Product Placement vs Tv Advertisement

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An Explorative Study of Testing the Effectiveness of Product Placement Compared to 30-Second Commercials

Kristin Blondé and Irene Roozen

Kristin Blondé: Irene Roozen:

Kristin.Blonde@vlekho.wenk.be Irene.Roozen@vlekho.wenk.be

tel:+32-2-221.12.59 tel:+32-2-221.12.96

Vlekho-Business School 336 Rue Royal 1030 Brussels Belgium

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An Explorative Study of Testing the Effectiveness of Product Placement Compared to 30-Second Commercials Abstract
The main objective of this paper is to compare the effectiveness of subtle and prominent product placements with the effectiveness of 30-second commercials for the same brands. Two experimental groups were exposed to TV- drama series and 30-second TV commercials in the break of the TV-series. The brands of the prominent- and subtle product placements which were used in the TV soap series in the first experimental group were used as 30-second commercials in the second experimental group and vice versa. The variables to measure the effectiveness of communication were analysed in terms of brand recall and brand recognition. The most important research result is that product placements are found to be more effective than 30-second commercials.

Introduction
The “re-invention” of product placement has gained new urgency because consumers increasingly have the technical power to avoid commercial messages on TV. Consumers are exponentially overwhelmed by commercials, consequently irritated by them (Fennis and Bakker, 2001; Aacker and Bruzzone1985) and trying to avoid them (Woltman Elpers et al., 2003). Consumers were already using frequently the remote control in order to switch away (zapping) from TV commercials. With the introduction of PVRs such TiVo, Replay TV and so on, consumers can not only fast-forward through recorded programs but can now also easily skip with a PVR’s auto-skip button. So the blame of avoiding commercials (zapping, zipping, skipping) seems now to fall on digital video recorders and digital television. As the convergence of TV and the internet continues at an inevitable pace, consumers will only gain more control over what they see and when they see it (Zutter, 2005; Woltman Elpers et al. 2003).

Decreasing Effectiveness of 30 second TV commercials A Forrester Research’s study of PVR usage by 588 users in the US found that 60% of their time, on average, was spent watching programmes that were pre-recorded or delayed, resulting in 92% of commercials being skipped. Thirty per cent of respondents said they watched no commercials at all (Zutter, 2005). Also in Europe the effectiveness of the 30

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second TV commercial is declining dramatically. 78,2% of Germans are irritated by advertising, only 24% actually still watches it (Demin, 2006) In a recent study in Europe (the Netherlands) the actual viewing behaviour of consumers was measured (instead of measuring behavioural intentions). Research results indicated that only 19% of the TV-viewers could be measured as potential viewers of commercials, because TV-viewers not only switch to another channel (which is normally measured by audiometry-measurements) but also stop watching in order to do other things like going to the kitchen, bathroom etc (Stumple and Levi, 2005).

Since viewers’ attention to TV advertising has declined the last years (Woltman Elpers et al., 2003; Rossiter and Bellman, 2005) major brand advertisers (top 130) responsible for $20 billion in ad spending per year are losing confidence in the effectiveness of TV advertising (Mandese, 2006). According to a survey released by the Association of National Advertisers (USA) TV Ad Forum on March 22, 2006, more than three out of four advertisers (78%) say they have less confidence today in the effectiveness of TV advertising than they did two years ago. Instead, they are looking at alternatives such as branded entertainment within TV programmes (61%), TV programme sponsorships (55%), interactive advertising during TV programmes (48%),...
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