This project is a complete review of the product placement industry. There are tremendous opportunities in this industry today, but, as one corporate marketer put it, "all the studios are playing the same game with different rules." Therefore, the goal of this project is to create a blueprint for conducting the business of product placement, whereby the interests of both the filmmakers and the corporate marketers are maximized.

This paper fully describes the current industry situation, analyzes its present practices and makes recommendations for improvement. This project is not an attempt to determine how to most effectively place products within films, nor to study its communication effects, although these issues are dealt with where applicable.

The predominant research method used for this study was a series of in-depth interviews conducted with industry professionals at major film studios, independent production companies, top product placement agencies, as well as with corporate marketers whose goods and services are actually being placed in the movies.

The final recommendations pertain mainly to the studios and the filmmakers, as they control the vehicle through which product placement is realized - the films.

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INTRODUCTION

THE FILM INDUSTRY

The year 1995 marks the one hundredth anniversary of the birth of cinema. On December 28, 1895, in Paris, France, Louis Lumier became the first to publicly screen a projected film to a paying audience. However, it would be on the other side of the Atlantic that the film industry would gain its popularity and develop into a viable medium.

Public film exhibition languished until the 1920s, when Adolph Zukor (Paramount), Harry Cohn (Columbia), Carl Laemmle (Universal), Louis B. Mayer (MGM), William Fox (20th Century Fox) and Harry and Jack Warner (Warner Bros.) forged an industry and revolutionized the art, entertainment and culture of a nation and the world. 1

PRODUCT PLACEMENT

From its earliest days, there has existed in the film business a delicate balance between the interests of art and commerce. Nowhere in the motion picture industry is this precarious marriage more readily apparent than in the practice of product placement. Product placement occurs when a name-brand consumer product is used as a prop in a film, for instance when Tom Cruise wore Ray Ban sunglasses in "Top Gun" or Burt Reynolds drove a Trans Am in "Smokey and the Bandit."

Although product placements can and do occur by chance, more frequently they are the result of agreements between corporate America and Hollywood which are intended to benefit both parties. The corporate marketers desire the unique, high-profile exposure of their products and the resulting implied endorsements. The studios, on the other hand, benefit through associated cost-reductions, corporate-sponsored movie promotions and occasional fees.

Product placement has occurred in the film business since the 1930s, but it was not until the 1980s that its practice evolved into a full-fledged industry. By the end of the decade all of the major studios had opened departments specifically dedicated to product placement and it began to gain wide-spread recognition as a viable promotional medium. It has since attracted the ever-increasing attention of corporate marketers, the academic world and the press. 2

TYPES OF PRODUCT PLACEMENT

There are three basic types of product placement: visual, spoken and usage. A visual placement occurs when a product, service or logo can simply be observed. A spoken placement occurs when an actor or off-screen voice mentions a product, service, or corporation. A usage placement occurs when an actor or actress actually handles or interacts with a product, service or corporation. A placement which involves usage often includes both a visual and spoken element as well. This last scenario is obviously the one most desired by companies.

PRODUCT PLACEMENT VS. BRAND PLACEMENT

Many in the academic world refer to the practice of placing corporate goods and services in movies as "brand placement." This is because their focus is on the communication effects of using name brands within films. On the other hand, the corporate world, the studios and the popular press refer to this practice as product placement. Since this study concentrates on the industry itself and its internal practices, the term "product placement" will be used throughout.

SYNERGY

Though entertainment industry executives have been known to gag when this ubiquitous and overwrought buzzword is used, "synergy" is an important concept in understanding the potential of feature film product placement and is central to the thesis of this paper. While the trade, business, and popular press continue to perpetuate the term, few journalists seem to understand its precise meaning. This is unfortunate, because what was once a very specific business term has been squandered through frequent an d careless misuse-its true meaning lost.

"Synergy" has been relegated to the semantic wasteland along with other sexy-sounding terms such as "empowerment" or, more recently, "information superhighway." It has become the business equivalent of "cool." "Synergy" is the idea of taking two disparate businesses, industries or functions and creating a new set of products, services or systems, which previously did not exist. It should not be confused with things like vertical integration, mergers and acquisitions, strategic alliances or even plain o ld effective management skills, though it certainly can have a relation to all of them.

In the entertainment business, music videos are an excellent example of synergy-the merger of radio and television. Another example would be the currently ensuing synergies resulting from the convergence of computers and traditional forms of entertainment, i.e. multimedia, interactivity, 500-channel cable systems, virtual reality, etc. Feature film product placement, as well, is inherently synergistic-feature films wedded with corporate marketing. To better understand the inherent opportunities for synergy in feature film product placement, we must first gain an insight into the groups which constitute the product placement industry.

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Chapter 1: The Players

STUDIO EXECUTIVES

There is at least one executive dedicated to product placement at each of the major studios. Some of the studios refer to this responsibility as "production resources," while others refer to it directly as "product placement." Any corporation wishing to have its products placed in films will generally go through the Production Resources or Product Placement Department. 3

This department serves as an intermediary between the filmmakers and the corporate marketers or their agents. The studio executives who are dedicated to product placement frequently interact with film producers, prop masters and other production people, as well as with executives from many other studio departments, particularly those involving clearances and promotions.

Even with all this interaction, their role is not always clearly understood by other studio executives nor by those on the production teams, let alone outside the studio. This can perhaps be attributed to its relatively recent existence, for as recently as five years ago, most of these departments did not exist. Jokes one studio executive, "No one in the studio really knows what production resources really does. They just know if you need something, here's who you call." 4 The basic duties of these executives can be best understood by examining the manner in which product placement actually occurs at the studios.

THE PROCESS

The studio executive's first step is to read and analyze scripts for upcoming films which are scheduled to go into production. They then do a breakdown of potential product placement opportunities. In addition, the production team (producer, director, prop master, set decorator, set designers, etc.) generally develops two lists of items needed for the film, which are then forwarded to the production resources department.

The first list is a "must have" list, which includes all items required to shoot the film owing to story considerations. These may be specific by brand (for instance a White Ferrari Testarossa) or by category (such as late model sports car). The second list-a "wish"-list includes additional items the production would like to have. The studio executive then meets with the production team to compare notes. Status reports are periodically sent to the other appropriate departments at the studios.

Next, the studio executive sets out to find the products and make the deals. The first call is frequently to the numerous product placement agencies which represent many of the corporations which have established an interest in this specialized method of promotion. The next round of calls is often to the corporate marketers who have established offices specifically dedicated to serving their product placement or entertainment marketing needs.

The search does not stop here, however, and this is where the studio executive's contacts really count. The motion picture business always has been known as a relationships business, and this characteristic plays a significant role even in product placement. During one of the interviews conducted for this project, one studio executive glowingly displayed a truly Herculean Rolodex, which contained over 1000 contacts. The product placement executives at the various studios all know each other by first name and have even been known to call each other to request a contact for an area in which they have recently developed a requirement.

Once the deals are made, the products arrive either from the placement agency warehouses or directly from the corporations. One studio even has its own warehouse for storing products for corporations with which the studio has special ongoing relationship s. In most cases, however, the products are returned once production has completed.

The lead time on the entire process varies considerably, with some studios starting as much as three months or more in advance of production, while others measure the time in weeks. Studio executives in this latter group indicated they had been actively lobbying senior management for more lead time. The specific senior management to which they directly report has a direct impact on this, as well as many other significant issues.

REPORTING

The reporting function seems to set the tone for how product placement is conducted at each studio and where priorities are placed. The Product Placement or Production Resources executives report to either the Production Department, the Marketing Department (via promotions), or in some cases both. Although the Product Placement or Production Resources Departments serve the needs of both of these areas, as might be expected, they seem to favor the benefits associated with the area to which they report.

This means those who report to production spend more of their time, relatively speaking, on the production benefits of placements, namely cost reduction. Conversely, those departments which report to marketing concentrate greater relative effort towards developing promotions and other marketing benefits associated with product placement.

As indicated, dual reporting does occur and the departments which function this way claim this is the best way for it to be structured. "Dual reporting is a 'must-have,' particularly since we cross over so many boundaries," says Michael Schrager, Director of Production Resources for Sony Pictures, who oversees product placement for both Columbia and TriStar Pictures. 5

Randy Smith, Executive Director of National Promotions at TriStar Pictures summarizes the advantages of dual reporting from a promotions perspective:

"Dual reporting is important. With it we are much more likely to be alerted to potential back-end promotions opportunities. For instance, say a cola is already scripted in a scene and the director is indifferent as to the brand and I know that Coke is looking to do a promotion of some type in the same quarter the film is being released. With dual reporting the decision becomes not just who will pay the higher fee or deliver more free cases of cola to the set-Coke or Pepsi-but more importantly the fact that I may have the potential for a $5 million dollar promotion with Coke." 6

Thus, the reporting function plays a significant role is determining the synergy of the studios' product placement efforts. Another factor which not only impacts opportunities for synergy, but also effects the basic effectiveness of feature film product placement, in general, are the filmmakers themselves. [The benefits studios derive from product placement and the relative merits of each will be discussed at length in a later section specifically dedicated to the topic.]

FILMMAKERS (The Talent)

ABOVE THE LINE

The unique power structure in Hollywood gives virtually complete control to the so-called "above-the-line" talent-the producers, writers, directors and the stars of the films. This is because the "talent," particularly "stars," are the key factor in attr acting large movie audiences. The same holds true for certain high-profile writers and directors, such as John Grisham or Steven Spielberg. This situation, therefore, gives such individuals literal veto power over product placement decisions should the y so desire.

Some, like producer Joel Silver ("Demolition Man"), avidly embrace product placement and other corporate promotional tie-ins. 7 Others, however, do not. Tony Hoffman, Vice President of Production Resources at New Line Cinema elaborates:

"Some producers don't like product placement. They think it's a pain in the ass and also feel it over commercializes the film. If a director doesn't want it, it's simply not going to happen. We never try to force the issue. Making the film is the important thing. Product placement is merely supplemental." 8

This can be particularly problematic, because many of the decisions which directly impact product placement are made or can be influenced by these individuals at the last minute. Even more importantly, their actions can jeopardize a corporate relationship which has been developed and nurtured over a period of years. As one studio executive put it:

"Directors feel like their movie is the only important thing in the world. I'm often caught in the middle. I have to explain to them that I'm not going to piss off Coke for them. I have a lot of other films I have to be concerned about." 9

On the positive side, "more and more filmmakers are starting to understand and appreciate the value of product placement," says Melissa Robinson, Director of Production Resources and Promotions at Paramount Pictures. 10 Also, corporate marketers place a high value on the name recognition associated with top name talent. "We will take more of a chance to be in the movies of directors who have big hits, like a Richard Donner [Lethal Weapon]. We will also put up with more too," says Frank Devaney, Senior Vice President of Product Placement at Rogers & Cowan, a public relations and entertainment marketing firm. 11

The power and influence of the "above-the-line" talent must also be considered when contemplating or recommending changes in the business methods or infrastructure of the product placement industry. What might appear on the surface to be a logical suggestion, which could improve the situation for both corporate marketers and the studios alike, may in fact be impossible to implement because of the nearly complete control the "above-the-line" talent has over the production of a film.

These individuals may be unwilling to even contemplate such changes for fear it may compromise their film in some way. For instance, it is easy to suggest that a corporate marketing representative be present on the set during scenes in which its products are depicted, as is typically the case during the production of their TV commercials.

Such a suggestion would never fly in Hollywood, however, where iron-fisted directors guardedly control their sets like some third-world zealot after a palace coup. It must be recognized, and is by virtually everyone in the business, that product placemen t is very much peripheral to the actual production and marketing of a film.

All of the benefits of product placement to the studios fade in significance when actors are paid $15 million to star in films which sometimes cost over $75 million to produce, another $30 million to market and distribute, and which can potentially gross over $250 million worldwide. Both the filmmakers and studios recognize that their primary business is producing and distributing films, not becoming a surrogate advertising industry. But it is not just the stars, writers, and directors who have an impact on the actual implementation of feature film product placements.

BELOW THE LINE

The role of the Prop Master within the business of product placement has changed considerably over the years. Originally, the Prop Master was the individual at the studios who secured products from the corporate marketers and their agencies. To the chagrin of many, these deals were often made under the table.

This practice, along with some agencies exaggerating and then over-publicizing the revenues they were generating through product placement, propelled the studios to develop their own production resources or product placement departments. Prop Masters no longer negotiate with corporate marketers and are prohibited from making deals on their own. Today, by and large nothing can go into a studio film, as far as labeled consumer goods, that has not been approved. "Now there's always the threat of my walking on the set," says Bettina O'Mara, Director of Production Resources at Castle Rock. 12

On the other hand, the Prop Master is still critical to effective product placement. The studio executives now work with the Prop Master to ensure that a product for which placement has been negotiated actually appears in the film and with the proper pla cement.

The Production Designer, Set Decorator, Costume Designer, Wardrobe Supervisor and Transportation Coordinator each play a similar role. They, too, can affect the ultimate results of a planned placement which falls within each of their sometimes overlapping domains.

Such relations are not always as straightforward as they may sound. One studio executive, when asked what she thought of a logo being moved on a computer monitor to ensure better visibility in a scene from another studio's recent film, replied:

"I wish I could get people on the production team to be that cooperative. Sometimes a production team will love product placement and they'll put products and logos and signs all over the place and other times they just don't want logos or identification anywhere." 13

While it can readily be seen that the individuals who actually make the films have significant and in some cases final control over the actual implementation of the placements, particularly in the case of the above-the-line talent such as the director, there is another group of players which are equally important to the outcome, namely the corporate marketers whose products and services are actually being depicted in the films.

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CORPORATE AMERICA

It is readily apparent from watching virtually any Hollywood movie that corporate America's products and services are receiving a tremendous amount of exposure within the feature films which are viewed by millions of people every day all around the world. While much of this exposure is unplanned by the corporate marketers themselves, many corporations today are actively involved in product placement.

Major consumer companies such as Anheuser-Busch, Ford, Kodak, AT&T, and Coke have made a major commitment to product placement and other forms of entertainment marketing. AT&T for instance had 500 clear placements in 1993, while Ford had nearly 350 placements worldwide. 14

Most of the corporations which choose to pursue product placement opportunities retain a placement agency to deal with the studios. Some corporations, particularly large consumer goods companies, have entertainment marketing offices, usually based in LA, which deal directly with the studios.

Those that choose to handle it themselves go through the same process of reading scripts, identifying placement opportunities and negotiating the deals. A few companies, like AT&T, have both an agency and a product placement or entertainment marketing office. The process is summarized by Dean Ayers, Director of Entertainment Marketing for Anheuser-Busch:

"We have a pool of readers who review the scripts and prepare a synopsis of each movie which identifies specific opportunities for beer placement. We then make a decision as to whether or not they meet our placement guidelines. There are occasionally gray areas where in certain films you have 'conditional approvals' of some scenes, but not others." 15

Still, many corporations, large and small alike, are not involved in product placement and are skeptical or unsure of its value. Even when approached about potential opportunities, the studios and placement agencies alike can find it an arduous, uphill battle to get the corporate marketers involved. One of the problems with companies which have not been active in this area before, particularly smaller companies, is they have to be educated about what entertainment marketing and product placement are in the first place.

Also, with new or very small companies, they often have very limited funds to spend and are always thinking of more traditional advertising. "They think, 'If I only have $1000 dollars to spend, shouldn't I take that money and put it into radio, TV or print'," says Randy Smith, Executive Director of National Promotions at TriStar Pictures. 16

Once the companies understand placements or even if they are already actively pursuing them, they still have to be sold on the individual film. Basically, they have to believe the particular film is an appropriate vehicle for their product. Typically, a side from the script and intended rating, they inquire about the film's "above-the-line" talent (producer, director, actors) and their respective track records.

Corporate marketers spend years and millions of dollars building brand equity for their products. They expect product placement to enhance and not detract from it. Since corporate marketers can rarely be totally certain of how any given placement will b e implemented, most are extremely conservative about the films which they choose to get involved.

In their effort to protect their brand's image, more often than not they choose to err on the side of caution. "Some companies feel that one really bad placement can do more damage than twenty-five really great ones," says Teri Ward, of Norm Marshall & Associates, an LA-based entertainment marketing firm. 17 Companies which have an especially unique image, like Apple Computer, are known to be particularly selective about the films with which they choose to participate. 18 [The topic of negative placements will be addressed at length in a special section.]

The potential demographics (key attributes which define a person such as age, sex and income) of a film's audience is a concern to some companies, particularly if the target market for their product is narrow. As would be expected, the corporate marketer s track the results of their efforts and some even track the competition. They do not, however, pay much attention to the other products which appear in their films nor the possible impact these may have on their placements.

What was once a seller's market for the studios has come to favor the buyers, i.e. the corporate marketers. This shift is attributed, in part, to the glut of feature films being produced. "Corporate America is in a very good situation now, because they can pretty much pick and choose what they want to participate in," says Tony Grana, Director of Production Resources at Universal Pictures. 19

There are a number of other factors, however, which weakened the studios' position. Gary Mezzatesta, President of UPP Entertainment Marketing, explains:

"The companies are getting a lot for their money, but as far as prices going up, there are a number of factors which inhibit the free market, specifically creative involvement. For one thing, studios cannot remove the creative element from product placement. Therefore, a lot of companies will receive placement in great situations without any consideration. It will always happen, no matter how sophisticated the business gets. So, sometimes companies figure, why pay? This decreases demand. Secondly, a lot of companies have been misled by the film industry. It happens every week. Therefore they don't trust the other side in the transaction. Sometimes it's simply a miscommunication rather than a true deception, but the perception is greater than the reality. If the company thought it was deceived, that's what matters." 20

The situation is also compounded by the cultural gulf which separates the film business and the rest of corporate America. The situation is perfectly exemplified by the recent flap over Coke's depiction in Natural Born Killers. [It is worth noting, however, that the studio's production resources executives were not involved in the placement. Perhaps if they were, this situation would never have occurred.]

Regardless of the specifics of the contract, it does not take a genius to understand that Coke would not like its products repeatedly associated with violent images of psychotic mass murders. Corporate America sees this and all of its worst fears are validated.

While the vast majority of filmmakers may be sensitive to the concerns of corporate marketers, all it takes is a few incidents like this to tarnish the reputation of the product placement industry. As one studio executive puts it, "when these things happen it hurts everyone, because the corporations see us all as one great big Hollywood scum bag." 21

While true cases of dishonesty are rare, the cultural gulf that separates Hollywood and corporate America occasionally translates into a failure to effectively communicate. Part of the problem is that the filmmakers and the corporate marketers are using different yardsticks by which to measure acceptability. The true distance from Cincinnati or Chicago to LA is much greater than it looks on a map. Or as one producer put it, "all laws and normal rules of acceptable behavior seem to vanish during the production of a film. I'm not sure why it happens, but it does." 22 Such a sentiment, however exaggerated, would certainly make your average Procter & Gamble brand manager shudder, particularly if they had just signed a contract to have one of their products placed in an upcoming film.

All of these factors have combined to create a situation where the corporate marketers can be very selective about the films in which they choose to participate. This, in turn, tips the scales in their favor. The burden is now on the studios to refine t heir practices in order to increase the value of what they have to offer. As Tony Grana puts it, "we have to become savvier in dealing with corporate America." 23

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PRODUCT PLACEMENT AGENCIES

"Product placement agencies are to corporate America what talent agencies are for actors and writers," says Tony Hoffman, Vice President of Production Resources at New Line Cinema. 24 Product placement agencies represent the interests of their corporate clients within the entertainment business. Most of the successful product placement agencies today were started less than fifteen years ago and many of them even more recently. The vast majority are located in the Los Angeles area.

Placement agencies often offer more than product placement, however, with many offering a full array of entertainment marketing services, ranging from coordinated promotions with entertainment themes to seeking out licensing opportunities with entertainment companies. Some are even expected to generate revenue for their clients. One of the top agencies is actually a public relations firm which specializes in the entertainment business. Another strength of the agencies is they warehouse their clients' products which consequently makes logistics easier for their clients and the studios.

Agency executives work similarly to the studio executives. They receive scripts, which they review for product placement and other entertainment marketing opportunities for their clients. They then contact the studios and their clients with these ideas. Next, they negotiate the deals on behalf of their clients. Lastly, they present their clients with "visibility reports" which details the results of their product placement efforts.

Most studio executives prefer to deal with the agencies, and not go around them. That is, unless the placement agency is not doing its job, then they go directly to the corporations. The studios feel agencies can play an important role if they can present a complete package. They help to filter through the clutter. Problems do arise, however, because they are middlemen. This seems to be more common with placements which have promotions attached.

Many of the studio executive felt they can convey the value of their films to the corporate marketers much better than the agencies can. The agencies were encouraged to attend the meetings, but the studios preferred to hear directly from corporations. T he same attitude holds for the corporations, as it was felt they could more effectively convey their philosophies and strategies than the agencies. Thus the agencies can be viewed as the conduit to bring the two parties closer together.

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ADVERTISING AGENCIES

The question inevitably comes up as to the role of advertising agencies in the product placement industry. The answer to that question is, basically: none. Most of the studio executives indicated the only time they dealt with ad agencies is when the placement involves a cross-promotion which includes a TV commercial. The reasons are numerous.

First, the current practice of product placement evolved from the public relations efforts of major corporations. To some, its value and purpose is still viewed in the corporate public relations vein. The costs associated with it usually do not come out of a corporation's advertising budget.

Second, product placement agencies have cornered the market and the corporate marketers seems to be satisfied with the services they are providing. Third, advertising agencies do not see much money in it. Relative to the current array of services advertising agencies offer, product placement is small time. Additionally, most ad agencies bill based on media time purchased and product placement does not neatly fit within the typical media buying framework.

If the ad agencies really did want to get into the business, then they would most likely just buy the top placement agencies. But doing so might also complicate their current affairs, because their client lists would greatly differ. This is in part because the placement business is much more consolidated than the advertising business.

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ERMA

ERMA (pronounced "Irma") is the acronym for the Entertainment Resources & Marketing Association, the trade group for the product placement industry. Founded in 1991, the association's membership is comprised of film studios, production companies, product placement agencies, and corporate marketers.

ERMA's purpose is similar to that of most other trade organizations, namely to further the interests of the industry while simultaneously improving its image. Dean Ayers, Director of Entertainment Marketing at Anheuser-Busch and the current president of ERMA cites the following reasons for the organization's founding, along with its current goals:

REASONS FOR FOUNDING ERMA

1. Give professional credibility to the industry and its members.

2. To provide accurate communications to the media and the public about product placement.

ERMA's CURRENT GOALS

1. Increase membership.

2. Raise the professional image of the association and the industry.

3. Provide accurate communications to the media and the public.

4. Provide a single source to answer questions and provide information about the industry.

Frank Devaney, Senior Vice President of Product Placement at Rogers & Cowan, who was also one of the founders of ERMA and its first president feels that "ERMA has already been successful at having product placement recognized as a distinct business." 25 Adds Ayers:

"We've encouraged people to come out of the closet about product placement. Whereas only five years ago people were hiding. They thought what they did was wrong and that the public was against it. They found out the public is actually for it. The production people are for it. The companies are for it. There is re ally only a very small segment of people who are opposed to product placement." 26

One of the ways in which ERMA hopes to improve the image of the business is by allowing only companies which meet their guidelines to the join the association.

On a side note, academic researchers would be best advised to consult ERMA's membership directory before citing placement agencies in their work. Citing unscrupulous placement agencies can and has undermined the credibility of their research, particularl y when they cite companies which have been described by one industry professional as "having been virtually run out of business. They'd lie to you in a New York minute. They wouldn't get in our association if they begged. That really jumps out of that paper." 27

Gary Mezzatesta, President of UPP Entertainment Marketing summarizes the efforts of ERMA:

"ERMA has helped to improve the image of the industry. Unfortunately, there are still unethical companies around. All you need is a phone to be in this business. You can be totally unethical and still be in business. I don't see it ever totally changing. ERMA helps by having the various practitioners with in the industry talking to one another about issues and by building trust in one another. That has been accomplished more so than changing the image of product placement in the advertising world." 28

Still, that is pretty good for less than five years of work.

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Chapter 2: Benefits of Product Placement

BENEFITS TO CORPORATE AMERICA

One of the greatest ironies of the perceived benefits of product placement is that the example most often cited as proof of the huge potential benefits of product placement-Reese's Pieces in "ET" 29 -had little to do with the placement itself. Frank Devaney, Senior Vice President of Product Placement at Rogers & Cowan, the firm responsible for the placement explains:

"Reese's Pieces was our first valid promotion. Its success has nothing to do with product placement. In fact, it was a lousy placement-a couple bags of Reese's Pieces in the dark. If you hadn't been told by Hershey in a major promotion that those were Reese's Pieces, then I don't think you'd ever know." 30

Regardless of this popular fallacy, product placement does offer many tangible benefits to the corporations whose products and services are depicted in feature films. By and large, however, these companies do not use product placement as they would other more traditional forms of advertising.

Since the corporate marketers themselves have little control of the message, the audience, nor the timing, product placement is primarily used to expand on what has already been done with their real ad dollars. Still, there are many distinct benefits and advantages to feature film product placement, some of which are unique to this method of promotion. One of the most salient is the association of the product with the film itself, particularly its stars.

IMPLIED ENDORSEMENTS

Product placement rarely uses a hard-sell approach, in part, because of the previously discussed power of the "above-the-line" talent and the corresponding concern about over-commercializing the films. Corporate marketers must therefore rely on more subtle methods of communicating a message to their consumers. An implied endorsement is perhaps the most powerful mechanism by which corporations can hope to deliver a message to the audience through a placement.

One significant advantage of product placements, is that these implied endorsements are often made by major actors or actresses which frequently do not appear in television commercials. For although we may never see Clint Eastwood and Coke's polar bear doing a Texas two-step while singing "Always Coca-Cola" on a TV commercial, we may be able to watch him drinking a Coke Classic in a movie after having just saved a bus load of children from maniacal terrorists.

In this sense, product placement delivers a powerful, yet subtle impression. Such scenes are inevitably going to appear with the resulting endorsements taking place. The corporate marketer figures, if Tom Cruise is going to wander up to a bar and ask for a beer anyway, why not make it a Bud? Hopefully they made a deal to be in the movie.

FAR REACH (LONG LIFE & GLOBAL)

Another advantage of product placement is its far reach. The vast reach of product placement can be attributed to the ever expanding global distribution channels for feature films. The normal distribution for a studio feature starts with an initial high -profile domestic theatrical release on over a thousand and sometimes nearly three thousand screens across the U.S. and Canada. The "domestic theatrical" run lasts a few weeks to several months and studio films typically reach tens of millions of people.

Next, an international theatrical run takes place, normally a few months later, followed by numerous ancillary markets including home video, pay per view, premium cable channels, and finally broadcast television. Each of these distribution channels are further opportunities for the film to be seen and for the product placement to be observed which, in turn, increases both its reach and frequency.

Also, unlike a TV commercial which appears only during a particular program and then vanishes unless another fee is paid, product placement is imbedded within the film and travels with it. The actual life of a placement, therefore, is extremely long and as long as people continue to view the film, the placement continues to receive exposure. Product placement, as a result, is basically forever.

There are exceptions to this, however, as a scene from the film "Demolition Man" was changed for its foreign release. The scene involved Taco Bell in the U.S. prints, but was digitally altered to Pizza Hut for international distribution because Taco Bell has very little presence overseas. Of course both chains are wholly owned subsidiaries of Pepsi. 31 Therefore, with one effort you can reach millions around the world, forever.

LOW COST

The actual cost of product placement is extremely low relative to other forms of promotions or advertising. "The 'cost per thousand' of product placement versus TV or print is pennies versus dollars. It is very economical," states Tony Grana, Director of Production Resources at Universal. 32

Since most product placement occurs through barter, or very small fees, then the above claim is not mere hyperbole. For the sake of comparison, if the average cost of a placement is valued at $5,000 and the average reach of a major studio distributed fil m is in excess of a hundred million people (including all ancillary distribution), then the average "cost per thousand" (CPM) of product placement would, in fact, be significantly less than a dollar per thousand.

If compared to the over $100,000 cost of placing a single spot ad in prime time and the corresponding CPMs of $13 (men 18+) and $19 (women 18+), then product placement can certainly be viewed as a tremendous value. 33 The value is even greater when taking into account there are no production costs incurred by the corporate marketers, as there would be if they were to air a TV commercial.

LOW CLUTTER

A frequent and ever-increasing problem in traditional advertising is the overabundance of advertisements which fill the airwaves, cable channels and pages of traditional media. This phenomenon is known as "clutter." A lack of clutter is one of the key advantages of product placement.

The first level of advertising clutter is within a media vehicle itself. Magazines, newspapers, radio and television are all loaded with ads which constantly interrupt the programming or the articles. Theatrical movies, on the other hand, are free from advertising interruptions, as are many of the ancillary distribution channels for films, such as home video and premium cable channels such as HBO.

Product placement does not interrupt the flow of the film and is therefore less obtrusive than other forms of advertising. The artistic sensibilities of most directors and their concern about over commercializing their films helps to keep the total amount of placement within any given film to a minimum. Hence, most films are not cluttered with product placement.

It is also rare, though certainly not impossible, for competing products to be featured within the same film. Corporate marketers frequently expect no competing products to be featured within a film which they have contracted for placement. Studio product placement executives attempt to ensure this through regular contact with the production team and frequently reviewing the dailies (the unedited footage) and rough cuts of the film.

The second level of clutter is adjacent to the vehicle. Although some theaters show ads during the previews, most do not. In fact many major studios have policies which prohibit such advertising. A few theaters have commercial slide shows preceding the films, but these appear while the lights are still on. Even so, this is still far from the level of clutter one encounters on broadcast television.

The third level of clutter is within the immediate environment, i.e. the theater and lobby. Aside from movie posters, the occasional banner, and the previously mentioned slide shows, movie theaters themselves are devoid of advertising. This places the audience in a clearer state of mind from the onset and, therefore, they are more likely to enjoy the film and observe the product placement within it. Since at each level, there is a virtual dearth of advertising, this provides the corporate marketer with an extremely clutter-free medium within which to use product placement as a promotional tool.

HIGH PROFILE

The film industry places a tremendous emphasis on the theatrical distribution of its films. A massive marketing campaign precedes the opening of nearly every Hollywood feature film with the usual goal of driving the opening weekend. After this, word-of- mouth takes over and ultimately determines the fate of the films domestic release-a hit, a bomb or somewhere in between. The success of the product placement is thus tied to the success of the film.

For the sake of comparison, the production costs of a studio feature film average $28 million, while marketing expenditures typically increase this figure by fifty percent. 34 Eighty percent of marketing costs are incurred from media expenditures and seventy-five percent of the media expenditures take place in the first week. 35 This means that approximately $11.2 million is spent on media per film and $8.4 million in the first week, on average.

A film which is successful theatrically is virtually assured success in all other distribution channels. 36 Plus, a hit film becomes more than mere entertainment, it evolves into a cultural phenomenon-a permanent and ever-present part of the cultural landscape.

For these reasons, the level of attention placed on a film's opening weekend is very high. A film that opens big will usually do well throughout its entire domestic theatrical run. Conversely, a film which opens poorly has little chance of ever catching up at the box office and almost certainly will totally bomb theatrically.

For the same reasons, although corporate marketers expect a film in which their products are placed to receive distribution beyond its initial theatrical release, much of their attention is focused here. If their films do well theatrically, then not only are they assured of very wide reach for their placement, but the chance of their placement being elevated along with the film into the collective consciousness of the nation, or even the entire world, significantly increases. Like the studios themselves, the corporate marketers are hoping for a blockbuster.

It is perhaps this factor, more than any other, which drives corporate marketers to use product placement as a promotional tool. For what company would not want one of its products to be elevated to stardom like the Ray Bans worn by Tom Cruise in "Top Gun" or for that matter in "Risky Business?"

OPTIMUM VIEWING ENVIRONMENT

Although the extensive reach of a feature film product placement is a result of the many and ever-increasing distribution channels for feature films, the theatrical movie-going experience offers both filmmakers and corporate marketers the ultimate opportunity to expose their respective products. In addition to the lack of clutter, the theater experience is superior to all other methods of simultaneously reproducing images and sounds. Today's modern movie theaters are vastly superior to all other non-theatrical alternatives, such as home video, cable or broadcast television. Even the most sophisticated so-called home theater systems pale in comparison to the average movie theater experience.

The resolution, size, and aspect ratio achieved through motion picture projection allow the images to convey a depth, brilliance, and power which is simply unachievable through even the best picture tube or projection technology. Even the next generation of television, known as high-definition television or HDTV, will have resolution which falls short of even 16mm, much less 35 or 70mm film.

Likewise, although closer to theater standards, home systems can not deliver the sound quality of a theater sound system. In recent years, theaters have been responding to advances in home audio technology by upgrading their sound systems newer technologies, such as Lucas Films THX and even fully digital systems such as Sony's.

Such high quality image and sound reproduction systems offer corporate marketers an environment which can depict their products and services in the best possible light. So, not only will millions watch Clint Eastwood drink the previously mentioned Coke Classic after saving the kids, they will be able to see the Coke can ten feet tall, with no discernible grain, and hear the fizz in Digital Dolby on a THX surround sound system.

A CAPTIVE AUDIENCE

Another advantage of feature film product placement is ability of this medium to deliver a captive and more accurately measurable audience. Movies, particularly in the theater, grab the attention of an audience more so than most other forms of entertainment. TV and radio are frequently used as a type of companion or ambiance which are left on while other activities, like cooking, cleaning or homework, are taking place. The movie-viewing experience, even at home, is thought as of more an event, which is thus better able to capture the viewer or audience's attention.

The investment of additional time and money required to view a movie in any of the early stages of distribution prior to broadcast television, such as theatrical, premium cable, pay-per-view, or videotape require an additional expenditure, such as the ticket price, rental cost, pay per view fee, or premium cable channel surcharge. This translates into a higher value being placed on the activity and thus a greater likelihood the consumer will watch the entire film and be exposed to the placement contained within it.

Additionally, watching a film in a theater or renting one from the local video store requires an additional expenditure of time and energy which is not required of the typical broadcast or cable TV experience. Unless, of course, one counts pressing the button on the remote control. The feature film viewer is thus a truly captive audience for the film and the placement.

For the corporate marketer investing in product placement, a captive audience not only translates into a significantly greater chance a viewer will actually see the placement, but it also enables more accurate measurement of exposure levels relative to traditional advertising. This is because the message is actually embedded within the content. This is because the number of people who actually see the placement is about the same as the number of people who watch the film.

Advertisers have always been vexed by the problem of determining how many people are actually seeing their ads. There is a large amount of uncertainty and a potentially huge disparity between the number of people reached by the program versus the number exposed to the commercial. The numbers supposedly reached do not reflect the number of people who actually are watching the program, merely those which have been recorded as having tuned in for a period of time, perhaps not even the entire show.

As mentioned earlier, the supposed viewer may not be actively watching the program or they may be channel surfing, particularly during the commercials. Others may leave the room or mute the volume during the commercials. In any case, a show's Nielsen rating overstates the number that are actively watching the entire program. Even fewer still are actively watching the commercials. Therefore, when compared to television advertising, corporate marketers who invest in product placement are better able to determine the number of consumers they actually have reached through their efforts.

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BENEFITS TO FILMMAKERS

The filmmakers, through the efforts of the studios and major production companies, derive a variety of tangible benefits from product placement. One of the first things that industry professionals consistently cite as an important qualitative benefit of product placement is the sense of realism it adds to motion pictures. Many recall instances from the past where a character in a film would pick up a generically labeled product, such as a soda or detergent labeled "soda" or "detergent."

Such lack of realism calls attention to itself and thus distracts the audience from the film. Even attempts to label a product with a more realistic looking, but still unfamiliar label, or by slightly varying the name to avoid legal clearances problems, still lacks the authenticity of the original and can also distract from the film.

However, aside from the realism it adds to the films, product placement provides an important set of quantitative benefits to filmmakers, specifically cost-reduction, revenue generation, and cross-promotions. Although there has been a significant shift over time in the relative percentages of each, all three of these benefits are still currently being derived.

While exact numbers are difficult to come by, an informal industry survey indicates that at present, over fifty percent of placements are compensated through cost-reductions, about thirty to forty percent result in some type of cross-promotion, and less than ten percent involve fees. 37 Some placements are compensated through a combination of two or, on rare occasions, all three. 38

Such percentages, however, give no indication as to the value each category contributes to the total value derived from product placement. Such a weighted analysis for each category of benefit would be useful because the absolute value of each placement and the value it contributes depends on the category.

For instance, a single placement may result in a $3,000 fee, another may deliver cost savings of $1,500, while a cross-promotion developed from a placement may be worth $50 thousand to $5 million or more. The value contributed by each category will be discussed in the following sections, as will the relative importance of each.

COST-REDUCTION

The most frequent quantitative benefit for the filmmakers and studios derived from product placement involves associated cost-reductions. Many of the studios, including the ones with the largest staffs dedicated to it, see this as the primary benefit of placements. These cost-savings are realized in the props, set decorations, and locations which are provided for free and which ultimately end up on-screen.

These items range from large items, such as cars and boats to smaller items such as televisions, clothing, and sunglasses. Such cost-savings can be substantial as these items would otherwise have to be purchased or rented. Prop rental typically costs 10 % of an item's value the first week and 5% each week thereafter. 39 Acquiring realistic locations can also save substantial money. Building or renting specialized locations can cost tens or even hundreds of thousands of dollars or more.

Studios are not the only ones to realize such savings. Cost-reductions are especially important to independent filmmakers. Dan Hassid, a founder of Cineville and producer of "Gas, Food and Lodging" and "Mi Vida Loca," explains:

"Product placement helps both in terms of the look and what it saves you. For independent films, the most obvious level is cost reduction-what it enables you to put in front of the camera that you don't have to spend money on. For instance, i f you can get a dozen picture vehicles [cars used in films] that you don't have to rent, it can save a lot of money." 40

Most of these items need to be returned, and in their original condition; however, this is not always the case. Items which already have been written off by the companies, such as damaged products and prototypes, are sometimes provided which can then be modified or destroyed.

Substantial savings also can be realized in the enormous logistical expenses of producing a film. Airlines and hotels often provide free or reduced rate services in return for placement. Food and beverages which are provided can reduce the cost of feeding the crew. Frequently companies like Coke will supply soft drinks for the entire production. Studio executives would then refer to this as a "Coke film."

Sometimes, companies whose products are placed provide or pay for the traditional end of production gift, such as a customized crew jacket. Other specialized items are provided. Dean Ayers of Anheuser-Busch explains:

"Most of the compensation for our placements involve providing product, neon bar signs, or banners, but we also do all kinds of special things. For instance, for "Drop Zone," a sky diving film, we put up large inflatables. These are very expensive and have to be shipped in and set up. We also set up hospitality tents for the crew. One of our wholesalers also loaned them a truck to dress the scene [use as a prop] for a number of days." 41

Acquiring realistic locations can also save substantial money. Building or renting specialized locations can cost tens or even hundreds of thousands of dollars or more. One studio executive recalls a recent case where product placement was instrumental in actually having the film green-lighted. Much of the film was to take place in a popular fast-food restaurant and it would simply have been too expensive to build one. Without the product placement deal, the film most likely would not have been made.42

Perhaps the most important ramification of the cost-reductions resulting from product placement is that this benefit is highly visible to the production executives at the studios and to the filmmakers. Since these individuals are often criticized for the constantly rising cost of producing films, they are always looking for the opportunity to save money.

Product placement is seen as a way to help control costs, which can then be readily cited to upper management as a justification of the time and resources spent pursuing placements. Also, since the production side of the studio is the most powerful, this benefit of product placement is frequently given top priority.

REVENUE

On the surface, charging corporations fees for placing their products in movies seems to make a lot of sense. After all, these same companies pay huge sums of money to produce and air TV commercials and other forms of advertising for their products. One would then expect that the studios, whose big-budget films are seen by millions of captive consumers, would garner enormous amounts of money through fees for product placement services. But, in fact, this is rarely the case.

Not only are large amounts of money not changing hands, but fee deals are actually more an exception than the rule. "The days of the large fee deals are over. The fees peaked in 1987 and have been declining in size and number ever since," says Melissa Robinson of Paramount Pictures. 43 Michael Schrager of Sony Pictures concurs that "there has been a decline in fees and a related decline in the willingness of corporations to pay them." 44 One studio even prohibits them altogether, while others emphasize that fees are of minimal importance.

Additionally, many placement agencies say most of their clients will not do fee deals. Frank Devaney of Rogers & Cowan says he "hasn't done a fee placement in the last year at all. The studios are not pressuring us for the fees. We estimate they account for less than 3% of all placements." 45 While perplexing, the situation is understandable.

Several reasons are cited for the limited number of fee deals and their declining use over the years, including the overall decline in corporate marketing budgets. One of the reasons studios are reluctant to use fees is because of the inability to guarantee the placement will actually occur. The failure of a contracted fee from actually appearing in the film can result from any number of factors, from last-minute script changes to editing decisions which eliminate the shot or scene which contained the placement, i.e. ending up on the proverbial editing room floor. Studios and corporate marketers alike admit that companies frequently supply products and receive no exposure.

Even though fees are normally not paid until after the placement has occurred, adding a fee to the deal, especially a large one, considerably increases the pressure on the studio to perform. Since placements are inherently difficult or impossible to control, a reduced emphasis on fees thus eliminates a lot of unnecessary pressure and a another source of potential misunderstanding between the corporate marketers and the studios.

Another reason for the decline in fees is the desire by the studios, agencies and corporate marketers to avoid the occasional controversy surrounding product placement. In the past, critics have claimed that product placement is a type of subliminal or disguised advertising which influences hapless, unwitting consumers without their knowledge. But, if companies are not directly paying for product placement, then to some extent it undermines the strength of this argument.

Although never specifically stated, one also gets the impression from the agencies and studios, as well as the corporate marketers, that fees are somewhat "dirty" or beneath their dignity. Even so, fees deals still do occur, with fees rarely going over $ 20,000 and most averaging $5,000 or less. Some studios use fees only for specific types of products, especially for products which do not lend themselves to cross-promotions. Conversely, fees are frequently not used for high-dollar item products because the value of the items being provided are already high.

In any case, if a cross-promotion is subsequently developed, then the entire fee is usually waived. Even though more and more companies are recognizing the value of product placement, it is unlikely that fees will rise in the near future. The forces tha t contributed to the decline in fees continue to persist.

PROMOTIONS

The primary method of promoting feature films is through movie trailers, traditional advertising and publicity. However, other types of promotions are used by the studios as a creative way of reaching potential movie patrons, such as sponsoring movie tickets giveaways on a radio station. A particularly potent type of movie promotion is known as a cross-promotion (also referred to as a back-end promotion).

A cross-promotion occurs when a studio enlists the support of a corporate marketer to promote a film to its customers via traditional advertising, in-store displays or other means. For example, Burger King did a large cross-promotion for "Batman" which included TV commercials, in-store displays and giveaways.

Cross-promotions sometimes are tied to product placements, such as Hershey's famous Reese's Pieces cross-promotion for "ET." It is here that the ultimate value of product placement can be realized. This is because promotions are substantially more valuable than the other benefits of product placement. Susan Sherman of 20th Century Fox explains that "the promotions department is trying to generate million-dollar promotions, not just thousands in product or fees." 46

Tony Hoffman of New Line Cinema concurs that "the promotions are the 'real' compensation for product placement." For instance for the New Line Cinema "Endless Summer" sequel, Sunkist had a soda placement which resulted in an cross-promotion on MTV valued at nearly $3 million. 47

Aside from the tremendous value of placements, a number of other factors account for the increasing emphasis on promotions as a benefit of product placement. First, in recent years the studios have increased their interest in cross-promotions as a marketing device and continue to develop more and more of them. Such promotions make sense for the studios in marketing their films as Frank Devaney of Rogers & Cowan explains:

"The studios are now looking for promotions. It gives them another marketing outlet and whole other audience they would otherwise never reach. It makes sense. The corporate marketers have already earmarked those dollars for an entertainment promotion somewhere, often in the Summer. McDonalds does three a year and most are linked to movies." 48

Since the same corporations pursuing cross-promotions are also frequently pursuing product placement, it makes sense to find ways to link the two. Not surprisingly, the studios which most fully embrace promotions as a benefit of product placement are the same studios in which the product placement function is a part of or report to the promotions department. However, even production resources offices without this arrangement regularly interact with the promotions department, particularly at the beginning of each new film project.

More and more frequently, promotions, product placement, and licensing are all being discussed up front at the same time, which furthers the relationships between these functions. Musette Buckley of Warner Bros. says:

"A placement along with a promotion is like icing on the cake. In the past, promotions have been done without it, but they're starting to realize that with it, it makes even more sense." 49

When placements and promotions for the same film coincide, they can have various relationships to each other. "Placements can generate promotions and vice versa," says Susan Sherman of 20th Century Fox. 50 In some instances, the original placement deal may specifically call for a promotion as the compensation. Other times, what begins as a placement with other benefits attached, such as cost-reduction or fee s, can later evolve into a full-blown cross-promotion. Conversely, existing plans for a cross-promotion can later evolve to encompass product placement as well.

The long lead times corporate marketers require to set-up a cross-promotion-frequently a year or more-often result in promotions being developed in conjunction with the home video release or other ancillary distribution channels. A recent example of this is the Casio G-Shock watch placement in Fox's Summer hit "Speed." The theatrical release date of the film did not allow adequate time to set up a cross-promotion with Casio. Instead, they developed a cross-promotion tied to the home video release. 51

Tony Grana of Universal says their home video division "frequently uses what's been placed in films as a target for developing promotional partners." 52 The placements then become the foundation of relationships which can later evolve to include cross-promotions. The recent TriStar film "Only You" is a good example of this. Randy Smith explains:

"TWA had a very successful placement in the film and also did a cross-promotion. Their decision to do a promotion was based exclusively on the fact that they had placement within the film. Air Italia is also in the film and one of the reasons TWA developed the promotion was to wipe away Air Italia's exposure. TWA basically wanted to make it "their" film. They ran an eight-minute trailer onboard their flights for a month, plus they provided us with half a million dollars worth of tickets to Rome which we used in our field promotions. It was "the" big promotion on that movie." 53

A placement may be directly linked to the execution of the promotion in some way. Susan Sherman of 20th Century Fox says that "sometimes promotions are contingent upon placement, but other times they're just an added incentive." 54

One advantage of linking the placement to the promotion is that the placement will have a better chance of properly occurring. "The success rate for product placement is higher when promotions are attached, because filmmakers are more involved in and aware of promotions and the potential ramifications if the placement does not occur," says Tony Grana of Universal. 55

The downside of linking a promotion to a placement is that if the placement does not occur or is cut out, then the promotion will suffer, perhaps even significantly, as a result. Susan Sherman of 20th Century Fox explains:

"Unless it's a story point, then it's risky to structure the promotion around a placement, because no one, except for the director, can guarantee it. The promotion must stand alone in case the placement gets cut out. For corporate marketers, the association can be so much greater than simply being in it the movie for five seconds. It should simply be an added incentive. What's important is finding a good fit and a proper release window. You bring a project to someone and say, "if this make s sense to your beer company to have a placement in 'Die Hard 3' which will deliver a male audience similar to your target market, then let's get you involved in the film." Then we can hopefully expand that association into promotions for the theatrical release, home video, and internationally. It's just a sort of stepping stone that starts with product placement." 56

Evolving relationships such as these make coordination more and more important for the studios and corporate marketers alike. It is becoming common practice for event films like Universal's "The Flintstones" to develop overall marketing plans which tie a ll the elements together. In this case, McDonalds received placement in the film-via a "RockDonalds" fast-food restaurant-and was also involved in licensing and both in-store and television cross-promotions.

Warner Bros. "Demolition Man" is another example of this phenomenon. Musette Buckley of Warner Bros. explains:

"It can be like an overall program. Some producers, like Joel Silver, are very big on that. I think Joel did a phenomenal job promoting "Demolition Man" with Taco Bell and GM. He took it from the product placement to the cross-promotions for the film to the video release. He was involved from the very beginning. He even added video games and later modified the film for its international release by changing the placement and promotion from Taco Bell to Pizza Hut by reediting the film digitally. It's great when you can get all the players involved like that. It was the same with "Batman," but you can only do it with a couple of products per film. It can all start here with product placement. That's what really makes this department valuable." 57

Successful placements tied to cross-promotions do not have to be blatant to be effective. Even serious films can benefit from placement driven promotions, as was the case with Italian clothing designer Cerrutti's placement in "Philadelphia. " In addition to the cross-promotion, Cerrutti helped to underwrite the film's New York premiere which was also an AIDS benefit and they also provided additional clothes to the actors for the press junket. "Non-branded placement like this works well in more serious movies. It's still valued by companies, but it's not as potentially offensive to consumers," says Randy Smith, Executive Director of National Promotions for TriStar Pictures. 58

Though some corporate marketers and studio executives prefer to keep product placement and promotions separate, as can be seen, there are many reasons to bring them closer together. This is not to say they should always be linked, but at the very least, they should be given the opportunity to complement each other whenever possible.

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Chapter 3: Legal and Research Issues

CONTRACTS

Product placement contracts are generated by the studios, which typically use a standard set of contacts which vary in complexity depending upon the type of placement and the particulars of the compensation. Special contracts are sometimes written, particularly if the compensation includes a promotion. If a placement agency is involved, it will normally only negotiate the contract. The final decision, unless the agency and its client have a specific relationship, resides with the corporate marketer.

Though the contracts are generally described as vague and for giving the balance of power to the studios, both sides are quick to point out that the contracts themselves are not as important as the reputations upon which they are based. The immense value placed on relationships in the entertainment business ensures that product placement agreements are not broken. To some extent then, the contracts are a formality.

Reinforcing this is the small size of the product placement industry. So small, in fact, that nearly all the players on both sides know each other by first name. In such an environment, a few broken promises would seem likely to almost cripple the effectiveness of any studio's production resources or product placement department. As such, reputation is all important.

GUARANTEES

The "above-the-line" talent's control of the filmmaking process makes guaranteeing placements a risky business at best. Given such lack of control by the studios executives, the success rate is still fairly high though. For example, based on a two year study conducted by Rogers & Cowan for their client AT&T, their placements fall through less than 30% of time. 59

Still, with nearly a third of the placements never occurring, the studios have ways to limit the risk for the corporate marketers and make the misfires as painless as possible. One way they do this is by not accepting fee payment until after the film is finished being editing. A second way is by agreeing to pay a fee (rental or purchase) for products which were provided for the production and not successfully placed.

The last, and perhaps the most painful, remedy for a failed placement is to cancel subsequent promotions. This would apply if the promotion was the contractual compensation for a placement. In the majority of cases, however, cross-promotions are developed independent of the product placement agreements.

TONE & MANNER

Negotiations between the studios and the corporate marketers frequently focus on the manner in which the products will be portrayed. Scripts are usually reviewed and the page(s) dealing with the placement are often attached to the contract. If the scrip t is changed in a manner which may effect a placement, the studios are usually obligated to contact the corporate marketers or their agency, who may then decide whether or not to proceed with the placement.

Other times they may choose to renegotiate the terms. Changes which effect the placement are not simply limited to the manner the product itself is depicted, but may result from changes in the tone of the overall film or a change in the anticipated rating. For instance, what was originally a PG-13 movie may find itself more likely to receive an R rating. Although directors typically contract for a specific rating, changes do occur.

CONTRACTUAL PERFORMANCE

The studio executives review the dailies (the unedited footage) and the various cuts of the film to determine whether contracted placements have occurred and to look for inadvertent placements of competing products. The studios sometimes provide production stills of the product within the film to give the corporate marketers an idea of how the placement was executed, as well as partial proof of performance.

The studios rarely allow anyone other than those directly associated with the film or the studio to see the dailies or the film prior to its release. This is done in order to help control advance publicity for the film which could work against the studio 's marketing strategy.

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AWARENESS

Although insuring that a placement actually occurs, and in a positive light, is the chief concern of corporate marketers, the mere placement of product says little about its effectiveness as a communication device. Some corporate marketers are interested in the level of awareness their placements are able to generate and at least one corporation has had talks with a major studio about establishing a long term relationship which would require a certain level of awareness on all its placements.

Most of the contracts at least imply a certain potential for awareness by calling for things such as "clearly identifiable" placement and sometimes for a minimum amount of time. Though the main purpose of establishing such criteria is to determine whether or not the placement has actually occurred from a contractual standpoint, this would be the first step towards actual awareness occurring.

On occasion, contracts are written which specifically call for a level of actual awareness. In such cases, the testing is usually done through an outside testing firm and typically use aided recall of movie patrons during an exit poll.

One potential problem with using awareness as a goal is that awareness can be a double-edged sword. As awareness of a placement increases, so too does the chances of it insulting the audience. This is not to say that a bold placement will always backfire, but as an audience becomes more aware of a placement there is a greater chance the placement will call attention to itself as a placement and thus undermine the credibility of the film.

This "Catch 22" situation is one of the inherent risks of all placements and one of the reasons some directors avoid them altogether. Still, such risk can be minimized by not forcing the placement and by relying on placement opportunities which naturally evolve from the script.

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REACH

In all forms of traditional advertising, a corporate marketer knows, and is usually guaranteed, the number of people their message will reach. Even though studios keep track of the "reach" of their films through box office totals and other indicators, re ach is rarely specified in a product placement contract.

Since the vast majority of product placements rely on cost reduction and promotions as the principle compensation, citing a specific reach target would make both these scenarios problematic as the compensation to the studio would occur before a film's reach could be figured. Using reach as an indicator of contract performance would seem most applicable to fee deals, but the fact that fees are used so infrequently minimizes such opportunities.

If reach was used as a performance criteria, the question then arises as to which distribution channels would be counted? Domestic box office would certainly be the easiest to tabulate and the most immediate. It could be argued, however, that the other ancillary distribution channels should be included, since these do add appreciably to the total reach of the film.

Since it is years before all these figures could be tabulated, such long-term record keeping would certainly seem unnecessarily complex and certainly an accounting nightmare. Thus, using the domestic box office would seem to be the only practical measure of reach. It is also a fairly good indicator of how a film will subsequently do in other markets and distribution channels.

The idea of using a sliding scale which ties the fee to reach of a film could be used, and has been in certain isolated instances. This would take the form of an "escalator clause" in the product placement contract. Some corporate marketers doubt the vi ability of the concept, however, because they are concerned about the difficulty in budgeting for such placements, particularly in the case of a runaway hit.

However, this problem could be overcome by establishing a ceiling level above which the fee remains the same. The fee would still slide, but within a more limited range. The high end could then be safely budgeted for, with the knowledge that most films would perform beneath this upper range.

The downside risk of a budget surplus at years end would be minimal, since fees are used in relatively few product placement deals. For this same reason many may come to another conclusion regarding sliding scales, namely "why bother?" Since corporate America's relationship with Hollywood is already awkward, simplification would seem to be what is needed, not further complexity.

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DEMOGRAPHICS

As with reach, traditional advertising focuses great attention on demographics-the key attributes which define a person such as age, sex and income. Although the studios and the corporate marketers involved in product placement are concerned with the demographics of their films' audience, the issue is never addressed contractually. There are a number of reasons for this.

First, though the studios do have target demographics for their films, they are obviously only speculative, because every new film is basically a new product introduction. Television, on the other hand, is predominately composed of recurring episodic programming with each show attracting a fairly consistent and predictable audience in terms of demographics.

For instance, if you advertise on the "Simpsons" this week you know the demographic because the same audience tuned in last week. Films have no such built in audience, and until they are released no one is exactly sure who is going to come see them. The one possible exception to this is sequels, but these often reach only a small subsection of the original's audience.

Second, the speculative demographics are typically very broad. This is because Hollywood films primarily aspire to become hits. By definition this translates into a large, widely dispersed demographic market. More narrowly targeted genre films such as action-adventures are still being targeting at relatively broad demographic, such as 18-35 year old males.

Even these "narrower" films ultimately hope to "cross-over" to a wider audience. For instance, "Die Hard," which was clearly an action film, ended up having much wider appeal and thus attracted a very broad demographic.

In addition to the specific genre, other factors can give some indication as to potential demographics. Certain stars can have stronger appeal to specific demographics. Also, the advertising and promotions for a film are usually targeted at a specific demographic. Lastly, the rating of the film can be an indicator, particularly at the extremes of "G" and "R."

None of these factors, however, are a guarantee of demographics. For these reasons, product placement agreements avoid demographics. If a cross-promotion is involved, then demographics becomes more of a concern to corporate marketers, because significantly more time and money is being invested.

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CLEARANCES

One of the principle reasons the contracts originate with the studios is because filmmakers are required to have the rights, commonly referred to as "clearances," to depict registered trademarks in their films. For instance, if the Bruce Willis character in "Pulp Fiction" made himself a Spam sandwich on Wonder Bread, then, regardless of whether or not this was a compensated placement, the studio would need to acquired the rights to visually depict these registered trademarks in the film.

The prevalence of corporate brand images in the environment are underestimated and their absence would be duly noted by the audience. As with product placements themselves, such clearances are critical to a filmmakers ability to portray the modern world i n a realistic manner. Hence, clearances are key component of most product placement contracts.

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TESTING

The industry itself conducts very little research or testing on the effectiveness or the results of product placement. Most of the studios offer no testing and, in general, are quite skeptical of it. As one studio executive puts it:

"We do no testing of our placements. We don't need to test it. It's a no-risk situation. Send me some product and I'll send it back to you. Since they aren't paying for it, there's no need to test it. Also, it's difficult to quantify the results." 60

When testing is done, it is often by the corporate marketers themselves. Some product placement agencies also offer testing for their clients using outside research firms. Still, such testing is on a very limited basis. In fact, only Anheuser-Busch and AT&T seem to regularly conduct tests on the results of their placement efforts.

One of the reasons so little testing is done is because of the relatively small amount of resources corporate marketers allocate to product placement. Significantly more money is spent on traditional advertising, therefore it must be more thoroughly justified. Also, as with the motion pictures industry itself, the decisions are often based on experience and gut-level instincts.

Beyond effecting awareness, many in the industry feel that product placement can occasionally increase the intent to purchase. Focus groups have indicated that the right kinds of placements make customers feel good about a brand because it is being associated with something positive, thus making it more likely they will purchase the product. However, other market factors effect consumer purchase behavior. Gary Mezzatesta, of UPP explains:

"It's hard to isolate product placement and intent to purchase, except on the rare occasion when it comes out of left field and it's so obvious. But, usually this is not the case. For instance, say you have a film which has a big star like Kevin Costner where he accidentally spills motor oil on his fiance's wedding dress. His bride-to-be is upset and the future mother-in-law wants to kill him. He takes the dress and washes it with Tide and the stain comes out. He brings the dress back and it's this big warm scene and everyone is kissing and hugging each other which makes the audience feel warm and fuzzy about Tide. One would then assume this would create intent to purchase Tide. However, Tide is also spending $80 million a year building intent to purchase in other ways, so how can the effects of the placement be isolated?" 61

Many other problems also confound the efforts to measure the effects of product placement, as well as traditional advertising, on purchase behavior. A number of environmental factors, such as the actions of competitors, the state of the economy, the political climate, changes in the product, its price or its methods of distribution, and even the weather can all have a significant impact on purchase behavior and the intent to purchase.

Still, industry research has provided some useful insights. Focus groups conducted by Anheuser-Busch have helped clarify consumers' attitudes towards product placement in general. Dean Ayers of Anheuser-Busch explains:

"Our focus groups have consistently indicated that people don't care if products are used in films as long as it is not rubbed in their face. They say it provides realism, helps them relate to the characters and associate with the film better. T hey also find it less distracting than using generic products." 62

The industry testing done on product placement usually consists of aided recall tests conducted during exit surveys. While useful to some extent, such methodology is often criticized for having a high margin of error. In the academic arena, there has be en only a minimal amount of research conducted.

There are some laudable efforts currently underway, but much of what has been done to date suffers from a lack of applicability. Many in the industry are aware of these efforts, but as one corporate marketer put it, "the academic research, although interesting, is not directly usable. It's not tangible enough." 63

Thus, the research of product placement from both an industry and academic perspective are ripe with opportunities. On the industry side, the studios could easily add a question or two to the audience reaction tests which are already conducted. Though such tests take place prior to the final cut, which means later editing might effect the placement, this would still seem to be a low-cost way of gathering information about various aspects of product placement.

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Chapter 4: Special Issues

ARTISTIC INTEGRITY

The issue of artistic integrity is perhaps the most important issue facing the product placement industry. This is because it impacts every other aspect of product placement. Maintaining the artistic integrity of the films in which placements is occurring is critical to the success of the individual placements as well as the viability of product placements in general. "The studios and corporate marketers alike are well aware of the potential consumer backlash to improper or excessive product placement, " says Randy Smith at TriStar. 64

Artistic integrity as it relates to product placement within any given film can be boiled down to one central issue, namely "does the product placement distract the audience from the film itself?" This can further analyzed by asking to additional questions. First, do any individual placements lack credibility from a story perspective? Second, is too much product placement occurring within the film overall? (This latter situation could be described as a sort of product placement clutter.)

While extreme cases are easy to determine, most placements fall within the gray area in-between. Although such judgments are inherently subjective, there are numerous indicators which can be used to help assess the integrity of the placement. One such indicator is to know the source of the placement. If the placement naturally evolved from the script, then the chances are much less likely that the placement will undermine the integrity of the film.

For example, say Bruce Willis's character in a film is driving a Dodge Viper because the screenwriter wants to use the car to establish the character's lust for power. This is not to say that a placement which is arbitrary can not work, it is just less likely.

The important thing to look at is the actually execution of the placement. Does it leap out at you or is it seamlessly woven into the visual texture of the film? For instance, does Willis just get into the Viper and drive off or does he "introduce" the car in some obvious way, which appears to the audience to be unnatural or contrived? Perhaps, for no particular reason, he says the name of the car or lists its features.

Although describing the car could be relevant to some plot devise or further character development, it may appear to be otherwise. As Dan Hassid of Cineville eloquently states:

"You don't want to pimp the movie. It can be really embarrassing. There have been some really shameless product placement. On the other hand, you have to weigh it against how much you're being compensated." 65

The camerawork can also be an indicator as to the integrity of the placement. For instance, does the camera slowly pan across the name of the car in a close-up? Again, this is not to say there could not be a valid cinematic reason for such an image. The products we use say volumes about who we are as individuals and thus showing a brand name may serve the interests of story.

Conversely, a placement which originates from a source other than the script may in fact work, but the chances would seem riper for awkwardness and ill-fit. The bottom line is the natural fit of the placement within the scene. For instance, the opening shots of "Days of Thunder" abound with product logos on literally every car, uniform, helmet, plus signs and banners around the entire race track, but this is a normal part of the scenery at an auto race.

It does not distract the audience from the film, because it naturally occurs in the environment and helps to establish the realism and ambiance of the scene. In fact, if the scene were shot without these images, the integrity of the film probably suffer greatly.

Too much product placement within a film leads to a sort of product placement clutter which can then undermine the film's artistic integrity. Clutter may take two forms. The first scenario involves an excessive number of placements for a given product. Dean Ayers of Anheuser-Busch explains:

"We had a situation where a well-intentioned producer wanted to put some additional product in the movie. We already had substantial placement in the film and this additional placement would have been so over-the-top, that in my estimation, i t would have seriously undermined the integrity of the film to the point of actually hurting its commercial potential. If it hurts the box office, then it hurts both of us. It does me no good to have tons of products in a movie nobody sees. I'd rathe r have a weaker placement in a stronger film." 66

The second type of clutter is when an excessive number of placements of different products occur within a given film. Classic examples of this are "Mac and Me" (an "ET" rip-off) and "Leonard, Part 6" (Bill Cosby stars and wishes he had not). Both of the se films had such an abundance of product placement that many critics saw them as little more than 90 minute commercials and to this day serve as an embarrassment to the industry. They are prime examples of how not to do product placement.

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NEGATIVE PLACEMENTS

Corporations spend vast sums of money encouraging consumers to think positively about their products and services. So, it is not surprising they usually do not want these same products or services appearing in negative or controversial films and almost always not within a negative scene or associated with a negative character. Although there are some exceptions, corporate marketers, more often than not, only want their products placed in positive and unambiguous ways. As one studio executive puts it:

"Corporate America has no sense of humor. They spend millions to say their products are good and they don't want some film to undermine that perception. So, they rarely get involved in negative placements." 67

Or, as Dan Hassid of Cineville hypothetically describes a corporate marketer's reaction to a negative placement opportunity, "What do you mean you're going to kill someone with a bottle of Evian water?" 68

There are three basic levels at which the negativity of the placement can be judged and a decision must be made. First, is the film itself too negative overall to be compatible with the identity of the product? Second, is the scene in which the placemen t is to occur acceptable? Lastly, are any character(s) associated with the product acceptable, particularly their actions related to the product?

Most corporate marketers require a "yes" to all of these issues prior to getting involved in a placement. Sometimes a company will allow a product to be used in a less than optimum situation, but without compensation. As one studio executive put it, "corporate marketers recognize that there are different degrees of negativity. Some situations they don't find too offensive, but they're still not willing to compensate us for the placement." 69

Many companies actively involved in product placement have specific guidelines for how their products are to be depicted. For instance Ford will not allow its cars to be depicted in a scene with failed brakes, a dead battery or a flat tire. Basically, t heir cars can never be at fault. On the other hand, they will allow a "bad guy" to drive a Ford. 70 [Though, lately, Ford may be a little more sensitive about white Broncos.]

Given the large amount of time and money corporations invest building positive brand equity, it is difficult to fault them for their conservatism. Gary Mezzatesta of UPP Entertainment Marketing summarizes the advice he gives to corporate marketers concerning placement in negative situations:

"We advise our clients to be careful and protective of their brand's image because of the high value of their existing product equity. Questionable or off-color images or those inconsistent with their brand's image should be avoided. We feel it's worth less than the reward in the long run." 71

While such advise is certainly prudent, one point that corporate marketers seems to overlook is that the same millions who line up to see these controversial, negative or off-color films are, in fact, many of the same consumers of their squeaky-clean products. Let us now take a closer look at the three above mentioned levels from which negative associations supposedly arise.

NASTY FILMS

Although Hollywood is sometimes criticized for only producing superficial films with happy endings, corporate marketers know this is not the case. While the major studios regularly produce innocuous films like "ET" and "City Slickers," they also produce and distribute films like "Basic Instinct," "Apocalypse Now" and "Taxi Driver."

While many of the most obnoxious and depraved films are not produced by the major studios, they too have their share of ignoble films. After all, the studios' main concern is the commercial viability of their product, not creating a pleasant vehicle for product placement.

Some corporate marketers believe a negative association can develop because of placement within a "negative" film (which should not be confused with a "bad" film). This overlooks the fact that these so-called negative films are not perceived as negative by their audience. People that go to these violent, gory, frightening, immoral, grotesque, or vulgar films do so-believe it or not-because they actually enjoy watching them.

Conversely, people with more delicate sensibilities who might be offended by such films are, by and large, not in the audience. This is because the studios, just like other consumer product companies, target their products to specific markets. Targeting is particularly keen with genre films, which tend to be the main culprit whe n it comes to negative films.

Thus, the people who see a placement in a negative film will not make a negative association, because they do not see the film itself as negative. The people who might make a negative association are not watching the film and thus unaware of the placemen t.

Beyond simply targeting their promotions to assure a receptive audience, advertising for films are unique in one important way. Unlike advertising for most other consumer products, the primary method of promoting movies is by delivering a sample of the product to the target market, i.e. the movie previews (trailers) in theaters and on TV. By watching the preview one gets a pretty good idea of what the film is like, because you are actually seeing parts of the film.

Thus, if you do not like the trailer, then you probably will not see the film. Again, this is not to say you will like the film, just that you will not wander into a slasher film thinking it is a romantic-comedy. After a film opens and word-of-mouth takes over, attracting the wrong audience becomes even less likely.

Since so little product placement takes place in negative films, it could be argued that such films would be an excellent opportunity for product placement, since there would be little competition. Also, placements in such films would encounter less product placement clutter overall and would thus stand out more as a result.

It is even conceivable that audiences for such films would actually reward the corporate marketers for such a brave initiative. Imagine the impact of having the main demon in "Chunkblowers from Hell, Part 26: The Final Insult" proudly claiming to be a "Bud man." Then again, maybe not.

NASTY SCENES

Though corporate marketers are concerned with the tone of the film overall, they are even more concerned with the actual scenes in which their products will be depicted. Even though the film overall may be acceptable, the specific scene may not. For instance, it is unlikely Sears' Craftsman division would compensate a studio for a placement like the chainsaw torture and amputation scene in "Scarface." The concern here is basically the same as with an overall negatively-perceived film, namely that their product would be associated in a negative way with the objectionable actions depicted in the scene.

Though the potential negative association here is invariably closer to the product itself, the question is, would the public actually associate the two. Here, the decision becomes somewhat more clear cut. If the product's depiction within the scene is directly related to the negative action, then the corporate marketer probably has good reason to not get involved. For instance, a placement involving someone who dies after eating a Chicken McNugget, or a scene in which someone is blinded after being sprayed in the eyes with Pam, would probably not be in the best interest of their respective companies.

However, the decision becomes less clear if the product is merely an inconsequential prop or some item in the background of a scene. Here, the potential link is much more distant and the negative actions are not directly related to the product, such as beer signs in the background of a bar in which a shoot-out occurs or a FedEx package which contains stolen goods. In such a situation, it would seem unlikely the audience would associate the ensuing unpleasantness with the placements in the scene.

NASTY PEOPLE

Frequently accompanying the review of the scene is an assessment of any character who is actually associated with the product, particularly their actions within the scene in which the product is actually depicted. While such an examination is certainly prudent, it frequently leads to the decision not to get involved in placements associated with characters with less than laudable values.

While on the surface this is understandable, some argue that even placements associated with "bad guys" can be valuable. The question is, why would a corporate marketer want some sociopathic, murdering, tax-evading, drug-dealing, arch-criminal to be associated with their products? Well, for one thing, as Michael Schrager of Sony Pictures explains, prestige:

"In the film 'Clear and Present Danger,' the underhanded security chief of a Colombian drug lord drives an Infinity. Here's a man who can have anything he wants and he picks an Infinity." 72

In such situations, the product itself is not intended to reflect the character's depravity, but rather his success. It is also not associated with the source of this success, merely a symbol of it. An even more compelling and, perhaps, somewhat disturbing argument is that at some level people frequently identify themselves, at least in part, with despicable, yet successful characters because such characters possess the status, power and wealth that they too wish to attain.

Such a Darwinistic argument, although intriguing, would probably not convince too many corporate marketers. Still, as with the Infiniti example, some corporate marketers are willing to take the risk by associating their products with bad guys.

NASTY TV

The same fear of potentially negative associations which deters corporate marketers from negative placements is also evident in their attitude towards television advertising. Here too, corporate advertisers shy away from buying airtime during programs they deem objectionable, controversial or negative. Some critics feel such policies are to blame for the decidedly mediocre programming which fills our airwaves and cable wires today.

Advertisers' paranoia is evident in their virtual ban on advertisements during news coverage of wars, disasters and other so-called negative or controversial programming. However, such attitudes have recently shown signs of abating as evidenced during the Persian Gulf war. Here, CNN made history, not only for its extensive coverage of the events preceding and during the hostilities, but also for the enormous profits it was able to reap from advertisers.

Of course the situation with movies is a different matter, as here the "commercials" are actually incorporated into the programming rather than simply punctuating it as with TV commercials.

NEGATIVE CONCLUSIONS

Overall though, corporate marketers still avoid "negative" placements as a general rule. The above discussion attempts to point out that perhaps much of the fear of negative associations are unfounded. This is not to say that corporate America is wrong in erring on the side of caution, merely that there is probably much less at risk than what is commonly perceived.

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SOCIETY & ETHICS

Some critics have contended that product placement is unethical because it is a secretive, subliminal form of advertising. There has even been a failed attempt to ban product placement, but fortunately the First Amendment stands in the way. As their views on negative placement make clear, corporate marketers want to avoid controversy, not embrace it and the efforts of ERMA should help mute future criticism.

While the marketers of alcohol and cigarette products are perhaps the easiest targets, the efforts of the studios and the corporate marketers themselves have minimized the opportunities for criticism in these areas. Though beer marketers have been aggressive in promoting their products through various types of entertainment marketing, they have carefully avoided even the hint of impropriety concerning underage drinking. Dean Ayers of Anheuser-Busch explains:

"There are two reasons Anheuser-Busch doesn't try to influence kids to drink. Number one, it's not morally right and number two, they can't buy our products anyway, so why should we waste our money. Banning beer placements isn't going to stop kids from being inadvertently exposed to beer promotions anyway, because they can still see TV commercials and other forms of advertising anyway. Even if they could get it, what kind of volume are we talking about. Sneaking a can of beer out of dad's refrigerator doesn't amount to much in terms of increasing our sales. It's not going to make a blip on our radar screen. For instance, when they changed the drinking laws from 18 to 21, the change in our sales was insignificant." 73

Most of the studios have policies concerning alcohol and cigarette product placement. Such policies frequently deal with script situations which calls for underage product usage. Beyond the social and ethical responsibility of such policies, they also make good business sense as they are a self-defense tactic against potentially negative publicity.

Tony Hoffman of New Line Cinema, himself an avid smoker, says New Line will not put branded cigarettes in their films because they do not want to see "negative trade ads with a still from one of their films saying New Line Cinema supports smoking among teenagers." 74 Such pro-active stances support the notion that the product placement industry is concerned with the social and ethical ramifications of its efforts.

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NOTIFICATION IN CREDITS

Some of the critics of product placement have called for mandatory notification or warnings in the beginning or ending credits of films in order to clearly identify the existence of product placement and the corporations responsible for it. Such efforts have also failed to gain any significant legislative momentum.

Product placement warnings or credits are opposed by virtually all of the studios and even most corporate marketers think they are a bad idea. They do not feel it will sell more products and it also calls too much attention to the placements. This undermines the artistic integrity of the film which, as mentioned earlier, damages the commercial prospects of the film and thus undermines the effectiveness of the placements as well.

It is believed most studios would discontinue product placement rather than attach warnings to the sacred beginning title credits of their films. Though ending credit identification would be significantly less repugnant to the studios, most would still most likely forego product placement rather than submit to such requirements as well. At present, the issue appears to be dead, so the point is moot anyway.

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INTERACTIVE

The interactive revolution is upon us, and although much of its true potential remains untapped and unrealized, its influence is already being felt in many industries, including product placement. By the end of the next year or two, most of the big quest ions should be answered, including whether or not AT&T will be able to keep the high-tech promises it has made in its much vaunted ads. If by nothing other than shear force of will-and the billions invested-the major cable, telecommunication, satellite, computer hardware and software companies are pushing us into the so-called interactive age.

In many respects, the interactive market holds the greatest opportunities for synergy. This because is interactive crosses the boundaries of so many current industries. Though the interactive industry is rapidly emerging, there remains numerous problems. For one, there is currently not so much an interactive industry per se, but rather many separate interactive initiatives within numerous and often disparate industries.

Compounding this, or perhaps because of it, is the rampant confusion which persists in some of the most basic terms which define the industry. Much of the vocabulary of interactivity is ill-defined and the news media seems to perpetuate this confusion on a daily basis.

The term "interactive" itself seems to be the chief culprit. Say interactive to one person and they think of CD-ROMs or video games. Say interactive to another person and they think you are talking about 500 channel cable systems with home shopping and movies-on-demand.

Others think of it as an extension of multi-media-which until only a few years ago meant a slide show with more than one projector accompanied by a prerecorded soundtrack. Some have even whimsically suggested the most truly interactive technology has bee n with us for decades, namely the telephone. For that matter, the drive-thru at Taco Bell is a prime example of interactivity.

Another problem with interactivity is the incredible complexity of the technology involved and resulting difficulty of understanding the possibilities, the limitations and the rate at which changes could potentially take place. Again this seems to be the result of the many boundaries which interactivity crosses. While many seem to be well versed in certain areas, there has yet to emerge a proponent who can clearly, realistically and convincingly explain what the future really portends.

One thing, however, is clear. The computer, telecommunication, cable, satellite and entertainment industries are all actively investing vast sums of money and resources developing an interactive future for us. For its part, the entertainment industry se es interactivity as both a new distribution channel for its existing forms of "software" (films, music, etc.), plus a new medium for which to create entirely new forms of entertainment. As one film industry scribe put it, "it's 1903 and 'The Great Train Robbery' hasn't been shot yet." 75

Though large-scale interactive tests are currently being conducted throughout the country by a number of large cable system operators and some of the Baby Bells, much of the early opportunities here amount to enhanced versions of currently available services. For feature films this means a new distribution channel, video-on-demand. Other than spelling the almost certain demise of the videotape rental business, video-on-demand is not particularly compelling.

The real area of interest and opportunity is the burgeoning interactive programming market. These new forms of entertainment, which will not only be distributed through interactive cable, satellite and telephone systems, but also on CD-ROMs and through high-tech arcades such as Sega's, at amusement parks like Universal Studios and through new high-tech theaters like Sony's. Michael Schrager of Sony describes their first interactive film:

"We are currently producing an interactive 20-minute featurette called 'Mr. Payback.' It has 39 junctures where the audience makes a decision by selecting one of three buttons. It's majority rules. It will be distributed in 90 specially adapted Sony theaters." 76

The implication for product placement, however, are numerous. At the most basic level, normal placements can and are being pursued in interactive programming such as video games. Such placements are similar in style to their theatrical counterparts, but with two distinct advantages for the corporate marketers.

First, there is considerably greater control over the actual execution of the placement because of the distinctly different power and control structures in the video game business versus the feature film business.

Second, while a feature film is normally viewed only once or occasionally twice, video games are played repeatedly which results is greater frequency of exposure for the placement being assured. Also, video games are even more narrowly targeted than feature films which allows the corporate marketer to more precisely reach their target market.

The most interesting product placement opportunities within the emerging realm of interactive entertainment will probably go far beyond simple product placement. The very nature of interactive programming means the viewer or audience member interacts in some way with the entertainment. The possibilities for promotions are limitless.

An auto manufacturer recently distributed a free computer game on disk which was included in a computer magazine. The "Star Wars" type game incorporated a series of informational car ads which appeared on the screen when the player reached a new level. Though certainly crude, it certainly illustrates the potential of interactive advertising.

One of the problems with this particular scenario, however, was that the promotion was very intrusive. After the initial novelty wore off, it rapidly became very annoying. One way such promotions might be less intrusive is through a sort of enhanced pro duct placement. A viewer watching a film at home via an interactive medium such as video CD or interactive satellite, cable or video-telephony could hypothetically interact with the film.

This may include the ability to influence the story, but it could also include opportunities for a viewer to find out more information about products which are placement in the film. Say the viewer likes the car the star of the film is driving or, for that matter, the tie he is wearing in a particular scene. The now potential consumer could, using the remote control, mouse or some other device, select the product and immediately receive more information.

Alternatively, they may choose not to interrupt the flow of the film and simply go back to the scene after the film is over using a product or scene indexing feature. The information provided could include an informational commercial for the product, a print ad or even direct access to sales representative. The possibilities seem endless.

Enhanced placements would be particularly useful for products without clearly identifiable logos, such as clothing, furniture or sunglasses. In any case, it would seem the ultimate value of product placement will be realized through such future interactive opportunities.

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Conclusion

THE FUTURE

INCREASING MEDIA BLUR

Over the last decade we have witnessed an increasing blur between entertainment and advertising. Advertisers, reacting to increasing clutter, decreasing effectiveness of traditional advertising and greater competition have experimented with and adopted m any new methods of reaching their consumers, such as direct mail and telemarketing.

They have also created innovative new uses of traditional media. In television, infomercials have evolved from sponsorship by predominantly fly-by-night companies peddling the latest wrinkle cream to image-conscious Fortune 500 companies such as Apple Computer which is proudly promoting its latest Perfoma series of computers.

Also in television, home shopping channels have also advanced from selling little more than cubic zirconium to a broader array of more respectable merchandise with high-profile hosts such as Joan Rivers. In print, there has been substantial growth in the number of single-advertiser sponsored magazines and special editions of exiting publications.

Other new publications such as Entertainment Weekly owe their rapid success to editorial policies which cater to advertisers' needs in innovative ways. The ensuing interactive revolution which is threatening to fundamentally change the structure of traditional media, as well as introduce many new media options, will likely continue to obscure the distinction between entertainment and advertising.

PRODUCT PLACEMENT CHANGES

Product placement itself is another example of the blurring distinction of entertainment and advertising. As interactivity increases the viability and scope of product placement in feature films and in other forms of entertainment, interactive product placement may well become the promotion of choice for corporate marketers. Aside from the changes precipitated by interactivity and other macro-level media developments, numerous other changes will likely occur specifically within the feature film product placement industry.

As the benefits of product placement become better understood and more widely accepted, it is expected that more and more companies will become involved in its use. The resulting increased competition for placements may result in more companies shifting to direct representation, particularly the larger ones with heavy product placement requirements. Also, many of these new companies will be interested in placing a broader range of products than is currently being placed.

In addition to the typical assortment of cars, sodas and airlines, we will likely see more and more non-visually branded consumer products, such as furniture and appliances, as well as more non-consumer products such as medical equipment and heavy machine ry. Corporate marketers placing these industrial products will be drawn by the low-cost and internal marketing benefits, such as employee pride, which can be derived from feature film product placement.

REFINEMENT AND RECOGNITION

Since product placement is still a relatively young industry, many see it refining its practices so as to better serve the needs of it various constituents, i.e. the filmmakers, the corporate marketers and the studio marketing departments. More promotion s-based placements are expected to develop. The overall trend by the studios to develop more and more cross-promotions, which have increased two to three fold in the last few years, increase the pressure for promotion-based placements.

Many feel that accompanying the increased level of promotions will be an expanded emphasis on complete packages being developed and presented to corporate marketers which would include product placement, cross-promotions and licensing and merchandising, covering all phases of distribution, particularly international. The greater global emphasis and increased use of target marketing by most corporate marketers should encourage such complete packaging.

These trends and anticipated changes should thus increase the value and importance of the studios' Production Resources or Product Placement Departments. Many feel that such recognition will logically result in an increased level of influence and a higher level of involvement within the studios system. While these executive will not be green-lighting pictures any time soon, their voices will surely carry the weight deserving their highly value-added efforts. Says Musette Buckley at Warner Bros.:

"The wave of the future is to ensure that production resources remains a very viable and productive department, but with more involvement at a higher level from the very beginning. We can already see this beginning at several studios. We'll s till be heavily involved in cost-reduction, but more placement driven promotions will occur. The potential of product placement will soon be more fully recognized." 77

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RECOMMENDATIONS

As one corporate marketer put it, "all the studios are playing the same game with different rules." 78 The intent of this section is to summarize the current studio practices which are believed to be most viable and to recommend others which should be considered for further development or adoption.

These recommendations are not meant to be trade-offs which benefit merely one side of the industry at the expense of the other, as such efforts are simply short-sighted in their focus. The following recommendations-although aimed at the studios-are there fore intended to maximize the interests of the studios and the corporate marketers alike and thus raise the viability of the entire product placement industry.

ADOPT A LONG-TERM VIEW

Many of the following recommendations are predicated on the adoption of a long-term attitude towards product placement and its related benefits. Many corporations, particularly during the 1980s, have been criticized for making decisions based on factors which have only short-term implications.

An increasing number of corporations have set their sights on the long-term viability of their companies and, as such, their daily decision-making is focused not merely on the next quarter, but the next decade and beyond. Strategic decisions concerning product placement-particularly since feature film product placement is a relationship industry-should therefore embrace a long-term view.

DEVELOP FORMAL MISSION STATEMENTS

A formal mission statement would help to clarify the role and purpose of product placement at each studio. It could serve as a tool for communicating with filmmakers and hopefully incorporate wording which would allay many of their concerns. Likewise, i t would communicate to corporate marketers the perceived purpose and value of their services. Overall, it would allow studio management to understand and fully make use of the opportunities inherent through feature film product placement.

ELIMINATE FEES

Fees are the least relied upon compensation for product placement and their complete elimination would help the industry in several ways. First, it would help to further minimize criticism of product placement. Second, the elimination of fees would help concentrate product placement compensation on cost reduction and promotions-its most valuable benefits.

Third, it would bring the studios and corporate marketers closer together by more closely aligning their interests. Finally, it should help to further minimize the concerns of filmmakers, particularly those who view product placement as little more than the prostitution of their art.

MAKE GREATER USE OF PROMOTIONS-RELATED COMPENSATIONS

Although cost-reduction is an important benefit of product placement, as discussed earlier, promotions offer even greater value to the studios, particularly over the long-term. Further benefits can be realized by increasingly leveraging placements into cross-promotions. Formal mechanisms should be developed and implemented to ensure this occurs.

As an extension of this strategy, product placement should be increasingly used simply to establish relationships with corporate marketers, which can later be lucratively mined to develop future cross-promotion deals. Using this strategy, the focus would thus shift from developing promotions for a film based on a placement in that specific film, to developing promotions based on relationships cultivated through past product placements. Such a strategy would not be used instead of, but in addition to cur rent practices and no doubt is already taking place to some extent.

In addition, attempts should be made to forge ongoing, long-term relationships with corporate marketers to develop placement and promotion deals which span several films over a number of years and serve both general and specialized needs. Next, although it must be done carefully, cross-promotions and placements should be increasingly coordinated and, in some cases, linked.

Lastly, a greater number of complete "corporate opportunity packages" should be developed for corporate marketers which include product placement, cross-promotions, merchandising and licensing pertaining to all phases of distribution, including international.

INSTITUTE DUAL REPORTING AND NEW DEPARTMENT NAME

Since product placement benefits both production and marketing, the reporting should therefore be to both. This would help to ensure the needs of both areas are being met and that both of the key benefits of product placement are being maximized.

The name of department which serves this function should be changed to reflect this dual emphasis and to clarify its purpose. Although "Production Resources" captures part of its importance, it fails to grasp the full meaning of the service which is being performed. Though the name "Production Resources" was likely chosen by most of the studios in order to placate their production executives who were perhaps embarrassed by product placement, the image of product placement has improved considerably over the years.

While an argument could certainly be made for calling the department "Promotions Resources," particularly by those favoring the promotions benefits of product placement, this too would not seem to be the most complete and accurate description. On the other hand, the name "Product Placement" favors neither production nor marketing and its meaning is also widely understood by filmmakers, studio executives, corporate marketers and the press, as well as by advertising, marketing and public relations professionals.

OVERCOME CULTURAL BARRIERS

As previously discussed, many of the problems which occur in the industry are a direct or indirect result of the sometimes major cultural differences between the various industry players, such as the filmmakers, corporate marketers, studio executives, and others. While many of the above recommendations would significantly contribute to a reduction in the number of problems which result from such cultural differences, other methods aimed at minimizing these differences should be developed and employed.

One such method would be to draft a clear and specific set of policies concerning product placement in which both respect for the artistic freedom of the filmmakers and protection of the brand equity of the corporate marketers is guaranteed. Another tact ic might be to launch a publicity campaign which seeks to clarify the role and purpose of product placement and aimed at the various trade publications such as Variety, Marketing News, Advertising Age and others. Such a campaign might be coordinated by E RMA with its various members contributing stories or lobbying the press for coverage.

A FINAL NOTE

Hopefully, the above recommendations will appear to be a logical extension of many current industry practices. Some of the recommendations are, in fact, already being embraced to some extent at a number of the studios. Certainly, additional industry reviews should be conducted which generate new recommendations on a regular basis. Indeed, this document itself will likely be significantly revised in the near future.

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SAMPLE STUDIO PRODUCT PLACEMENT CONTRACT

PRODUCT PLACEMENT AGREEMENT

Dated as of
________________________________

1. Parties
________________________________ ("Studio")
________________________________
________________________________

________________________________ ("Supplier")
________________________________
________________________________

2. Representations and Warranties
Supplier hereby represents and warrants for the benefit of the Studio that Supplier has the right to enter into this agreement; and that with respect to the Placement Company named below (if any), said Placement Company is the authorized agent of Supplier , and all acts, statements, representations, promises, and warranties specified herein are authorized and within the scope of said agency relationship.

3. Subject
Supplier will provide signage, product with labels (collectively "Goods") and payment for placement, if any, which shall be at the Studio's sole discretion in the theatrical motion picture currently entitled "________________________________" ("the Picture").

You have reviewed the relevant scenes of the Picture for which the Goods are intended and are aware of the intended use of the Goods. It is understood and agreed such use may not occur at all, or may vary, in the Studio's sole discretion. It is further understood and agreed that, you will /will not deliver to the Studio a certificate of insurance in accordance with the Standard Terms and Conditions attached hereto and made a part hereof.

4. Grant of Rights
For good and valuable consideration, receipt of which is hereby acknowledged, Supplier hereby grants to the Studio, its successors, licensees and assigns, the non-exclusive and irrevocable right and license to use the Product as set forth in the script pages attached hereto, in the Picture and to exhibit, publicize and otherwise utilize and exploit the Picture containing the Product (and to use the Product as contained in the Picture in trailers and advertising in connection with the Picture) by any and a ll means and methods whether now known or hereafter created or devised, including but not limited to, film of all widths and gauges, tapes, cassettes and discs, and in any and all media, whether now known or hereafter created or devised, including but not limited to, theatrically, non-theatrically, by all forms of television, including but not limited to, free, pay, toll, subscription, cable, satellite television, television devices, audio visual cassettes, cartridges and discs, and to exploit all so-called ancillary and subsidiary rights in the Picture containing the Product.

5. Payment
In the event the Goods are verified to be identifiable in the Picture (according to the exposure criteria specified below), you agree to pay the Studio the total amount of $00, which shall be due and payable no later than the domestic theatrical release print of the Picture. Product Placement fees payable under this agreement will be waived in the event that Supplier enters into meaningful promotional activity with the Studio. You acknowledge and agree that neither the Studio nor anyone on the Studio's behalf has made any warranties, representations, guarantees, or agreements of any kind as to the exposure, (as defined below) if at all, of the Goods in the Picture, and if the exposure does not occur or fails to meet the criteria of identifiability set forth below, the Studio's only obligation shall be to return any sums theretofore paid to the Studio by you pursuant to this Agreement in connection with the placement of Goods in the Picture, and the parties shall be relieved of any further obligations to each other hereunder. The criteria of identifiability is as follows: on-screen, in-focus identification and/or verbal mention of ________________________________.

6. Verification of Exposure
After completion of principal photography and editing of the Picture, if the Goods have been identifiably placed in the Picture, the Studio may, at the Studio's election, provide you with still photographs showing such exposure. The Studio shall determine, in its sole discretion, whether the exposure is "identifiable" as set forth above, and shall inform you of such decision. You shall have the right to advise the Studio within five business days of the Studio's notification of any disagreement with the Studio's decision. In such event, you and the Studio shall use reasonable good faith efforts to reach agreement. Any and all stills and/or footage furnished to you hereunder shall be for the sole purpose of the aforesaid verification and may not be use d by you for any other purpose, nor may you dispose of the same to any third party for any purpose whatsoever, including but not limited, to use in advertising to the trade and/or to the public, point of sale displays, commercial tie-ups, promotional tie- ins, reports and other sales or promotional material. Violation of the aforesaid restriction shall be subject to both legal and equitable remedies, which remedies shall be cumulative, including injunctive relief and punitive damages.

7. Credit
In the event the Goods appear identifiably in the Picture, the Studio will have the right, but not the obligation, to accord you credit in the end titles of the Picture, all aspects of such credit, if any, to be determined by the Studio in its sole discretion.

8. Non-disclosure
All information disclosed to you relating to the characters, themes, plots, story and story elements, designs, effects and special effects, hardware, artwork and visual representations in connection with the development and production of the Picture shall be considered confidential and shall be retained in confidence by you.

STANDARD TERMS & CONDITIONS

1. You represent and warrant that the Goods are merchantable and suitable for their intended use. You shall indemnify, defend and hold harmless the Studio, its parent, affiliated and subsidiary companies, and its officers, directors, agents and employees from and against any claims, actions, damages and costs (including any reasonable attorneys' fees in connection therewith) arising from any defect in any Goods supplied by you and/or any breach of any representation and/or warranty made by you. The Studio shall give you prompt written notice of any claim of which the Studio is advised so as to give you the opportunity to assume the defense thereof. Failure to give notice does not constitute a breach of this Agreement. Notice shall be sent by certified mail to the following address:

___________________________

Settlement by the Studio without your prior written consent shall release you from the indemnity as to the claim or action so settled.

2. You hereby authorize the use of the name and likeness and designs, trademarks, logos and physical characteristics of, the Goods, in the Picture.

3. You are aware that the existence and contents of this Agreement may be revealed to third parties, including without limitation, network executives and government agency officials, and you so consent.

4. The Studio reserves the right to have, but will not intentionally feature, competitive product(s) in the Picture.

5. This Agreement shall be interpreted under the laws of the State of California.

6. Nothing contained herein shall in any way constitute a partnership or joint venture between the parties hereto or be construed to evidence the intention of the parties to constitute such. Neither of the parties hereto shall hold itsel f out contrary to the terms of this provision by advertising or otherwise.

7. If any provision of this Agreement is adjudged void, voidable or illegal, such adjudication shall not affect the remaining provisions hereof.

8. No waiver of any breach of any provision of this Agreement shall be deemed a continuing waiver thereof or a waiver of the breach of any other provision hereof.

9. This Agreement, when signed by the parties, shall constitute the entire understanding of the parties with respect to the subject matter, superseding all prior and/or concurrent representations, promises, understandings, and agreements, oral or in writing, between them with respect thereto; it may not be amended or rescinded except by a writing signed by the parties.

THIS AGREEMENT IS VALID ONLY WHEN SIGNED BY A DULY AUTHORIZED REPRESENTATIVE OF THE STUDIO.

ACCEPTED AND AGREED TO:

THE STUDIO

BY: _________________________ BY: _________________________

ITS: _________________________ ITS: _________________________

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END NOTES

1. Gabler, Neal, An Empire of Their Own, Crown Publishers, 1988, page 10.
2. Karrh, James, "Effects of Brand Placements in Motion Pictures," unpublished paper, 1994, page 1.
3. Interview, Melissa Robinson, Director, Production Resources & Promotions, Paramount Pictures, October 1994.
4. Interview, Anonymous, Studio Executive, October 1994.
5. Interview, Michael Schrager, Director, Production Resources, Sony Pictures, October 1994.
6. Interview, Randy Smith, Executive Director, National Promotions, TriStar Pictures, October 1994.
7. Interview, Musette Buckley, Manager, Production Resources, Warner Bros., October 1994.
8. Interview, Tony Hoffman, Vice President, Product Resources, New Line Cinema, October 1994.
9. Interview, Anonymous, Studio Executive, October 1994.
10. Interview, Melissa Robinson, Director of Production Resources and Promotions at Paramount Pictures, October 1994.
11. Interview, Frank Devaney, Senior Vice President, Product Placement, Rogers & Cowan, October 1994.
12. Interview, Bettina O'Mara, Director, Production Resources, Castle Rock, October 1994.
13. Interview, Anonymous, Studio Executive, October 1994.
14. Interview, Frank Devaney, Senior Vice President, Product Placement, Rogers & Cowan, October 1994.
15. Interview, Dean Ayers, Director, Entertainment Marketing, Anheuser-Busch, October 1994.
16. Interview, Randy Smith, Executive Director, National Promotions, TriStar Pictures, October 1994.
17. Interview, Teri Ward, Norm Marshall & Associates, October 1994.
18. Interview, Dan Hassid, Producer, Cineville, October 1994.
19. Interview, Tony Grana, Director, Production Resources, Universal Pictures, October 1994.
20. Interview, Gary Mezzatesta, President, UPP Entertainment Marketing, October 1994.
21. Interview, Anonymous, Studio Executive, October 1994.
22. Interview, Anonymous, Studio Executive, October 1994.
23. Interview, Tony Grana, Director, Production Resources, Universal Pictures, October 1994.
24. Interview, Tony Hoffman, Vice President, Product Resources, New Line Cinema, October 1994.
25. Interview, Frank Devaney, Senior Vice President, Product Placement, Rogers & Cowan, October 1994.
26. Interview, Dean Ayers, President, Entertainment Resources and Marketing Assoc, October 1994.
27. Interview, Anonymous, Studio Executive, October 1994.
28. Interview, Gary Mezzatesta, President, UPP Entertainment Marketing, October 1994.
29. Interview, Frank Devaney, Senior Vice President, Product Placement, Rogers & Cowan, October 1994.
30. Ibid.
31. Interview, Musette Buckley, Manager, Production Resources, Warner Bros, October 1994.
32. Interview, Tony Grana, Director, Production Resources, Universal Pictures, October 1994.
33. Ibid.
34. Bart, Peter, "Boffo Grosses," Variety, October 10-16, 1994.
35. Interview, Pat Walters, Vice President, Marketing Services, Sony Pictures, March 1994.
36. Interview, Mark Zucker, Senior Vice President, Distribution, Columbia Pictures, October 1994.
37. Interview, Susan Sherman, Director, Product Placement, 20th Century Fox, October 1994.
38. Interview, Michael Schrager, Director, Production Resources, Sony Pictures, October 1994.
39. Interview, Musette Buckley, Manager, Production Resources, Warner Bros, October 1994.
40. Interview, Dan Hassid, Producer, Cineville, October 1994.
41. Interview, Dean Ayers, Director, Entertainment Marketing, Anheuser-Busch, October 1994.
42. Interview, Anonymous, Studio Executive, October 1994.
43. Interview, Melissa Robinson, Director, Production Resources & Promotions, Paramount Pictures, October 1994.
44. Interview, Michael Schrager, Director, Production Resources, Sony Pictures, October 1994.
45. Interview, Frank Devaney, Senior Vice President, Product Placement, Rogers & Cowan, October 1994.
46. Interview, Susan Sherman, Director, Product Placement, 20th Century Fox, October 1994.
47. Interview, Tony Hoffman, Vice President, Product Resources, New Line Cinema, October 1994.
48. Interview, Frank Devaney, Senior Vice President, Product Placement, Rogers & Cowan, October 1994.
49. Interview, Musette Buckley, Manager, Production Resources, Warner Bros, October 1994.
50. Interview, Susan Sherman, Director, Product Placement, 20th Century Fox, October 1994.
51. Interview, Susan Sherman, Director, Product Placement, 20th Century Fox, October 1994.
52. Interview, Tony Grana, Director, Production Resources, Universal Pictures, October 1994.
53. Interview, Randy Smith, Executive Director, National Promotions, TriStar Pictures, October 1994.
54. Interview, Susan Sherman, Director, Product Placement, 20th Century Fox, October 1994.
55. Interview, Tony Grana, Director, Production Resources, Universal Pictures, October 1994.
56. Interview, Susan Sherman, Director, Product Placement, 20th Century Fox, October 1994.
57. Interview, Musette Buckley, Manager, Production Resources, Warner Bros, October 1994.
58. Interview, Randy Smith, Executive Director, National Promotions, TriStar Pictures, October 1994.
59. Interview, Frank Devaney, Senior Vice President, Product Placement, Rogers & Cowan, October 1994.
60. Interview, Anonymous, Studio Executive, October 1994.
61. Interview, Gary Mezzatesta, President, UPP Entertainment Marketing, October 1994.
62. Interview, Dean Ayers, Director, Entertainment Marketing, Anheuser-Busch, October 1994.
63. Interview, Anonymous, Studio Executive, October 1994.
64. Interview, Randy Smith, Executive Director, National Promotions, TriStar Pictures, October 1994.
65. Interview, Dan Hassid, Producer, Cineville, October 1994.
66. Interview, Dean Ayers, Director, Entertainment Marketing, Anheuser-Busch, October 1994.
67. Interview, Anonymous, Studio Executive, October 1994.
68. Interview, Dan Hassid, Producer, Cineville, October 1994.
69. Interview, Anonymous, Studio Executive, October 1994.
70. Interview, Frank Devaney, Senior Vice President, Product Placement, Rogers & Cowan, October 1994.
71. Interview, Gary Mezzatesta, President, UPP Entertainment Marketing, October 1994.
72. Interview, Michael Schrager, Director, Production Resources, Sony Pictures, October 1994.
73. Interview, Dean Ayers, Director, Entertainment Marketing, Anheuser-Busch, October 1994.
74. Interview, Tony Hoffman, Vice President, Product Resources, New Line Cinema, October 1994.
75. Bart, Peter, "Boffo Grosses," Variety, October 10-16, 1994, page 3.
76. Interview, Michael Schrager, Director, Production Resources, Sony Pictures, October 1994.
77. Interview, Musette Buckley, Manager, Production Resources, Warner Bros, October 1994.
78. Anonymous Interview, Corporate Marketer, October 1994.

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BIBLIOGRAPHY

Anonymous, Corporate Marketing Executive, Interview, October 1994.

Anonymous, Studio Executive, Interview, October 1994.

Ayers, Dean, Director, Entertainment Marketing, Anheuser-Busch, Interview, October 1994.

Bart, Peter, "Boffo Grosses," Variety, October 10-16, 1994.

Buckley, Musette, Manager, Production Resources, Warner Bros., Interview, October 1994.

Devaney, Frank, Senior Vice President, Product Placement, Rogers & Cowan, Interview, October 1994.

Gabler, Neal, An Empire of Their Own, Crown Publishers, 1988.

Grana, Tony, Director, Production Resources, Universal Pictures, Interview, October 1994.

Hassid, Dan, Producer/Co-Founder, Cineville, Interview, October 1994.

Hoffman, Tony, Vice President, Product Resources, New Line Cinema, Interview, October 1994.

Karrh, James, "Effects of Brand Placements in Motion Pictures," unpublished paper, 1994.

O'Mara, Bettina, Director, Production Resources, Castle Rock, Interview, October 1994.

Mezzatesta, Gary, President, UPP Entertainment Marketing, Interview, October 1994.

Robinson, Melissa, Director, Production Resources & Promotions, Paramount Pictures, Interview, October 1994.

Schrager, Michael, Director, Production Resources, Sony Pictures, Interview, October 1994.

Smith, Randy, Executive Director, National Promotions, TriStar Pictures, Interview, October 1994.

Walters, Pat, Vice President, Marketing Services, Sony Pictures, Interview, March 1994.

Ward, Teri, Norm Marshall & Associates, Interview, October 1994.

Zucker, Mark, Senior Vice President, Distribution, Columbia Pictures, Interview, October 1994.

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Samuel Turcotte Vita

Samuel Turcotte was born and raised in Miami on January 10. He is the son of Helen Turcotte Davis and Jefferson C. Davis, M.D. After completing a Bachelor of Science in Radio-TV-Film from The University of Texas at Austin, he worked in freelance film production in Miami for a time, then joined the U.S. Air Force where he worked in film and video production at The Air Force Institute of Technology (AFIT) located at Wright Patterson Air Force Base in Dayton, Ohio. During this time, he was awarded the Ai r Force Meritorious Achievement Medal for his part in designing AFIT's new interactive production studio.

After serving his tour of duty in the Air Force, he worked as an independent film producer. His short film "Kata" received the Bronze Medal at the Houston International Film Festival. He then entered The Joint Masters Program in Communication and Business at The University of Texas at Austin. While there, he served as a Teaching Assistant in the Department of Advertising and as President of the University of Texas Advertising Council. He also conceived and managed a two-year marketing campaign-along with producing a promotional film-for the Graduate School of Business, entitled Texas, Not Your Typical MBA, which resulted in a massive amount of positive publicity and helped to return the Texas MBA Program to Business Week's "Top 20."

He received his M.B.A. in Marketing in December 1994 and will receive his M.A. in Communication/Advertising in May 1995. In January 1995 he turned in this paper and was reportedly heading to Hollywood.

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