What is Product Placement?
Product placement is when a brand pays to have its product appear inside a movie, TV show, video game, or other piece of media, rather than running a separate advertisement around it. Instead of a 30-second commercial break interrupting the show, the product shows up inside the story itself. A character drinks a specific soda, drives a specific car, or uses a specific phone, and the brand behind that product usually paid for the privilege.
What Counts as Product Placement?
It ranges from very subtle to very obvious. On the subtle end, a can of a recognizable soft drink might just sit on a kitchen counter in the background of a scene, never mentioned by any character. On the obvious end, a character might specifically name the brand, praise it, or the whole plot might revolve around using the product. Somewhere in between, a car brand might supply the vehicles a whole cast of characters drives throughout a series, which is common in shows built around wealth or action.
It’s worth being clear that not every branded item on screen is paid placement. Sometimes a prop department just grabs a real product off a shelf because it’s realistic and nobody has paid for it either way. Paid product placement specifically means money or some other benefit, like free product or vehicles, changed hands in exchange for that appearance.
Why Would a Brand Choose This Over a Regular Ad?
A regular television commercial is easy to skip, easy to mute, and viewers know exactly what it is: an ad trying to sell them something. Product placement gets around some of that resistance because it’s woven into content the audience has already chosen to watch and is paying attention to. We’re not interrupting the story, we’re inside it.
There’s also a credibility effect. If a likeable character genuinely uses a product as part of their normal life on screen, it can feel like a more authentic endorsement than an actor reading a script in a commercial break, even though in reality it’s still a paid arrangement. And because streaming has made it much easier for viewers to skip ads entirely, placing the product inside the show itself is one of the few advertising formats a viewer generally can’t fast-forward past.
A Classic Example: Reese’s Pieces in E.T.
One of the most cited examples in marketing courses is Reese’s Pieces in the 1982 film E.T. the Extra-Terrestrial. According to widely reported accounts, Mars, the maker of M&M’s, was approached first and turned down the opportunity to have its candy used to lure the alien character in the film.
Hershey’s Reese’s Pieces brand said yes instead. Reports on the exact sales increase that followed vary, with figures ranging from roughly a 65 to 85 percent jump reported in different accounts, but there’s broad agreement that sales rose substantially and that the brand’s visibility increased enormously.
What makes this example useful for us isn’t the precise percentage, which historians and journalists still don’t fully agree on. It’s the lesson underneath it: a well-chosen placement, in the right story, at the right cultural moment, can generate a level of exposure that a comparable advertising budget might struggle to match. And the brand that said no, Mars, missed out on that exposure entirely, which is presumably why the story gets retold in marketing classes so often.
Another Example: BMW and James Bond
BMW supplied vehicles, including the Z3 roadster, for the 1995 James Bond film GoldenEye, with the car appearing in the film’s marketing and on its poster. The tie-in was effective enough that BMW reportedly sold through the Z3’s entire first year of production on pre-orders alone, before most customers had even seen the car reviewed anywhere else. Bond films have used a long list of car brands over the decades, and the association with a sophisticated, competent central character is exactly the kind of image transfer product placement is meant to achieve.
What Are the Risks and Downsides?
Product placement isn’t risk-free, and we shouldn’t treat it as an automatic win just because the E.T. and Bond examples went well. A film or show can flop, in which case the placement gets far less exposure than expected, and the brand rarely gets a refund. A film can also fail critically or attract controversy, and depending on how bad that gets, the brand’s product may end up associated with something it would rather not be near.
There’s also very little creative control. Unlike an advertisement the brand writes and produces itself, a placement is embedded inside someone else’s story, and the brand usually has limited say over how exactly the product is portrayed, how much screen time it gets, or what happens around it in the scene.
How Do We Know If It Actually Worked?
Measuring the return on a product placement is genuinely difficult, more difficult than measuring a normal ad campaign. We can track sales in the months after a film or show releases, as people did with Reese’s Pieces, but it’s hard to isolate how much of any sales bump came from the placement specifically versus other things happening in the market at the same time.
There’s no click-through rate or impression count the way there is with digital advertising. Most of the evidence we have is sales trends and brand awareness surveys, both of which are influenced by plenty of other factors too.
What Do Marketers Actually Have to Decide?
If we’re considering product placement as part of a marketing plan, the first question is fit. Does the show, film, or game actually reach the audience we’re trying to reach, and does the tone of that content match how we want the brand perceived? A placement in a project that later turns out badly received can do more damage than a placement that never happened at all.
We also need to think about lead time. Film and television production schedules run months or years ahead of release, so a placement decided on today might not reach audiences until well after the marketing plan that inspired it has moved on to something else. That makes it harder to coordinate placement with other campaigns happening closer to launch.
Cost and negotiation also matter. Prominent, spoken placements cost far more than a background appearance, and the brand is often negotiating with a studio or production company that has its own creative priorities, which don’t always align neatly with what the marketing team wants to show off.
Finally, there are legal and disclosure requirements to consider, particularly in areas like influencer content and reality television, where regulators in several countries require paid placements to be disclosed to the audience.
Used well, though, product placement remains one of the few advertising formats that gets in front of an audience that isn’t actively trying to avoid it, which is exactly why brands keep paying for it despite the risks and the difficulty of measuring the payoff.
Key Points to Take Away
- Product placement means a brand pays for its product to appear inside media content, rather than running a separate advertisement around it.
- It can range from a subtle background appearance to a product playing a central role in the story.
- Well-known examples like Reese’s Pieces in E.T. and BMW in GoldenEye show placement can generate exposure that’s hard to match with standard advertising.
- The brand usually has limited creative control and no guarantee the content will succeed or be well received.
- Measuring the actual return on a placement is difficult, since there’s no direct click-through or impression data to rely on.
- Fit with the audience, lead time before release, and disclosure requirements all need to be weighed before committing to a placement deal.
