Has the time come for product placement in China?

Tech specialist Larry Rinaldi

By Published on .

Last summer, I found what I thought was an excellent film script: cars, romance, unrequited love, failure and redemption, generational conflict--great stuff for China! It was also well-cast with beautiful stars and the score had good music. It would rate well with viewers and had wonderful material for creative and thoughtful product placements. I was elated and over the next month, I worked with the producer and approached several major advertisers. They all professed great interest.

Three months later, I had nothing to show for my efforts. I had gotten nowhere. What happened?

Advertisers struggled with everything, budgets, strategy, the lines of responsibility and product availability became seemingly insurmountable problems. I was shuttled between PR people, various stable agencies and product managers. No joy. It became all-too-clear they had no idea, no concept of the role product placement could play in their plans. Processes and systems, all-important in China, to handle the situation simply didn't exist.

Somewhere in this adventure, I found out the mother-in-law of one of the actors had proudly sold several placements! Albeit low-value, low-cost and for cash. The producers didn't even know! (She was rather enterprising though, and for a moment I thought I should hire her.) In the end, everything collapsed under the weight of internal befuddlement. Time simply ran out. Still, to their credit, interest was high.

The experience illustrates the situation--and the opportunities--that exist in China today, where product placement is one of the least-mentioned forms of alternative media taking place (putting aside the "Super Girl" phenomenon last year). Will this 100 year-old marketing tactic pioneered by the likes of Procter & Gamble, Unilever, General Motors and Kraft in the U.S. market eventually take off in China? The answer is likely to be yes.

The government has declared that all media--broadcasters and producers included--be "market-driven" and "world-class," code words signaling that national, provincial and city governments are no longer willing to write blank checks for bloated and inefficient enterprises. In a market where residuals and bank financing are nonexistent, this has created a minor crisis. Consequently, a lively "market" for financing content has suddenly emerged. In this disruption, lies opportunity. Classic product placement can be a major source of financing for productions--or should be--and quite possibly, it is the only reliable source. The better production companies are starting to catch on.

So why has product placement been so inconsistently and poorly practiced in China? Both marketers and production companies are at fault. Over the last decade, advertisers focused on building distribution. In the mad rush to create awareness, we forgot about, or didn't need, the finer, more nettlesome marketing tactics like product placement. We bought tonnage to quickly match the territory we were frantically trying to carve out.

Meanwhile, broadcasters/production companies worked the only business model they knew, securing funding from the state or spending state money, whichever description you like, and pocketing the money squeezed out of the production budget. Creative financing was unnecessary, if not impossible, so product placement became an afterthought. It was a furtive business, handled by PR departments and assorted production personnel, and even mothers-in-law of stars as I sadly discovered, for a quick buck. Most of it was, and continues to be, simple celebrity placements gratuitously created and poorly executed, a shadowy world of promises, broken promises and easy cash, albeit in relatively small amounts. It's not a good situation for advertisers trying to build awareness quickly.

A recent review of major TV production companies illustrates the point. None of them have a dedicated placement person or even a clear placement policy and most demonstrate only the most rudimentary understanding of the role product placement can play in financing productions and improving the quality of a production. Few major multinational marketers in China have a dedicated product placement manager or function, written policy, or comprehensive plan either. Most refer you to a PR person, or media manager.

The practice is not without risks, however. Marketing and brand issues are largely foreign to film and TV directors in China. Timing and production practices are geared for low-cost and speed. Production companies only make money on the actual production, so keeping on schedule and under-budget is critical. Directors have little incentive to re-shoot, adjust scenes or accommodate demanding clients or agency creativesÖbut all that, like everything else in China, is changing.

The age of "consumer-generated media" and consumer choice is rapidly coming to the market and advertisers will have to develop content and push it across multiple platforms. Learning how to do this will become a necessary skill, but with foresight, planning and experimentation, classic product placement is a relatively inexpensive place to start.

Larry Rinaldi is managing director of O.N.A. in Beijing, which specializes in branded content and trans-media marketing. Previously, he oversaw marketing for Motorola's mobile phone division in Asia/Pacific and before that, he was vice chairman, Greater China of Ogilvy & Mather. He has lived in Asia for eleven years, including five in Beijing.
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