A phenomenon as old as movies themselves
In 1888, the first known work of moving picture made its turn on the screen, when the inventor Louis Le Prince produced his groundbreaking "Roundhay Garden Scene." It was impressive and downright mind-blowing. (Le Prince, however, disappeared before he had a chance to see his invention take over the world.)
Nearly as mind-blowing as what happened in a garden that day was a short film that came eight years later. Inventive Swiss marketer François-Henri Lavanchy-Clarke, who worked for Lever Brothers near the turn of the century, was one of the first to see the advertising potential of cinematography.
Lavanchy-Clarke used moving film to hold events as a way to promote the Sunlight Soap, Who's Who of Victorian Cinema notes, but there were times that he took it beyond the point of mere association.
Two 1896 films masterminded by Lavanchy-Clarke have the rightful stake on being called the first "product placement," depending on what you think the term might mean. "Wash Day," which came first, was more overt about its promotion of the Sunlight brand, which might make it closer to the first advertisement. It showed a family washing clothes using the soap.
But "Défilé du 8e bataillon," which came later that year, was more subtle. Showing off a parade, the branding of the 45-second clip doesn't take hold until about halfway in, when a wheelbarrow suddenly shows up on the scene—sporting a logo for Sunlight Soap. That's kind of how product placements generally work. If the former doesn't count as a product placement—but rather, as the first commercial—this one definitely stands out as a product placement.
From there, product placement slowly began to grow. In 1927, the first Oscar winner for Best Picture, Wings, prominently featured a bar of Hershey's chocolate, ensuring that it would become a trivia question for generations to come.
In recent years, these ad placements have become more prominent for two reasons: First, they help subsidize a film or television program's production costs somewhat seamlessly, and they actually work a lot better than the alternative. Like Mr. Clean next to a tub full of grime, it's nice to have them around.
"When products are inserted into storylines, they can be more effective than traditional ads. They’re better at grabbing attention. They can be more cost efficient," the quite-excellent blog Priceonomics noted in 2013. "They can’t be muted or skipped over the way typical ads can be. And yes, research shows that they’re highly influential—particularly when used to generate positive impressions of a brand or to change consumers’ perceptions about a product."
They're easy to parody—the 1992 classic Wayne's World featured an amusing scene that parodied product placement while accepting money for product placement—but as Rob Lowe put it in that movie, "I'm sorry you feel that way, but basically it's the nature of the beast."
When you can put Oreos in a scene of a popular TV show, it means that another production manager gets his wings. Easy as that.
The future of brand placement is six seconds long
Twitter's Vine service has created minor celebrities out of creative teenagers—and like a lot of social networks, the monetization opportunities weren't obvious at first. (This paragraph is sponsored by Hardee's.)
But just as a fast as Denny's got its hash browns on Fleek, the brands came to the clever Vine stars. Bottles of Coca-Cola (Editor's note: RC Cola) got handed out to some of these kids with immense speed. And it's understandable why—in a matter of months, some of the more talented six-second artistes had managed to create follower bases in the millions, as well as driving loops on their videos even quicker than that.
The looping nature of the videos is pretty epic from a brand standpoint, too. Marketing is all about repeating brand messages—the term "effective frequency," how branding becomes more effective over time, is a pretty good way to think about this—and when something's repeated, you're more likely to remember it. Vine repeats those messages over and over again—making it a perfect marketing vehicle.
The looping nature of the videos is pretty epic from a brand standpoint, too. Marketing is all about repeating brand messages—the term "effective frequency," how branding becomes more effective over time, is a pretty good way to think about this—and when something's repeated, you're more likely to remember it. Vine repeats those messages over and over again—making it a perfect marketing vehicle.(Yes, I posted this paragraph twice to feel more like a Vine user. Sorry.)
A piece from Mashable last year did a great job of explaining this phenomenon in action.
"Not unlike product placement in the film and television industry, Vine ads are cropping up in cases where the product can be worked in as part of the sketch," the publication's Kurt Wagner wrote. "It's such a lucrative business, in fact, that advertising and talent agencies are taking a piece of the action, serving as middlemen while connecting Vine's biggest influencers to brands that want social reach."
Twitter clearly thinks this is where things are going—that's why it spent millions to acquire a startup called Niche, which puts advertisers together with social media superstars.
When it comes to product placements, we've come a long way from wheelbarrows.
"What I offer: having access to the other side of the world, which is access to entertainment and film and talent and athletes and television, digital, music."
— Ryan Kavanaugh, the CEO of Relativity Media, discussing how his place on the board of the e-cigarette company Vapor was a win-win situation for both the film industry and the e-cigarette industry. Slowly but surely, films like his—along with those produced by other studios, like the upcoming Cymbeline—are helping to give e-cigarettes some wanted notice.
Here's the thing about product placement: It cuts both ways, and if it means that a company has to avoid an unflattering placement, that's what they're gonna do. The Oscar-winning 2008 film Slumdog Millionaire had that problem: Corporations like Mercedes-Benz and Coca-Cola were not cool with their brands showing up in the poorest parts of Mumbai, which required director Danny Boyle to remove references to the products in various scenes, at a cost of tens of thousands of dollars.
"In terms of the Western audience, they don't really want to see their products being associated with what they regard as 'slums,' the way that they think of slums, you know?" Boyle told Ad Age in 2008. "It's not to do with the Indian perspective of slums, because people in India know that 'slums' is a geographical reference; it's not a pejorative term there at all."
But what brands are OK with is weird. In the new season of House of Cards, there's a shot where (spoiler alert) a character is shooting up bourbon with a syringe next to a bag of Golden Oreos.
In what world does that make someone say, "I want a freaking Oreo"?