Product Placement and the Apprentice TV Show

By Eric Goldman

I’ve always been confused by the fuss over product placements. I know people generally don’t like advertisements, and I also know that people want to be told when something is an “advertisement.” But product placement occurs in the context of editorial content, and if the editorial content is good, personally I don’t care how the showcased products got there.

More importantly, we have tolerated many types of quasi-marketing editorial content for decades. When a band does a live performance on Saturday Night Live (or the Ed Sullivan show), is this band’s performance an advertisement or editorial content? Because it’s “between the ads,” we call it editorial content–but make no mistake, the band’s performance absolutely is about increasing record sales, and usually it has precisely that effect. If we consider the full range of quasi-marketing, such as author interviews as part of a book tour (President Clinton’s appearance on Oprah is a particularly conspicuous example), book excerpts in newspapers/magazines and radio performances of songs, we realize that marketing in the guise of editorial content is ubiquitous and fully tolerated. To me, product placements are just another example.

As reported by the NYT recently, the process of product placements has become a lot more formalized and organized than it has historically. This article made several interesting points about product placement.

First, it notes how product placement is a logical response to the TiVo age–perhaps the only feasible solution. So long as consumers can excise out commercials easily, consumers will do so. Product placements intermix the editorial content and marketing content in a non-excisable fashion, mitigating the power of the TiVo fast-forward button.

Second, not all product placements are paid. The NYT article gives several examples of product placements where the editorial team initiated the placement and got permission from the marketer, but didn’t get paid. Two examples: the famous Seinfeld with the wayward Junior Mints, and a recent placement of a Chrysler 300C in ER.

Third, product placements are reshaping Hollywood financing for good reasons. Integrating product placements into the production allows the producers to “pre-sell” advertising, in some cases enough to cover production costs. Mark Burnett has been doing that with Survivor. Accordingly, TV shows with pre-sold product placement revenues are much lower financial risks for broadcasters. This financing source has the potential to restructure some of the Hollywood financing game.

Meanwhile, product placements can have enormous effects on sales. I’m still in shock from the amazing results from the Apprentice. Consider Pontiac’s results when its new Pontiac Solstice was the center of a task on Apprentice. Pontiac hoped to sell 1,000 Solstices in 10 days. Instead, they sold 1,000 cars in 41 minutes–before the show even aired on the West Coast! Pontiac ultimately sold out its entire 1st year production (5,000 cars) before the car was launched.

The Apprentice also helped Staples sell, in 2 hours, a half-million dollars worth of an office organizer created by the candidates. And Hanes sold out a line of T-shirts in 2 days after they were featured on the show.

I wonder how you feel about these sales results from product placements. Personally, I don’t mind product placements so long as the editorial content is good. In the case of the Apprentice, I like the show, and I like how the teams work on real-life business situations rather than totally artificial scenarios. If, as a collateral effect, the product placements increase my propensity to transact with the showcased marketer, I’m OK with that.

The law does apply to product placements, but in ways that are insignificant in practice. Payola is illegal, but only if not disclosed. So product placements should be disclosed, and frequently producers make these disclosures in the credits where they are easily missed (I fast-forward through the credits just like I fast-forward through the ads). I assume that over time the anti-marketing crowd will demand increasingly more intrusive/noisier disclosures about product placements that viewers can’t miss, but I’m skeptical that more prominent disclosures will help the viewers in any meaningful way.