This article is by Rob Tanner, assistant professor of marketing for the Wisconsin School of Business at the University of Wisconsin-Madison.
Consumers have become highly adept at avoiding television advertisements. We switch channels, divert attention to our tablets and phones, and of course fast-forward through ads on our DVRs. Partly in response to this loss of attention, marketers are increasingly focused on product placement as an alternative way of exposing us to their brands. After all, product placement is innately much harder to skip given its integration into the actual program content.
Most academic research on product placement has primarily considered it as a separate persuasive technique independent from the commercial break advertising. That is, mirroring early research on TV advertising, research has focused on how product placement influences viewers’ recall of and attitude toward brands. However, this overlooks the possibility that product placement in a show might influence the likelihood of viewers watching an advertisement for related products at the next commercial break.
In research just published in Marketing Science, my colleagues David Schweidel of Emory University and Natasha Foutz of the University of Virginia and I began to explore whether such synergies exist. Specifically we examined how product placement might affect the audience for subsequent ads in a number of cases. These included a perfect match, which is when the same product features in both the placement and the ad, e.g. the judges on American Idol drink Coke and then a Coke advertisement is shown in a subsequent commercial break. A brand-only match represents the case where different products from the same brand feature in the placement and ad, such as an iPhone commercial following an earlier MacBook Air placement. A competitive-match occurs when a specific product placement is followed by an advertisement by a category competitor, imagine for example if the Coke placement on American Idol was actually followed by a Pepsi commercial.
Our investigation was motivated by the fact that psychological research on priming suggests that brief exposures to visual stimuli can be sufficient to alter how people respond to subsequent stimuli in an entirely nonconscious fashion. The primary idea we rely on is that when a placement and a subsequent advertisement feature the same brand (perfect match and brand-only match) the placement acts as a prime that activates the brand in the viewer’s memory, thus leading to temporary increases in its accessibility. Several theoretical accounts predict that such increased accessibility should result in increased attention being paid to subsequent advertisements featuring the brand. For example, if there was a box of Cheerios in a kitchen scene in "Modern Family," then despite not consciously noticing it, a viewer may nonetheless pay more attention to a subsequent Cheerios ad than if the placement had not been present.
Our analysis was based on set-top box channel tuning data from about half a million households in a major metro area, combined with a dataset which contained specific details of all the placements and advertisements that appeared in primetime programs on the five major broadcasting networks (brand, time, duration etc.). In total this amounted to data for 148,000 advertisements preceded by 57,000 product placement incidents. Now, you might be thinking how did all this data enable us to explore whether product placement influences the attention paid to subsequent ads? The answer is that viewers channel switching behavior during commercials gives us a proxy for attention paid to them. For example, if attention toward an ad is increased then viewers should be less likely to tune away from it. Conversely, if less attention is directed to an ad tuning away becomes more likely.
The primary focus of our analysis was to examine this channel switching during the first ad in the commercial break, as this is where the greatest change in the audience typically occurs. For example, in our data, on average 7% of the show audience tune away from the channel during the first ad in the break. From the advertiser’s point of view, those 7% are lost eyeballs.
So what did we find? Does prior product placement affect this 7% drop in audience? The answer is yes. When there is a perfect match between the first ad and a prior placement (e.g., Coke ad preceded by a Coke placement) the audience drop is reduced by 5%. In the brand-match case (e.g., iPhone ad following a MacBook placement) the effect is even greater, with the audience drop during the first ad being reduced by 11%. Our data does not enable us to explore why the latter reduction is larger, but our hypothesis is that viewers are simply more likely to consciously notice the perfect matches (and potential infer an underlying persuasion motive) which would tend to offset or undo the otherwise nonconscious effect.
How about the competitive case? Here we find that competitive placements (e.g., a Coke placement preceding a Pepsi ad) can actually cause a small (2%) increase in audience decline during the ad, but only when the placement occurred earlier in the show (i.e., not in the preceding program block). Thus it appears a brand’s product placement can directly interfere with the audience for a competitor’s ad. The delayed effect may appear surprising. However, it is actually consistent with psychological research on goal shielding which essentially shows that primed goals (e.g., a Pepsi placement can create an automatic motivation to consume a Pepsi) can make competing goal cues (e.g., the Coke brand) less accessible in memory, thus reducing attention paid to them. Moreover, such goal effects tend to strengthen over time, which explains the delayed result.
The current results offer a number of managerial insights for both advertisers and the TV networks. The synergistic effects that we observed in the brand-match and perfect-match cases reveal that strategic use of product placement can contribute to increased audience sizes during a brand’s subsequent commercials. Essentially, by pairing their placement and advertising activities, marketers can reach a larger audience with their advertisements. It is particularly noteworthy that placement from the same brand but a different product category yields the strongest effect, a finding of particular interest to firms engaged in branding efforts that span multiple product categories. Also, given that these positive synergies are strongest when the matching placement occurs in the program segment immediately prior to the focal advertisement, tight coordination is required to take full advantage of them. Finally, while the negative synergies for the competitive matches are smaller, they do suggest an additional reason for brands to be cognizant of how they position their ads and placements vis-à-vis their competitors.
