Marketers explore product placement

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Large b-to-b marketers such as American Express and Ford Motor Co. are among the top spenders on advertising in the world, but these companies, along with others, are increasingly using alternative marketing methods such as product placement.

Ford is, of course, a big believer in traditional marketing tactics, spending $2.23 billion on U.S. advertising last year. But the company is also looking for different and perhaps more effective ways of reaching its audience.

"Compared to 10 years ago, we have a lot more tools available to reach potential customers-and it's up to us to use them wisely," said Marty Collins, general marketing manager, Ford Division. "Our cross-media plans include a supercharged emphasis on nontraditional outreach."

One nontraditional marketing tactic that Ford is using is product placement. While most of the emphasis is on consumer marketing on programs such as Fox's "The OC" and NBC's "American Dreams," there are also b-to-b elements in Ford's strategy, primarily on ABC's "Extreme Makeover: Home Edition."

Ford gives away a vehicle to the family whose home receives the makeover during this program. It places any one of a number of vehicles, including a Super Duty truck, in the family's new garage. Additionally, Ford Super Duty and F-150 trucks appear during the show hauling trailers and carting away refuse.

For this integration with "Extreme Makeover's" content, Ford has negotiated a deal with the program that includes advertising and product placement. "In a lot of cases, some of it is about a paid arrangement where we pay to have our product featured," said Ford spokesman David Reuter. "In other cases, it's just part of a larger package."

Like many companies experimenting with product placement on television and in film, Ford is a hybrid marketer with both consumer and b-to-b audiences. Similar corporations that have dabbled in product placement are American Express and Computer Associates International.

But while these and other companies explore the power of product placement, some marketing experts question the practice. Al Ries, chairman of branding consultancy Ries & Ries, said, "I don't think any company would be thinking about product placement unless they had serious concerns about the effectiveness of traditional advertising."

Additionally, some observers worry about the growing influence marketers might have on the content of programming. Ford's Reuter indicated the company had broad input into how its products are featured on "American Dreams." "We're actually working with the producers to write our products into the script," he said.

Influence on content feared

Some fear that product placement's influence on the content of movies and television will seep into news magazines, where editorial content is seen by many as inviolate. Certainly, powerful marketers desire product placement in magazines. For example, Advertising Age, a BtoB sibling publication, recently reported that Rick Sirvaitis, president-COO of General Motors Corp.'s media-buying arm, GM Mediaworks, described product placement in magazines as "very relevant."

Weeks before those comments, an anticommercialism group called Commercial Alert organized 61 journalism professors to sign a letter to the American Society of Magazine Editors warning against the dangers of "aggressive advertiser intrusion into story content."

Most likely, b-to-b marketers will have the most desire for product placement in print, specifically in trade publications, where most of their marketing communication is focused. So print is where any battle over product placement likely will play out.

Indeed, many traditional b-to-b marketers express little interest in product placement on television or in films.

For instance, Deere & Co., the agriculture and construction equipment manufacturer, said it has no formal program for pursuing product placement opportunities. The company will provide tractors and equipment if the placement makes sense, but it doesn't pay for placement, according to spokesman Barry Nelson, who said, "Some people wanted us to do that and wanted us to pay, which is normally something we don't do."

Deere competitor Caterpillar takes a similar approach. "As far as seeking opportunities, we don't do that," said a Caterpillar spokesman.

Computer Associates has experimented with product placement, according to the company's global media director, Michael Paradiso, who said the company had paid a few years ago to have its logo appear in network and cable TV programs but wasn't currently pursuing similar opportunities. "We've explored it," he said, "but we haven't done anything recently."

"It's not very expensive from an out-of-pocket amount," Paradiso added, "and then from the perspective of the exposure you would get, it's fairly cost-effective. But you have to break down the level of exposure between a 30-second spot versus a one- or two-second on-screen display."

Paradiso said he was curious about product placement in magazines, which might take many forms, including supplying hardware or software to product testing labs. "Is that product placement?" he asked. "It may be."

American Express had no doubts that its relationships with two reality shows included product placement. The company's OPEN Network for small businesses generated positive results from both affiliations, which included product placement as well as advertising and online elements.

In 2003, American Express sponsored the reality show "The Restaurant." The program featured chef Rocco DiSpirito starting a new restaurant in Manhattan. In the wake of the show, "we saw a 70% increase in prospect awareness of the OPEN brand," said Catherine Foucher, VP-brand marketing for OPEN.

American Express this year sponsored a second reality show, "Blow Out," which chronicled Jonathan Antin's efforts to open a hair salon in Beverly Hills. The company said it saw small-business card use grow by double digits this year compared with last. It attributes at least part of the performance to the product placement on the two shows.

FedEx hasn't pursued a program of product placement. Its prominent role in 20th Century Fox's "Cast Away," a 2000 film starring Tom Hanks as a FedEx executive stranded on a deserted island, was an opportunity that just fell in the company's lap.

FedEx didn't pay for its appearance. "We just provided them with what they needed," said FedEx spokesman Howard Clabo. "We obviously worked closely with them, and they filmed part of the movie at our hub here in Memphis."

Clabo said FedEx believed the appearance in the film was positive. "Certainly, it had a tremendous impact, primarily internationally, on the awareness of the FedEx brand," he said.

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