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Research Digest

The Power Duo: Product Placement and CTV Ads Work Best

Abstract

  • 77% of consumers purchase items because of the brand name.
  • Combining television advertising and product placement delivers better results than each one alone.
  • A study of 30-second television commercials found that brands saw as much as a 61% lift in sales with audiences who viewed a commercial and product placement in the series.

Why Product Placement Matters

Product placement is more than a subliminal message–it’s a hybrid message. A study by Business Research Methodology reveals that product placements contain both advertising and publicity—two necessary ingredients that move the needle for brands. Not only is product placement a way to target specific audiences, but they tend to have a longer lifespan and receive a less critical response from audiences compared to more overt forms of advertising. Product placement on television drives the highest revenue compared to other channels, like print media and digital media. However, not all types of product placement are built the same, as different formats produce varying levels of recall: 

  • 32% of viewers recall the product if the item is visually placed
  • 53% of viewers recall the product if the item is actually used
  • 60% of viewers recall the product if the item is verbally mentioned
  • 71% of viewers recall the product if the item is verbally endorsed
  • 81% of viewers recall the product if the item is mentioned and used

Not all product placements are equally effective, though. The International Journal of Research in Marketing found that the most influential product placements were those that struck the perfect balance between being noticeable and not too overt. A separate study by Marketing Science supported this hypothesis, revealing that viewers tend to be turned off when:

  1. The product placement was too obvious: For example, if a character in the show holds the product to the screen and references it.
  2. Product placements surrounded by other advertising: Like a Nike ad that autoplays before a YouTube video followed by a product placement for Nike in the first few minutes of the same video.

Better Together Than Alone: How to Leverage Product Placement With Connected TV

This year, a study by product placement agency BEN tracked ad and product integration exposure to brands, through to the action taken by the consumers within two weeks of watching the ads. The study compared results across a range of industry verticals like CPG, food and beverage, and automotive brands that ran ads on CBS, The CW, and ABC, which also had product placement in CBS’ Mom, CW’s Riverdale, or ABC’s Jimmy Kimmel Live! These ads were screened across four different types of audiences: 

  1. Viewers who saw at least two seconds of a brand’s ad
  2. Viewers who saw the brand’s product integration (no ad)
  3. Viewers who saw both ad and the same brand’s product integration
  4. Viewers who saw neither ads nor product integrations

The overall findings from this study revealed that running in-show product placements alongside traditional 30-second ads drove stronger results across sales and website visits, than either placement alone, with some highlights shown below:

  • Brand: Doritos
    Program: Riverdale
    Network: CW
    Result: 61% lift in sales among audiences who saw the television commercial and product placement in the series, versus 37% lift in sales resulting from audiences who only saw the TV commercial.
  • Brand: Cereal (Anonymous)
    Program: Mom
    Network: CBS
    Result: 53% lift in sales among audiences who saw a TV commercial and a product placement versus 13.5% lift from a TV commercial alone.
  • Brand: Automotive (Anonymous)
    Program: Jimmy Kimmel Live!
    Network: ABC
    Result: 8% lift in website visits when audiences saw both ad and product placement in-show. 

While these results are tied to linear TV programming, these are lessons that advertisers and brands can apply to the Connected TV world, too—with even stronger metrics. This is in part due to the nature of Connected TV, whose non-skippable format provides a perfect environment for product placement. “Consumers are getting very tough to advertise to,” Fossen said. “[They] are consistently using ad-free or ad-reduced platforms at higher rates than ever,” says Beth Fossen, Assistant Professor of Marketing at Indiana University’s Kelley School of Business. 

Fossen’s own research reveals that successful integrations happen earlier in a show, before viewers start to tune out products and tuned into the storyline. Additionally,  according to Fossen’s research—viewers are less likely to fast-forward through a program when streaming. Ultimately, advertisers need to be selective in the way they integrate product placement into their marketing strategy, as it needs to make sense and fit with the program. However, that’s where the challenge ends and Connected TV advertising’s automation capabilities steps in, by serving the right ad across to the viewers who are most likely to engage, resonate and take action.

Conclusion

Product placement is a $23 billion industry, and advertisers are increasingly tapping into it since viewers are tapping out of ads. However, product placement isn’t one-size-fits-all—its benefits vary depending on the type of advertising channel. Studies reveal, however, that combining product placement within a television program alongside a 30-second television commercial featuring the same brand, drives stronger metrics than through either of these methods alone. Ultimately, it stands to produce even better results when layered on with Connected TV’s non-skippable, engaging format that reaches audiences on the content they’re likely to be watching.

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