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What Role Should Product Placement Play?

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The role of product placement is increasingly important for the emerging online video community to discuss.

The issue is popping up all over the place this week. At the congressional hearings on video last week, Phil Rosenthal denounced “product integration,” where writers and actors end up “not only placing the product in the scene but making the product a part of the storyline,” without having a say in the matter. Rosenthal created Everybody Loves Raymond and was representing the Writers’ Guild and Screen Actors Guild.

And yeah, it’s Kevin Nalty day here at NewTeeVee, who brings his uniquely insightful combination of online video creator and online video observer. Nalts deconstructs the product placement conflicts in fine form in his most recent video (which we also featured earlier today), splitting out his creative side and his marketing side.

Nalty explains on his blog, “I was passed over for YouTube’s ad-sharing “partner” program, so it’s time for more product placement videos. For $1K-$5K, Nalts will make a custom video that will appear on his popular YouTube channel and other online video sites.”

We last addressed product placement in March, when we noted PQ Media forecasts internet product placement spending to grow 38.3 percent to $13.7 million in 2007, up from $10 million in 2006 and $7.2 million in 2005.

Nalty says his video was a response to last weekend’s L.A. Times piece on product placement by David Sarno, which covered Renetto hooking up with Waterstone Musical Instruments, the Lonelygirl15 team treating placed product as characters, and Nalts posting a video for GPS Maniac.

YouTube stars seem to be happy about the opportunity to getting paid — Lonelygirl’s Miles Beckett says, in his defense, “every inch of our world is branded.” But they also realize the risks: “It’s getting hard these days to even talk about a good movie you’ve seen,” [Paul “Renetto”] Robinett said, “because I know people who have been paid by movie companies to do that very thing.”

Others have more grave concerns — Rosenthal calls product integration on television “insidious” for infringing on writers’ and actors’ freedom and “exploit[ing] emotional connections viewers have with shows.” Online video creators may not be quite as organized, but their situation is hardly any different.

Momus, a.k.a Nick Currie, who reminds us that the European Union plans to ban online “astroturfing,” or praising a product without disclosing your professional relationship with it, opines at Wired.com:

Anyone with a video blog is, potentially, just one irresistible offer away from becoming a corporate stooge, a sock puppet, a product placer, an astroturfer, a shill. An industry that once confined itself to Madison Avenue is now operating from your town, your street, your bedroom. It’s using your voice, your sex appeal, your mannerisms. If you can grab eyeballs, it’ll pay for them.

So does product placement make you worried or excited?

11 Responses to “What Role Should Product Placement Play?”

  1. As a consultant to the industry, we see two characteristic forecast trends emerging in the practice of product placement online.

    These are as follows:

    i. online video content produced in the forseeable future will be clickable and viewer activated via video hyper-links (VHL) in content for e-tail purposes;

    ii. online auction marketplaces such as brandfame, storybids and our own will emerge as conduits between advertisers and content producers.

  2. I’m very excited about product placement cause that’s what our whole business model is build around. We work hard to find brands that need to explain their products or services to 18 to 34 year old males and when we find a match we have sexy French Maids explain How To use the advertiser’s product.

    Without product placement we don’t create new shows.

  3. susan

    So what is it really that rosenthal is upset about — the fact that product integration threatens the integrity of the artistic process or the fact that the actors and writers aren’t sharing in a cut of the oreo revenue? Sounds to me like it’s the latter. . . .

  4. james C.

    Way back in the late-80’s, there was a film script circulating entitled Mac & Me, which got made. Guess who funded? Guess where many scenes were shot? I swore that was the end of films as we knew them. (HINT: “Mac” — not the cosmetics)

    So, today, as the rebellion against Pre-Roll seems to have already won, (before Pre-Roll even figured out new campaign formulas), all we are left with is product placement.

    In fact, as product placement doesn’t have a time lag for its Media Buying cycle, it is the ONLY method to monetize original internet content that is remotely viable fpr Producers

    Let’s just live with it. Or, unplug.

    For all those new tech Networks who spent millions developing dynamic Pre-Roll Ad solutions, time to re-think (or cash out)…

    Please note: YouTube’s terms and conditions prohibit producers from using their metrics if they are being paid for product placement on a CPM basis (or, presumably, even on a Flat, if the metrics are used to support any paid placement).. We tried to push them to open that up on a Rev Share basis a year ago, but, they weren’t interested (revenue, who needs it?).