The hidden history of product placement

Journal of Broadcasting & Electronic Media, Dec, 2006 by Jay Newell, Charles T. Salmon, Susan Chang

It took a movie about a child-sized alien lost on Earth to place the advertising practice of product placement into the public consciousness. In E.T. the Extra-Terrestrial (Kennedy & Spielberg, 1982) the alien followed a trail of Hershey's Reese's Pieces to his new home. The movie was a hit, sales of Reese's Pieces increased dramatically, and to some the product placement industry was born (Snyder, 1992; Van Biema, 1982). Product placement in motion pictures is now valued at $1.2 billion annually, with television revenues exceeding $1.8 billion (Kivijarv, 2005).

However, this research will contend that product placement was a sophisticated sub-business long before E.T. that was fully integrated into the making and marketing of mass media content as early as the 1920s and that product placement in mass media began with the birth of motion picture projection in the mid-1890s. This research traces the development of product placement from its earliest years to the breakthrough success of E.T. in the early 1980s and shows how product advertising had been intertwined with the business dealings of the motion picture and television communities from their earliest days.

This research also explicates the development of mass media business rationales for product placement. It shows that in motion pictures, product placement was initially the result of intermarrying family ties with business but quickly transformed into a method of reducing the cost of motion picture production while providing no-cost exposure for products. As the distribution of programming changed from local to national, the movie industry soon learned to tie on-screen placements of products with offscreen promotion, thus increasing the potential audience while reducing the out-of-pocket advertising costs.

However, for television, the product placement was seen as a threat to advertising revenue, and an underground trade developed in which program staffs worked with manufacturers' publicity agents to promote products on air. The rewards of product placement available to motion picture producers were less relevant to the television industry, and the strains of grafting motion picture style placements into television are still evident today.

Defining and Researching the Development of Product Placement

The scholarly literature that mentions the development of product placement rarely identifies instances of product placement as occurring prior to the 1980s, and those that do are inconsistent in their evaluation of the beginnings of product placement. Balasubramanian (1994) suggested that product placement was not an organized business until the mid-1980s, whereas Miller (1990a, 1990b) argued that product placement was an unstructured part of Hollywood operations until movies such as E.T. successfully intermixed artistic and commercial endeavors. Wasko (1994) acknowledged instances of product placement as beginning in motion pictures of the mid-1940s, but Eckert (1978) noted activity that would today be called product placement as taking place first in the 1930s.

The term product placement did not come into scholarly or trade use until the 1980s (e.g., Harmetz, 1983), so locating product placement within the mass media industry must begin with a brief look at industry terms that began during the early growth of movie marketing: exploitation, tie-ups, and tie-ins. In the first years of filmmaking, when motion pictures were promoted locally as packages of multiple films and not nationally as individual titles, exploitation referred to any sort of publicity that might generate attendance (DeBauche, 1985; Staiger, 1990). Beginning around 1915, as promotion for motion picture attendance began to focus on individual titles, the term exploitation became differentiated from both paid advertising and press relations to indicate promotional events, such as contests and giveaways (Gaines, 1990). Within exploitation, the on-screen use of products was variously termed "publicity by motion picture" (Dench, 1916), "moving picture advertising" ("Ethics of Motion Picture Advertisers," 1930), "co-operative advertising" (Harrower, 1932), "plugs" ("Firms Get Free Ads," 1939), "tie-in advertising" ("Tie-In Advertising," 1951) and "trade outs" (Lees & Berkowitz, 1978), or simply "exploitation" (Steele, 1925). However, the terms that endured from the 1920s onward through the 1970s were tie-ups (Barry & Sargeant, 1927) and more recently tie-ins ("Tie-In Advertising," 1951), both terms interchangeable and representing a cooperative venture between a media maker and manufacturer, in which on-screen exposure of a product, offscreen endorsement by an actor, or a combination of on-screen appearances and offscreen endorsements were traded for paid advertising and unpaid promotions by the manufacturer (Eckert, 1978).

The tie-up offered benefits for multiple players in the filmmaking and distribution industry. For the motion picture producer, the tie-up delivered free props. For the manufacturer, the tie-up provided in-theater exposure for products to a captive audience and the chance for the product to be associated with well-known actors on- and offscreen. In addition, the tie-up created the marketing option to use footage or publicity stills from the movie in the company's outside advertising. Besides being a direct pitch for the product and the manufacturer, this "as seen in the motion picture ..." advertising was a boon to the motion picture distributor, providing zero-cost advertising for the picture.