Product placement has its place.

And so, maybe, does subtlety.

Out of this world:  a product placement that drove sales up 80%.  Free.

Today, some 25 years later, there is still probably some poor soul at M&M/Mars whose only job is to spend the day kicking himself for passing up the product placement opportunity in E.T., The Extra Terrestrial that instead went (for free) to Reese's Pieces.

This one event, now known as the classic story of product placement in media, drove Reese's Pieces sales up 80%.  Pretty much accidentally.

But it's no accident that the product placement business is now worth over $3.07 billion in cash annually, and over $7 billion total counting tradeouts, barters, and other deals.  There are websites devoted to listing the product placements in movies and TV shows, and consumer watchdog groups that have been formed to call out examples of when an advertiser is trying to put one over on unsuspecting viewers by sneaking in a paid placement.  

Product placement is routine in movies and on television. Negotiations to get products into movies and programming are an integral part of production and rewrites to make sure products are included are common.  Product placement is considered critical in video games, particularly as a way to reach young males, who are difficult if not impossible to find with other media.  Product placement is also beginning to show up in print media.

And if you think debate is big on movies' use of products, take a look at what happens when publishers start wrestling with the fine line between journalistic integrity and advertising profits.

But none of this is really new.  Product placement in movies goes back to almost the first reel.  in the 1932 production of Scarface, the White Owl Cigar company paid $250,000 to be able to promote the fact that the movie's star smoked its brand.  That's a quarter million dollars during the Depression.  It also has a history in print. In Jules Verne's 19th century written serial, Around the World in 80 Days, shipping companies vied to have their names mentioned as part of the travels.

And there's just one real reason why so many dollars are devoted to this function:  when it works, it can work in a big way. 

The James Bond franchise, no stranger to product placement, made Aston Martins cool, but didn't put one in every garage.  That changed when Bond began driving a BMW Z-3 and helped turn it into one of the most successful new model introductions ever.  But even the most suave of spies can overdo it; critics and viewers alike panned Tomorrow Never Dies because of its overt use of product placements to the point of turning the audience off to products.

GM is betting big on the success of the Transformers movie by making sure that four of the transforming good-guy cars in the flick are its models:  A Hummer H2, A GMC TopKick pickup, and Pontiac Solstice convertible, and a Chevy Camaro (currently out of production, but slated for re-entry next year). Transformers is on track to be the third largest grossing movie of 2007.   Will moviegoers make the connection with GM?   

Studies also show that products can be driven by placement in movies even if a brand isn't mentioned.  In Sideways, the wine-lover's movie of 2004, sales of Pinot Noir rose 22% within a month of the movie's release, even though a particular brand wasn't discussed.  And because Paul Giamatti's character refused to drink Merlot, sales of that variety dropped.

Products don't have to be real to get a boost.  In fact, reverse product placement, where an item in the movie becomes a product is an intriguing phenomenon.  In the 2004 movie Napoleon Dynamite, Napoleon's "Vote for Pedro" T-shirt caught on so well with viewers that fans started making their own, and the shirt ultimately became one of the Top-25 selling designs of the year.  Seven-Eleven, in honor of the just-released Simpsons Movie, converted a number of its stores nationwide into Kwik-E-Marts, the C-store in the cartoon series, and featured Springfield products like Squishies. 

Over-the-top connections like these between products and media don't seem to bother anyone, and in fact, add to the entertainment value.  But when product placements become less than subtle, people start getting nervous.  When the New Yorker allowed Target Stores to be the sole advertiser in one issue, critics began wondering if things had gone to far, especially since the magazine didn't feature regular ads (just Target's bulls-eye logo) and since the publication didn't explain that it was being sponsored solely by a single advertiser.  While not exactly product placement, this event seemed to fuel debate in the print media about how it could take advantage of the dollars available and not violate advertiser/editorial ethics issues. 

In late 2006, another print publication created similar controversy.  Cathy's Book, If Found Call (650)-266-8233 is a novel targeted to young teens.  It is designed like a girl's journal, and the story covers a mystery involving Cathy's boyfriend, and his whereabouts after their breakup.  Readers could also view a MySpace page about the protagonist and call working phone numbers for clues. 

After the book was written and illustrated, the author's agent struck a deal with Proctor & Gamble to tie in product placements.  The authors re-wrote sections to eliminate rival Clinque's makeup and include P&G's Cover Girl brand. 

This prompted consumers groups around the country to write to newspapers and magazines, asking them not to consider the book as literature but as a paid advertisement. 

The interesting thing about all this is that a recent search showed a number of high school teachers using the book as part of their student's reading assignments.  Teachers cited the uniqueness of the story and the interactive elements that get their students into the book and keep them reading.  Few of them seemed to notice the furor over the product mentions, and none of them seemed to actually notice the products.

It's going to get harder to discern where placements are being made.  Software is now making it possible to allow products to switched within movies and TV shows, based on audience demographics, regions, and other factors.  Currently, the technology allows changes on flat planes like billboards, but look for 3-D switchouts in the not-so-distant future.

So--does all this mean that we're destined for a world where the lines are so blurred that we can't spot the ads anymore?  We'll defer back to David Ogilvy, who decades ago pointed out that "the consumer is not a moron; she is your wife."  If anything, today's consumers are probably more aware than those of past years when a message is pointed in their direction, and they'll turn an advertiser off with a vengeance if they think the product's being intrusive. 

Which leads back to subtlety and context.  Product placements in media have to be part of the story. No one thought it out of the ordinary for Forrest Gump to drink Dr. Pepper during his visit to the White House.  We'll buy that, and we'll feel good about Dr. Pepper, even if we think it was a product placement.  It seemed perfectly natural to us that an alien would have a sweet tooth for candy-covered peanut butter.

However, we get a little uncomfortable if the lead actor turns toward us so that we can see the perfectly-turned label of the bottle he's drinking from.  Break the barrier of fantasy and reality, and your product placement could be done for.

But if you happen to be watching a movie and see something that you just can't live without, check out http://www.evisure.com, a website that lists product placements (by category) and where to buy them.  If you just want to see what products are in different movies, go here:  http://www.brandchannel.com/brandcameo_films.asp.

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