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So the production company buys the mixer or the shoes?

Actually, no. More often than not the manufacturer supplies the product or actually pays a fee to have it included in a show. Usually a beer, soda, and athletic shoe company will pay to have their product in a film but not always. Nothing is ever a sure thing in this business. Certainly the exposure, the type of film, the stars, the director and the distributor will have an impact upon the value of the placement. The bigger the film or star, and the better exposure for the product, the higher the stakes.

In addition, companies are not limited to product exposure alone. A company may also receive exposure from the logo appearing on a Tshirt or billboard; a verbal mention of the name of product; or, a combination of the two.

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Does product placement work?

Of course. Do you think I would be in this business if it didn't? Studies conducted by members of Brigham Young, Houston, and Georgia Universities, as well as independent research companies, all show that product placement has a notable impact in today's market place.

For the production company, it saves them time and money in searching for a specific product, reduces budget expense and it creates realism in the show. Remember plain wrap who really used that stuff? Product placement also reduces negative costs and generates additional revenue through tie-in promotions and licensing.

For the manufacturer, product placement also has many other benefits. It increase brand awareness and recognition; it provides celebrity endorsements, increases sales; and it provides a competitive edge. It also has a lower CPM than other traditional forms of advertising and marketing, and opens the door to tiein promotions and licensing opportunities. In fact, with one film placement, you may target 5 ancillary markets, such as domestic release, international release, pay per view, cable, TV, and video.

It is a money making proposition with unlimited potential. It's a virtual unknown gold mine that is both cost efficient and cost effective.

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Cases in Point:

Prior to ET Reese's Pieces was a relatively unknown candy with it's sales considerably lower than M & M's. After the lovable alien followed a line of Reese's Pieces to a record box office gross in 1982, the sales of the candy leaped 66% in three months. There's also Red Stripe Beer. Red Stripe was a small import beer from Jamaica before it was seen in The Firm. Once Tom Cruise took a swig, sales increased by 53%. Then there's the dress Demi Moore wore in Indecent Proposal. Rumor has it that Twentieth Century Fox had to open an additional phone line to answer calls they were getting to find out who made that dress. And, I can't tell you how many phone calls I received while working at Warner Bros; asking who made the backpack Julia Roberts carried in The Pelican Brief or who made the glasses Harrison Ford worn in The Fugitive. With the addition of tie-in promotions a company may profit regardless of whether a movie does well or not. For instance, take Subway Sandwiches and the movie Coneheads (Paramount Studios, 1994). Although the $20 million movie made only $21 million at the box office, during the 6 weeks it ran, with the tie-in promotion, Subway recorded the highest sales increase in any time during that year.

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How does a company get involved in product placement?

Product placement can be more complicated than it seems. Generally, it is handled through advertising agencies, public relations firms, direct negotiations between the studio and the advertisers, and by independent product placement agencies that serve as brokers between the manufacturer and the studio.

Some companies pursue product placement on their own or get exposure without even trying. And, in most these cases these companies are only aware of the projects that are brought to their attention and/or are just plain "lucky."

I prefer a more "active" approach. That is why I founded RAD PRODUCTIONS. I actively seek placements for my clients. I contact studios and production companies and negotiate deals on my client's behalf. Since I've been in this business for five years I've been fortunate to make really good connections with people which enables me to optimal placements.

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