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How Product Placement Can Be a Big Win for Small Advertisers

In the past few years, an influx of people have cut the cord and walked away from traditional television service providers. The abundance of streaming video services available, which provide endless, near-commercial-free content, is a major contributing factor. While these subscription-based services provide movies and television shows, they have all made significant investments in original programming. Netflix alone is spending over $6 billion a year on original content—a hefty amount that the monthly $9 subscriber fee isn’t going to cover. It’s no wonder, then, that Netflix, a service that’s famously abstained from any disruptive form of advertising, has embraced the concept of product placement advertising.
Product placement is not a new concept; its use has paralleled the gradual decline in television advertising. A company pays a fee to have its product used, displayed or otherwise significantly featured in a movie, show or other media outlet. In today’s media landscape of commercial-skipping and “ad blindness,” product placement is quickly becoming a popular way for brands to reach their target audience in more subtle ways that don’t break the program’s narrative. In fact, such product additions—whether it’s a particular car, store or other product used—can even add an extra dimension to the characters.

Though big brands have the marketing budgets to put their products and services in shows like House of Cards and Shameless, regional advertisers have a harder time taking advantage of such opportunities. One way local advertisers can break into the product placement space is through social media influencers. These influencers (particularly on YouTube) have millions of followers and will happily wear branded clothing or use branded items to spread the word about a product or service to their fan base—for a price, of course. This type of advertising is especially effective for marketers looking to reach the Millennial and Generation Z audiences.

Product placement via social media influences lets advertisers directly access their target market in huge numbers. Opportunities offered through social media platforms have essentially created a new form of product placement advertising. Rather than simply dropping a Pepsi into a television show, social media influencers can endorse brands in their Tweets, posts and videos, offering advertisers a much more blatant testimonial of their product or service.

The bottom line: Product placement provides a lucrative, fast-growing revenue stream for publishers. Advertisers have spent over $8 billion—a figure expected to double in the next couple of years. (And that’s a lot more than a few cans of soda.)

Rita O’Connor, Media and Traffic Coordinator, contributed to this blog post.


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