite simply because it's effective. Studies have shown that viewers perceive integrated products as a style-building element and do not find them to be disturbing. On the contrary, lifestyles and consumer behavior of protagonists from popular films, series and shows serve as an orientation for their own behavior. This creates opportunities to activate brands positively and to anchor them sustainably in the consciousness of consumers. But you don't have to shoot the "apple" or even produce elaborate TV formats yourself, as Apple does. If the story, protagonists and brand fit together, even smaller, smart and targeted placements can create awareness for the brand and charge it positively.
*According to the Media Activity Guide 2019, 14 to 69-year-old Germans surveyed watched an average of 24 minutes of free online videos and 19 minutes of pay video-on-demand every day in the first quarter of 2019.