December 5, 2019

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Product placement: advertising participates to film financing


Written by Sébastien Lachaussée

& Vincent Krohn

Product placement means the integration of a product or brand into the script of a film, a television series or any audiovisual work, in order to make it recognizable on the screen or quoted by a protagonist. The primary objective is that the product is remembered, consciously or not, by the viewers.

            Product placement is divided mainly into three categories. First of all, there is the classic placement, which consists in using the brand’s name or product directly into the actor’s lines of the script. Second of all, the product can be subject to an "evocative" placement, which involves the use of the product or brand in a recognizable way, but without mentioning or presenting it. Finally, the placement can also be “stealth”. Less aggressive to the viewer, it aims neither to quote the product nor to make it clearly visible so that its identification is not automatic (ex. Costumes in "The Fifth Element" for Jean-Paul Gaultier).

            Because of the need to adapt the commercial market, the French regulator (CSA), through a resolution taken on February 16th 2010, authorized the use of product placement, not only in movies, where it was already allowed, but also on television. However, this practice, which had a progressive historical development (I), is rigorously controlled (II), and has for now not had the expected success with advertisers (III).


I)               A progressive developpment


            This practice of product placement is not new, since it originated in the late nineteenth century. Indeed, before movies and TV became the main support of this commercial phenomenon, the actors in cabarets acted as advertising spokesmen. But literary and art piece were also a way to promote products. The result is for instance the presence of a bottle of beer, which brand is recognizable in Edouard Monet’s work Un bar aux Folies Bergère (1881-1882). Meanwhile, cinema becomes the subject of product placement with the emergence of silent movies. Consequently, cars of the brand Ford are found in the credits of Mack Sennett’s comedies or even in the title of the cinematographic work "She wanted a Ford” in 1916. In France, Georges Méliès had shown a well-known brand of champagne on the screen of his film entitled "Barbe Bleue” (“Bluebeard", 1901).

            The 1940s, representing the "golden age" of American cinema, will promote the product placement, because the studios understand quickly that working closely with brands could give them access to free accessories and services or even allow them to increase the film's budget. It follows the presence of products placed in films such as "The Best Years of Our Lives" (1946) or "Skylark" (1941), where the protagonist wears jewellery of a great brand.

            Yet experts believe that the real anchorage of this phenomenon lies in 1982. That year, the theatres showed Steven Spielberg’s "ET", where the placement of Reese's Pieces candies increased their sales by 65%. Since then, product placement truly became a common practice in the United States that lasts to this day and is constantly growing.

            However, there is in terms of product placement a remarkable cleavage between the United States and France. Indeed, while for the year 2007, the investments of product placement in French cinema were up to € 20 million, the film "Minority Report" directed by Steven Spielberg in 2002, had, by itself, a budget including $ 25 million resulting entirely from product placement. In 2006, had been invested $ 3.458 billion dollars in American cinema and two years later already more than double.

            Contrary to France, this practice is also widely used on American television and finds there similar success.


II)              The regulation of product placement in France


            The success of product placement experienced by the United States can be explained by the complete absence of statutory or legal regulations governing the matter, whether for film or television. In France, the product placement was able to be developed in the cinematographic sector for the same reason, since a legislative framework did not exist. Yet, this technique was used in a much more moderate way. Following a Directive of the European Union (EU) from 1989, the implementing law of 1992 forbade at the the time strictly product placement with the exception of placements in cinematographic works, without defining regulation for the latters. The CSA settled for this tolerance for films, without any regulation, which caused doubts and hesitations among French professionals.

            On December 11th, 2007, a new European Directive called "Audiovisual Media Services without frontiers" (SMA), taken by the European Parliament and the Council, changes the game. Indeed, while reaffirming the prohibition of product placement in television, this Directive establishes exhaustively listed exceptions to this principle. Thus, the members of the EU may now allow product placement in cinematographic works, films and series created for audiovisual media services, sport programs and entertainment. Consequently, after consultations with relevant parties (advertisers, producers, directors, TV channels), a new implementing law was passed concerning the audiovisual communication and the new public television service, on March 5th, 2009. This law puts the CSA in charge of developing the conditions enforceable for product placement in cinematographic works, television films and series and music clips, which are allowed, except when these programs are intended for children. The law is more restrictive than the Directive, since it does not yet allow the product placements in sport programs and entertainment. Although the Directive and the law mention cinematographic works, the purpose is only to give this practice a legal basis. It is the same for the deliberation of the CSA on February 16th, 2010, which merely mentions the cinematographic works, and only regulates product placement on television.

            The CSA said in its ruling that can’t be placed on television: beverages with more than 1.2 percent of alcohol, tobacco, tobacco products, medicine whether or not subject to medical prescription, firearms and ammunition, except on some television services, and infant formula.

            Also, the CSA imposes formal requirements, for instance that product placement should not influence the program in order to affect the responsibility and editorial independence of the editor or directly encourage the purchase or the rent of the products, and that programs should not put undue prominence to the product, service or brand concerned. In addition to these conditions, the Council dictates terms on how to inform the viewer of the presence of placed products, especially through the presence of a pictograms on the screen. This symbol must appear for one minute at the beginning of the program, for one minute after each commercial break and at the end of the program for the duration of the end credits. For music-videos, the icon must be present on the screen for the entire running time of the clip. Furthermore, for a period of two months from the date of the first broadcast by the editor of a program with placed products, the icon must appear for five seconds at the beginning of the broadcasted program in a banner along with the following sentence clearly legible "this program contains product placement". After the broadcast of this banner, the icon appears in the terms mentioned above. After two months the banner isn’t required anymore.

            One of the most influential protagonists in this phenomenon is the product placement agency whose job is to identify potential placements after analyzing some scripts and to look for the best suited brands for the works or interested institutions. For the outcome of a product placement, either the advertiser or the producer contacts the agency to bring the parties together in order to negotiate. After a first meeting, the advertiser, producer, director and editor of a television service, (if the placement is done in a program which is co-produced or pre-bought by the editor), start negotiations paired with the consultation of all persons who may be involved: the director of photography, production designer, set decorator, property master, costume designer, wardrobe supervisor, transport coordinator and/or location manager.

            The contract which implements the product placement incorporates all the agreements and reciprocal obligations, and can link different people depending on whether it’s a cinematographic work or an audiovisual fiction. If the product placement is done in a television program, the main parties of the contract are the advertiser, the producer and the editor of a television service, if the conditions mentioned above are met. However, if this technique is used in a cinematographic work, an agreement between the producer and the advertiser is sufficient. Nevertheless, the director, being author of the work, has a decisional weight in this matter, too, which has to be managed by the producer, whether in the copyright transfer agreement or in the product placement agreement itself. That’s not the case in the United States where the director must submit to the producer’s and the advertiser’s will, without having this “veto”. Furthermore to this product placement contract, has to be signed an agreement between the advertiser and the actors, if the advertiser wishes to use the actors to stage the product.

            This product placement agency, or the advertiser directly, then proceeds to a monitoring of the placement of the product during the making of the film and to a control of the promotional campaigns. This step is very important since some scripts evolve and sometimes change during shooting. So they make sure that the product is still actually placed. This monitoring goes beyond the film set and may continue in post-production, especially for movies like "Matrix Reloaded" (2003) or "Avatar" (2009) which have a lot of special effects.


III)            A practice which has a hard time taking of in France


            Product placement has been in force for two years in French television and it appears that the overall balance of this practice is mixed. There is first of all a reluctance coming from critics and viewers to the fact that it is no longer possible to bypass advertising and that the viewers are therefore subject, even unconsciously, to the influence of advertising. Product placement on TV takes the same disappointing pace than product placement in cinema. And although in the latter case, the practice has been around much longer, the budget shares in big budget films in France do not exceed 5% (versus 30% in the U.S.). Thus, Dior, Tissot etc. funded 3%, representing € 588,000 of the budget of "Les Chevaliers du Ciel" (2005), whereas the brand Apple alone, financed about 16%, that is to say 23.5 million dollars of the film "Mission Impossible: Ghost Protocol" (2011). The latter has for that matter invested in 2011 nearly 50 million dollars in product placement in American cinema.

            According to a study conducted between February 15th and March 15th with 83 advertisers by the Union of Advertisers (UDA) and published in April 2012, it is emphasized that this technique has a great difficulty being integrated in the advertiser’s practices. Thus, only 49% of the respondents had the opportunity to practice at least one product placement since 2010, of which 23% placed in television and 11% dedicated to it a portion of their budget. However, this share doesn’t exceed 1% for 60% of the advertiser’s net communication budget and not 5% for 97% of them. Yet a majority of the advertisers who used product placement seem to be satisfied with this operation, especially regarding the criteria of visibility (73%), image (73%) and reputation (64%). They also consider that this practice has the major advantage of having the ability to position their product (80%) and to provide the products of the image of the program or the actor (64%). They also consider that this practice has the major advantage of having the ability to put their product in action (80%) and to have it benefiting from the program’s or the actor’s image (64%). In addition, these product placements enrich the work by allowing to bring credibility to the story. The film is often a reflection of reality and this world, which is by definition fictional, has through product placement a higher chance to be realistic. Since producers and TV channels require from the screenwriters some realism in their writings, the latters have more flexibility thanks to product placement and are thus no longer compelled to not mention any brand. But this new flexibility open to them may also have the opposite effect to the extent that there is a risk of interference from the advertisers who want to ensure that writers properly place the product.

            The advertisers also use this technique with temperance, because they do not want to overwhelm the viewers with their placements and cause the opposite effect. Beyond that, the advertisers fear to exceed the boundary somewhat unclear posed by the CSA. Despite the interest for this practice, there are some downsides that are primarily the difficulties to measure the actual efficiency of the placement for advertisers, and the lack of control they have on the actual appearance of their product on the screen, and on the release date. For a significant minority of the French advertisers (40%), product placement is a matter of opportunity, while in the United State the films that do not have any placed products, are rather rare. In the latter case, the absence of placed products is generally due to the historical context of the film (ex. "Pirates of the Caribbean: On Stranger Tides", 2011, "Cowboys and invaders", 2011).

            To make more use of this technique, the advertisers would like the CSA to expand the sector in which product placement is allowed to TV shows and entertainment programs (65%). This request is not irrelevant, given that neighboring countries such as Germany, where product placement is allowed in TV movies, series, sports programming and entertainment since April 10th, 2010, do permit it. And, according to Prof. Dr. Helmut Volpers (FH Köln), who did a study on this topic, product placement in Germany did not cause any impairment on the editorial independence. He considers furthermore that this practice is subject to a coherent regulation and that it’s still far from its potential. Moreover, the risk of too many products appearing on the screen must be qualified, because, although there are legislative and regulatory limits, the advertisers themselves shouldn’t want to place in an excessive amount or in obvious ways. They try to place their products in programs that match their image and reach the targeted group of consumers. The presence of too obvious placed products can backfire.


            Product placement is a promising advertising mean that will grow in the coming years. It will probably not reach in Europe the level of the United States who have a cinematographic and audiovisual industry, that is decisive worldwide and therefore attracts major advertisers. However, the scope for growth is huge in this area.

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