When it comes to virtual product placement, media buyers are confused. Where does it sit and who owns the format?
At first glance, product placement sounds like the realm of sponsorship. In many cases, that is the team who handles it for a brand. It sits in the marketing function, in a special group, who focuses on corporate sponsorships. They look at these large sponsorships across the board, and product placement is just one example of these kinds of relationships. In the old-school approach of marketing and advertising, this was probably true. In a more modern, digital-first approach though, product placement is changing and evolving and the ownership is shifting. This model is purchased on flat fees associated with estimated audience size, with no guarantees. It represents fixed pricing for both sides, and all revenue goes to the studio.
AI enables product placement at scale. You can identify, negotiate and execute product placement in hours or days, rather than weeks or months. This speed brings the opportunity closer to television or digital media buying. Traditional, linear TV buyers can see this as a new format of advertising in linear content. Digital media buyers will see this as programmatic, enabling scale in digital video channels like YouTube, Reels or Tik Tok. This is where the grey area exists. Does a TV buyer own the channel? How about a programmatic buyer? Maybe social media teams? For TV buyers who speak in terms of GRPs and reach, product placement is a natural extension of their space. For digital media buyers, they speak in terms of CPM and impressions. Social media buyers speak in terms of followers and estimated reach, also without guarantees, much like traditional sponsorships.
It is inevitable that product placement will scale for one or all of these groups. The opportunity is too clear. It creates a new, non-skippable, highly efficient model for advertising. A recent study from a company called Mirriad states “75% of viewers like the in-video format” of product placement, and the format “drives an 18% increase in purchase intent” and a “35% increase” in buying after exposure. The model is working, and consumers appreciate the lack of interruption.
When digital media buyers evaluate product placement in YouTube or other video content, there are several key factors they should consider.
- Relevance and alignment: Ensure that the product being placed aligns with the content and target audience of the YouTube channel. The product should feel natural and relevant within the context of the video to avoid appearing forced or out of place.
- Audience demographics: Understand the demographics of the YouTube channel’s audience and whether it matches the target market for the product. Look at the channel’s subscriber count, engagement metrics, and viewership demographics to assess the potential reach and impact.
- Channel credibility and authenticity: Evaluate the credibility and authenticity of the YouTube channel and its content creator. Consider factors like the creator’s reputation, audience trust, engagement levels, and overall quality of the videos. Ensure the channel’s values and image align with the brand’s identity.
- Integration and visibility: Assess how the product placement is integrated into the video. Ideally, it should feel seamless and organic, rather than disruptive or overly promotional. The visibility of the product should be appropriate—neither too subtle nor too overt—to ensure it garners attention without alienating viewers.
- Engagement and influence: Look at the engagement metrics for the YouTube channel, such as likes, comments, shares, and views. Assess the influencer’s ability to drive audience engagement and impact purchasing decisions. High engagement rates indicate a more invested and responsive audience.
- Disclosure and transparency: Ensure that the product placement complies with relevant advertising regulations and guidelines. It should be clearly disclosed as a sponsored or paid promotion to maintain transparency with the audience. Compliance with advertising regulations protects both the brand and the content creator.
- Performance measurement: Establish metrics to evaluate the success of the product placement. Track metrics such as views, click-through rates, conversions, and overall brand exposure to assess the campaign’s effectiveness. Continuously monitor and analyze the performance to optimize future strategies.
- Long-term partnerships: Consider establishing long-term partnerships with YouTube channels and content creators whose audience and content align well with the brand. Building ongoing relationships can help create a stronger association between the product and the channel’s audience, leading to increased brand affinity and customer loyalty.
So wherever it lands, product placement is a valuable new model for advertisers, and media buyers across TV, digital and social, as well as in traditional sponsorship areas, are going to consider ways to get into the space. Remember that each product placement opportunity is unique, so it’s crucial to evaluate and adapt your approach based on the specific circumstances. Effective collaboration between the digital media buyer, brand, and content creator is key to achieving successful product placements in YouTube content.