Product placement has been around for many years, but has come under fire relatively recently for being a potentially deceptive form of advertising.  Many groups, including Consumer Alert, have filed complaints with the Federal Trade Commission to deter this practice by providing disclaimers of such deals in television shows and movies.  This brings us to the question of the level of deception involved in product placement, particularly within movies and television shows.  Yes, technically the product is being advertised by simply being shown prominently on the screen, but should media companies be forced to disclose placement deals to consumers?  Based on the Federal Trade Commission’s definition of deception, the answer is no, they should not.  Not only would this frustrate and potentially harm the movie industry, it also would likely irritate movie-goers and television-watchers alike, making it a no-win situation for anyone (except maybe Consumer Alert).

According to de Gregorio & Sung (2010), the first use of product placement happened in 1890 when Unilever purposely placed their product into a movie.  Since that very first product placement, the practice has become very close to a billion dollar industry (p. 83).  As the Rolling Stone notes, “Product placement in Hollywood dates back to the silent film era. But it wasn’t until E.T. craved those colorful little candies that brand marketing really took off. Now, 31 years later, it’s so pervasive we hardly even notice it – a Pepsi can here, an iPhone there. We use both in real life, so why shouldn’t they appear on the big screen?” (Kroll, 2013)  There have been several studies performed to determine the effect of such deals on consumers, and consumer perception towards the use of products in movies for advertising purposes has generally been positive.  One such study discovered that the positive perception is also tied to the relation of products to the plot of the show or movie (Russell & Stern, 2006).  Business companies, along with television and movie studios, can leverage product placement by finding the right fit to insert a product that corresponds with the plot.  This not only enhances the movie itself – people do use products in everyday life after all – but it also benefits the product’s company by bringing awareness to more consumers without the threat of their advertisement being avoided thanks to new technologies such as the DVR phenomenon. 

While some product placement deals blatantly exist (Devil Wears Prada, anyone?), others are more subtle.  Take, for example, the use of Tiffany & Co. jewelry in the recent Baz Lurhmann film, The Great Gatsby.  The jewelry company designed exclusive pieces to be featured in the film – which they prominently were – but the average movie-goer would not be aware that they are, in fact, that specific brand without further research.  Similarly, Giorgio Armani used its home collection to style scenes in the movie Paranoia, but again, the typical consumer might not know exactly who the furnishings were provided by without purposefully looking it up on the Internet.              According to an article in Luxury Daily, “Brands are likely to benefit more from product placement that can illustrate a believable lifestyle and reach more consumers than a branded social video” (King, 2013).  Google benefited from a brand integration arrangement with the movie The Internship.  According to Kroll (2013), “Summer 2013 welcomed the latest entry into the Most Egregious Hall of Fame, as Google basically got its own movie. In it, Vince Vaughn and Owen Wilson play 40-something interns at the Internet behemoth. While Google didn’t fund the film, the company did allow it to be shot on its campus and helped build an exact replica of its headquarters. Real employees were used as extras, and executives worked closely with director Shawn Levy to ensure all details were accurate. In the end, everything from Google search to Google goods (like futuristic glasses) are prominently featured. Key words: free advertising”. 

By simply placing a product within a scene of a movie or television show, it can be argued that the act of product placement does not fall under the Federal Trade Commission’s definition of deceptive practices.  The definition is as follows:

“Certain elements undergird all deception cases. First, there must be a representation, omission or practice that is likely to mislead the consumer.  Practices that have been found misleading or deceptive in specific cases include false oral or written representations, misleading price claims, sales of hazardous or systematically defective products or services without adequate disclosures, failure to disclose information regarding pyramid sales, use of bait and switch techniques, failure to perform promised services, and failure to meet warranty obligations” (Federal Trade Commission). 

There are generally no claims made about a product when it is featured in a movie.  The movies are fictional, but they also are representing a real-life situation.  The characters have to have something to eat or drink, wear, or drive, so of course real brands are going to be used.  Why not benefit both the movie production and the brand that is being integrated with a product placement deal?  Consumers aren’t stupid; they’re likely going to know that when a movie is based at Google and uses Google products and logos, there is some kind of deal happening behind the scenes.  If the product placed in the movie is there for viewing purposes, with no claims about its performance, companies should not be required to disclose the product placement deals because no governmental policies are being broken by either party.

Because the majority of product placement deals do not violate the Federal Trade Commission’s Deception Policy Statement, media companies should not be required to disclose deals to consumers.  Without an actual claim being made about the product, there really is nothing wrong with movies and television shows exposing consumers to different brands.  Consumers can then make their own decisions regarding what to do with the information received.  

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