With the advancement in Internet speed and the introduction of digital television recording software, audience nowadays are able to avoid the commercial breaks in programming with ease. This has prompted advertisers to look for other methods of persuasion, and one of the most popular alternatives is product placement. Because of its more subtle nature compared to traditional advertising, there has been much concern and debate about the proper regulation on product placement, some argue that product placement should be banned completely, others ask for more obvious disclosures, while the advertising and media production industries advocate that the current level of disclosure is adequate. Combining recent research on public opinion, awareness of product placement influence, as well as experiences from other countries, it can be concluded that disclosure on product placement is necessary and could be beneficial to both consumers and advertisers in the long run.
Multiple studies have confirmed the persuasion effect of product placement. Tessitore and Geuens (2013) summarize its effectiveness based on two factors: firstly, product placements are difficult to avoid because it is inconspicuously integrated into the program; and secondly, it is a disguised marketing tactic. The authors argue that due to the lack of awareness of the persuasion attempt, consumers do not actively resist its effects. This proposition is also supported by another study on product placement in children’s movies, and found that nearly half of the parents involved in the experiment were unaware of the extent of product placement use in children’s movies (Hudson et al. 2008). The second study suggests that product placement is inherently deceptive because it is often below viewers’ threshold of awareness.
Although requests for stricter control on product placements have been voiced long ago, up until 2008, the Federal Communications Commission had dismissed these requests based on the evaluation that no actual claims were made. Advocates for more control, on the other hand, state that mere presence, even without explicit claims, could invite inferences as to popularity (Sutherland, 2006). In addition, special consideration should be given to children as an audience group. A study evaluating the understand of advertisement and product placement among children found that children’s understanding of product placement occurs later than that of advertising; also the improvement in understanding of product placement is slower as they age (Uribe et al.
Having established the persuasion effect of product placement, how could we improve consumers’ awareness of it? Some have proposed a complete ban on product placement. Similar to traditional advertisement, product placement provides value in an economic standpoint. Marketing funds in product placements have enabled producers to reduce production costs and provide the audience with entertainment of greater variety and higher quality (Lee et al, 2012). The study quoted the experience of Korea, where product placement is banned, to show that as a result of the prohibition, blurred or modification brand appearances in turn increase attention to the brand.
Though a complete ban on product placement is not encouraged, a review of the current regulation is suggested for broader coverage of the law and additional disclosure requirements, especially when it comes to children’s programming. The current regulation requires broadcasters to disclose any placements made in exchange for money or services. However, the current regulation contains loopholes that result in many product placements unpaid for (Al-Kadi, 2013). This could be one of the reasons that the FCC has decided to review its policy in 2008.
Apart from fixing the loophole in disclosure requirement, supporters for stricter product placement control also request that more obvious and frequent disclosures be made during programming. In fact, product placement warning signs have been employed in certain European countries to be displayed during programming, and it could be useful to look at the effectiveness of the warning symbols. A recent study on the effective of such symbols as employed in Belgium and the United Kingdom found that effective warning is necessary to prompt consumers to resist product placement influence on purchase intention; however the lack of comprehension and awareness of such symbols could significantly undermine the effectiveness of the warning signs (Tessitore & Geuens, 2013). The study further suggests that warning design and education are crucial in the development of audiences’ awareness towards product placement, and hence activate their resistance against its influence on purchase intention.
Another study conducted by the Colorado State University compared the effectiveness of disclosure at different periods of programming – the beginning, the end, and during programming. The results show that product placement disclosures at different time periods produce similar effects and concluded that product placement disclosures need not occur at the time of product placement to be effective (US Fed News Service, 2013). Therefore, instead of merely focusing on when product placement disclosure should be made, the FCC should focus more on how these disclosures are made and additional education efforts to inform the public on product placement awareness.
It is understandable that advertisers would be concerned about the negative impact of increased product placement disclosure on brand image. If advertisers were to stop using product placement, production companies would see a reduced source of funds and this would jeopardize the quality of programming. This chain effect could present a challenge for public policy makers. However, let’s not forget the case of traditional advertisement where the audience is well aware of it commercial intent but still proves to be effective. Product placement could take a similar transformation as well. While increase disclosure might lead to negative reaction in the short run, audience is likely to embrace the concept in the long run and may actually start to appreciate creativity and positive aspects of the product placements, as is in the case of traditional advertisement. This could result in a win-win situation for both advertisers and consumers, where advertisers have an effective channel to market their products, and consumers benefit from a higher quality of entertainment programs funded by advertisers.
In conclusion, current disclosure requirements on product placement could be improved to increase coverage and effectiveness. All paid and unpaid product placements should be disclosed, but instead of concentrating on the timing of such disclosures, policy makers and advocates could consider more about the presentation method and how to better educate the public about product placement awareness. Advertisers are also suggested to view the matter from a long-run perspective and understand that proper disclosure could lead to a positive attitude towards both product placement and the brands employing it.
References
Tessitore, T., & Geuens, M. (2013). PP for ‘product placement’ or ‘puzzled public’?. International Journal Of Advertising, 32(3), 419-442. doi:10.2501/IJa-32-3-419-442
Hudson, S., Hudson, D., & Peloza, J. (2008). Meet the parents: A parents’ perspective on product placement in children’s films. Journal of Business Ethics, 80(2), 289-304. doi:http://dx.doi.org/10.1007/s10551-007-9421-5
Sutherland, M. (2006). Product placement-regulators gone AWOL. International Journal Of Advertising, 25(1), 107-110. Retrieved from: http://search.ebscohost.com/login.aspx?direct=trueHYPERLINK “http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=19754850&site=ehost-live”&HYPERLINK “http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=19754850&site=ehost-live”db=bthHYPERLINK “http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=19754850&site=ehost-live”&HYPERLINK “http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=19754850&site=ehost-live”AN=19754850HYPERLINK “http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=19754850&site=ehost-live”&HYPERLINK “http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=19754850&site=ehost-live”site=ehost-live
Uribe, R., Fuentes-García, A., & Manzur, E. (2013). Children’s Implicit and Explicit Understanding of Advertising and Product Placement. Society For Marketing Advances Proceedings, 25134-135. Retrieved from: http://search.ebscohost.com/login.aspx?direct=trueHYPERLINK “http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=93451537&site=ehost-live”&HYPERLINK “http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=93451537&site=ehost-live”db=bthHYPERLINK “http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=93451537&site=ehost-live”&HYPERLINK “http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=93451537&site=ehost-live”AN=93451537HYPERLINK “http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=93451537&site=ehost-live”&HYPERLINK “http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=93451537&site=ehost-live”site=ehost-live
Lee, M., Kim, K., & King, K. (2012). Audience Responses to Product Placement and Its Regulations: Focusing on Regulatory Conditions in the United States and Korea. Journal Of International Consumer Marketing, 24(4), 275-290. doi:10.1080/08961530.2012.728505
Al-Kadi, T. (2013). Product placement: A booming industry in search of appropriate regulation. Journal of Marketing Research & Case Studies, 2013, 1-13. Retrieved from http://search.proquest.com/docview/1470087498?accountid=11442
STUDY: DISCLOSURE OF PAID PLACEMENTS HELPS CONSUMERS RESIST INFLUENCE OF COVERT MARKETING. (2013, Sep 28). US Fed News Service, Including US State News. Retrieved from http://search.proquest.com/docview/1437327796?accountid=11442

