Product placement: the case of short-termism versus longevity

Those who believe that product placement is the gold standard for subtle brand promotion may have been alarmed to read in Brandchannel this week that Dreamworks Animation has backed out of placements. In "'Megamind' Confirms Dreamworks Animation Has Abandoned Product Placement", Abe Sauer writes, in relevant part:

"The Dreamworks Animation studio's box office hit Megamind took it to the bank this weekend, taking in close to $50 million and contributing to setting a first weekend of November box office record.

Megamind also represents a landmark in product placement for animated films. Not because Megamind is chock full of product placement; but because the film is almost completely free of recognizable products. In fact, the only brand name that can be found in the whole film (Jean Paul Gaultier) is spoken in a passing joke about men's cologne.

What's more, Megamind also has no product placement "jokes," the likes of which were so prevalent in the Shrek series. That is, until the most recent Shrek film, another brand-less children's film that signaled the trend that Megamind now confirms. Product placement in animated children's films might be dead.

The last decade of Dreamworks Animation films is a perfect case study of how the popularity of product placement in children's films has waned and brought the studio back to where it began.

None too subtle: product placement in Tommy Boy (1995)

In 2001, the studio's first film, Shrek, featured zero brands. There were a few jokes about Disney, but mostly the film was clear of product placement. Three years later, that all changed with the release of the studio's blockbusters Shark Tale and Shrek 2. Both films featured only a few real product mentions, yet were packed to the gills with product placement jokes. For example, both spoofed versions of Burger King ("Burger Prince," "Fish King") and Old Navy ("Old Knavery," "Old Wavy"). Shark Tale, a movie that takes place underwater, features an improbable product placement joke about the donut brand Krispy Kreme ("Kruppy Kreme") Parents began to grumble. A year later, Dreamworks' Madagascar featured over 20 product placements, including the real Krispy Kreme. Only the "Spalding" joke on Castaway's "Wilson" was forgivable. ...

But then in 2008, something started to change. The studio released two films (Madagascar: Escape 2 Africa and Kung Fu Panda) that between them only featured one branded product (Apple). This trend continued a year later with the Dreamworks' film Monsters and Aliens with only one visible product.

Now, 2010, where all three of Dreamworks Animation studio's blockbusters, Shrek: Forever After, How to Train Your Dragon, and Megamind, share but a single product placement amongst them. Next year will prove once and for all if Dreamworks Animation has gone product-free as the studio will release both Kung Fu Panda 2 and Shrek-offshoot Puss in Boots.

Dreamworks may have transitioned its films to remove product placement as an answer to parent criticism. But there is a practical reason to keep animated films free of product placement too: Longevity.

In fact, when it comes to product placement, Dreamworks Animation's films are beginning to resemble those of the market leader, Pixar. ... Pixar's undersea film, Finding Nemo, remains a children's favorite, while Shark Tale loses relevance with each passing year ...".

There's an interesting trade-off here.  Product placement = money on the table before the movie is launched and is therefore certain income.  In the case of animations, the movie's commercial success, and therefore the value of the placement, is likely to be higher than in the hit-and-miss market for films aimed at general release or for the adult market.  By not cashing in on product placement opportunities, a studio "buys" the prospect of longevity, but income from longevity depends on the ability to keep on cashing in on sales, broadcasting and other mainly traditional business models that are struggling to deliver the cash in the new digital environment.

One technically feasible solution, if longevity is sought, is to ensure that the movie is not rendered stale by the products placed within it.  How about short-term product placements, renewable only if the placed brand fulfils criteria laid down by the studio when the film is first made?  Come to think of it, why not segment the market and release the same movie with different branded products to suit the cultural and commercial preferences of local audiences?

The brand cameo matrix

Writing for brandchannel ("Product Placement In 2009 Oscar-Nominated Films: An Approval Matrix", here), Abe Sauer comes up with this a-picture-is-worth-a-thousand-words diagrammatic representation of the fluctuating fortunes of those brands whose strategic product placement in Oscar-nominated movies was designed to provide market-positive exposure to the right sort of consumer. What it would be good to know next is how much was paid for each brand cameo and what sort of return one might expect on one's investment in product placement in even the more successful of the year's films.

British MPs angry at TV programme product placement ban

Product placement is an acceptable and indeed desirable way for US brand owners to purchase and retain the attention of consumers who might be put off by conventional advertising. This probably gives US brands the edge over European brands, which have been hampered from placing their branded products in TV productions. Brand Republic reports that 39 Members of Parliament are currently in revolt over the Government's refusal to allow product placement in British TV programmes. The Angry 39 have signed a Commons Motion urging the Culture Secretary Andy Burnham to do something about it.