Examining the Covert Nature of Product Placement: Implications for Public Policy

Abstract

As consumers become better educated and more skeptical of traditional advertising, alternate forms of marketing communication have emerged that aim to influence audiences unobtrusively. One such example is product placement. Product placement has attracted ongoing debate as to whether it is covert, unethical, and influences consumption. The current article examines the nature and practice of product placement in this light. This taxonomy of product placement attributes is based on current marketing practice and examines whether this is, indeed, a covert marketing strategy. Further, it presents a conceptualization of the influence of product placement on consumer welfare. We highlight that the many forms of product placement necessitate independent evaluation to determine ethical and regulatory standards. Operational solutions for developing public policy are offered.

Disclosing Celebrity Endorsement in a Television Program to Mitigate Persuasion: How Disclosure Type and Celebrity Credibility Interact

“…A gullible consumer may believe that a celebrity recommends a product because he/she really is convinced of the quality of the product (Silvera & Austad, 2004). Several scholars warn about persuasion by in-program endorsement without audience awareness and plead for regulation of product appearance in programs (Benjamin, 2005;D'Astous & Chartier, 2000;Hackley, Tiwsakul, & Preuss, 2008;Kuhn et al, 2010;Law & Braun, 2000). This may be disadvantageous for advertisers and marketers because in-program endorsements are presumably most effective when people are not aware of their influence, thus avoiding rebuttal or a negative evaluation of the message (Balasubramanian, Karrh, & Patwardhan, 2006;Law & Braun, 2000;Matthes, Schemer, & Wirth, 2007;Morton & Friedman, 2002).…”

“…Explicitly providing information about the source or intention of the endorsement in a disclosure could help adults to understand this form of advertising (Kuhn et al, 2010). The information in the disclosures in this study will be related to different levels of persuasion knowledge, with the expectation that viewers' understanding may be activated and used in processing the in-program endorsement.…”

“…With in-program endorsement, the distinction between advertising and the program content is not self-evident, nor are the recognition of the source (second level) or insight into the intent of the message (third level). Even if an audience has sophisticated knowledge about media and advertising, endorsement in a television program may not activate this knowledge because it masks the persuasive intent (Kuhn et al, 2010;Nebenzahl & Jaffe, 1998;Wenner, 2004).…”

“…Therefore, it could be assumed that adults have reached the highest level and understand the meaning and purpose of advertising. The question, however, is whether adults also recognize more subtle forms of advertising, like in-program celebrity endorsement (Nairn & Fine, 2008) because these are intended to resemble non-commercial, editorial content (Kuhn et al, 2010;Nebenzahl & Jaffe, 1998). With in-program endorsement, the distinction between advertising and the program content is not self-evident, nor are the recognition of the source (second level) or insight into the intent of the message (third level).…”

“…The increasing use of celebrity endorsement within television programs and movies, has intensified the debate about the fairness of this practice (Kuhn, Hume, & Love, 2010;Wenner, 2004). Because the persuasive message is integrated into the editorial content, the persuasive intent of celebrity endorsement is often unclear.…”