Stella So Lai-Man, Susanna Kwok Wai-Yee

2008 Oxford Business &Economics Conference Program ISBN : 978-0-9742114-7-3

Predicting the effectiveness of product placement: a study on the execution strategy

and impacts on hierarch of effects

Stella So Lai-man,

Susanna Kwok Wai-yee

Department of Marketing

The Chinese University of Hong Kong

Abstract

The rapid increase in the volume and variety of product placement approaches

nowadays has marked the importance of product placement techniques when put into

practice. This paper reports the different categories of product placements techniques known

as implicit, explicit, integrated and non-integrated product placements in the context of TV

soap opera programmes in Hong Kong. Furthermore, this study examines the hierarchy of

effects of the different categories of product placement and suggests important implications

for promotional practice and future research.

Introduction

As the consumer market has becoming more fragmented, marketers in recent decade

turned to a variety of communication channels in their efforts to reach customers. One of the

emerging channels that have been exploited frequently in recent years is product placement.

Product placement is not a new concept in the field of promotion. Schudson (1984)

June 22-24, 2008Oxford, UK

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describes the receptivity of Hollywood to influence attempts by cigarette firms in 1920s as a

results from actors and actresses smoking in the movies. In recent years, product placement

has been more organized to enhance product communications and which attracted the

attention from academics (Babin and Carder, 1996; DeLorme and Reid, 1999; Gould, Gupta,

and Grabner-Krauter, 2000; Gupta and Gould, 1997; Karrh, 1998; Nebenzahl and Secunda,

1993; Ong and Meri, 1994).

Product placement has been defined as “a paid product message aimed at influence

movie or TV audiences via the planned and unobtrusive entry of a branded product into the

movie or TV programme” (Balasubramanian, 1994). There are several key advantages of

product placement, which ranges from cost-effectiveness to positive audience perception and

brand association (Delorme & Reid, 1999; Gould, Gupta, & Grabner-Krauter, 2000).

Comparing with traditional advertising messages, the product placement sponsor’s identity is

kept hidden and this type of hybrid messages enable the sponsor to control the message

content, and in the meantime disguise the commercial origins and appear believable. In

addition, brand placements often involve an implicit endorsement by the celebrity using the

brand which would have influences on attitudes toward the brand (Avery & Ferraro, 2000),

such as the influence of James Bond on BMW and Spider-Man on Dr.Pepper.

Effectiveness of Product Placement

Most of the past research studies of product placement attempt to measure the


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effectiveness, especially at effects on brand recall, recognition, and attitudes (Babin and

Carder 1996; Gupta, Balasubramanian and Klassen 2000; Gupta and Lord 1998; Karrh 1994;

Ong and Meri 1994; Vollmers and Mizerski 1994). Overall speaking, results from the past

research found respondents to have positive view towards product placement in terms of

higher recall/ recognition, positive attitudes and preference ( D’Astous & Chartier, 2000;

Karrh 1994; Saberwahl et al. 1994; DeLorme et al. 1994 and Nebenzahl & Secunda 1993;

Bhatnagar, Aksoy, & Malkoc 2002). However, some studies on the effects of product

placement yielded mixed results with respect to the recall or recognition of brands placed.

Research studies found that recall of placed brands was weak and perceptions differ by

product class (Ong and Meri, 1994; Gupta and Gould, 1997). This has to do with the ethical

concerns about product placements as well as concerns about specific products such as

alcohol, guns and tobacco. Furthermore, according to Ong & Meri’s study in 1994, 77% of

viewers recalled seeing Coke while watching the movie Falling Down, but only 18%

recalled seeing Hamm’s Beer in the movie. The mixed results are due to the failure to

recognize the multidimensional nature of product placement, such as the effectiveness of

product placement of different modes (visual, audio) (Gupta and Lord 1998); the

effectiveness of product placement of the type of placement (prop or more integral to the

story) (Brennen, Dubas, and Babin, 1999); the effectiveness as a function of the nature of

measurements (explicit or implicit) (Law and Braun, 2000; Alain d’Astous and Nathalie


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Seguin 1999; Tiwsakul, Hackley & Szmigin 2005); the ethical concerns of product

placements ( Gupta and Gould 1997) etc.

According to a recent research work, product placement strategies can be classified into

three main types: implicit product placement, integrated explicit product placement and non-

integrated explicit product placement (Tiwsakul, Hackley & Szmigin 2005). In the study,

implicit product placement refers to the placement of a branded product within a television

programme without formally expressed. These products do not play an active role in the

programme and often seen on shelf at the background. On the other hand, a branded product

that is formally expressed within a television programme is defined as an integrated explicit

product placement which plays an active role, e.g. the actors or actresses consuming the

products. Non-integrated explicit product placement means that a branded product which is

formally expressed (the sponsor’s name is presented) but it is not integrated within the

contents of the programme. Interestingly, results indicated that the implicit product

placement gets the most negative consumer evaluation, in other words, consumers prefer the

more explicit product placement. The implicit placement might be perceived as less ethical

because of the association of subliminal effects.

The level of integration of a brand into the editorial content of a program has significant

effects on brand image and effectiveness. The ways that product placement are conveyed

also has a crucial effect on the consumers as people learned through “formed associations”.


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Bandura (1977) suggested that product demonstrations in product placements help people to

learn how to use products quickly. Consumers shape self-relevant information through an

“association principle” linking their own self concept and identity with the desirable images

in the programme. The viewer will then establish association with the personality in the

programme, and then the brand. As a result, consumers will perceive the demonstrated

brands or products as more natural than those direct and manipulative selling messages. A

transformational linkage is then developed between the programmes or movies and the

product placed (Delmore, Reid and Zimmer 1994; Russell 1998). Ultimately, this will

increase the adoption likelihood for placed products and services. Affective reactions to

marketing stimuli are important to our understanding of consumers’ attitudes when doing

advertising or promotion, and therefore, in this study we are attempting to investigate the

effects on consumers’ attitudes and behaviour in relations to exposures of explicit and

integrated versus implicit and non-integrated stimuli. In addition, we will also measure the

relationship between consumers’ attitudes and perceived value toward product placement

and the hierarchy of effects (cognitions, affection and purchase intention) on the brand

placed.

Outcome variables of product placement

Past literature of product placement is relatively sparse; and most studies focus on the


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mental stages of consumers, such as awareness/understanding, interest/liking, and purchase

intention (Barry 1987; Barry and Howard 1990). In a model developed by Balasubramanian,

Karrh and Patwardhan (2006), the outcomes discussed product placement literature can be

divided into cognitive, affective and conative classes.

(a) Cognitive outcome

So far, most placement studies are preoccupied with cognitive effects which measure

advertising effectiveness, such as recognition, salience, or recall. Comparing to

advertisement, placements are better integrated with editorial content than ads and the

impact of program-induced mood on message processing depends on the valence of mood

and the degree to which the placement is congruent with editorial content (Aylesworth and

MacKenzie 1998). Therefore, the cognitive outcomes for a brand in a product placement

would be more effective if the placements are congruent and integrated to the editorial.

However, studies show that placements only generate short-term memory effects that

consumers are unable to retain the brand memory for long term (Babin and Carder 1996;

Baker and Crawford 1995; Gupta and Lord 1998; Johnstone and Dodd2000; Karrh 1994;

Nelson 2002; Sabherwal, Pokrywczynski, and Griffin 1994). Studies have found that

viewers may retain long term memories of certain placements, but only for those placements

that prompted more conscious processing during exposure (Krugman 1965; Synott 1991;

DeLorme and Reid 1999). Therefore, cognitive outcomes are more appropriate for


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placements that elicit moderate to high levels of conscious processing. In other words,

placements messages which are subliminal and prompt unconscious processing are not

effective in influencing consumers’ cognitive response. This argument is in line with the

past research that subliminal embeds do not influence measures of cognitive processing

(Aylesworth, Goodstein and Kalra 1999). Therefore, we predict the cognitive response is not

positively related to non-integrated product placements with subliminal messages.

Hypotheses One

H1: The effect on cognition is higher when product placement (pp) is integrated and

explicit than when pp is non-integrated and implicit

(b) Affective outcome

Advertising professionals are not just interested in the cognitive responses, traditional

measures of advertising effectiveness, there are increasing number of studies focusing on the

affective responses or feelings generated from advertising or product placements

(Aylesworth, Goodstein and Kalra 1999). These affective reactions or feelings not just

influencing attitudes toward advertisements, but also have direct impact on brand

perceptions. Many of these research work suggested that subliminal messages have effects

on affective reactions to the message (Moore 1982; Key 1973; Edwards 1990; Edell and

Burke 1987); low to moderate levels of conscious processing also produce impact of a

placement on brand attitudes (MacInnis and Jaworski 1989; Alba and Hutchison 1987;

Russell (2002)). An interesting research finding argued that brand memory and brand image


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are not related, i.e. brand image becomes more positive regardless of viewers’ memory of the

brand placements. It is further pointed out that the integration of a brand into the editorial

content of a programme has a significant effect on brand image (Reijmersdal, Neijens and

Smit 2007). People tend to develop affective reactions toward the product and brands in

moods and feelings as the more they are exposed to the brand placed. In this study, we

predict the affective response is positively related to integrated product placements with

explicit messages.

Hypothesis Two

H2: The effect on affection is higher when pp is integrated and explicit than when pp is

non-integrated and implicit.

(c) Conative outcome

Despite the evidence that subliminal embedded messages may affect feelings and affective

reactions generated by product placements, there is no convincing evidence showing that

subliminal messages affect behaviour which is the ultimate goal of advertising (Moore 1982;

Trappey 1996; Aylesworth, Goodstein and Kalra 1999). Purchasing behaviour is considered

to be too complex which involves purchase intentions and product choice that subliminal

messages may not be effective (Caccavale, Wanty, and Edell 1982; Moore 1982, Trappey

1996). Therefore, we predict the conative response is not positively related to non-integrated

product placements with implicit messages.

Hypothesis Three


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H3: The effect on purchase intention is higher when pp is integrated and explicit than

when pp is non-integrated and implicit

Attitudes and perceptions toward placements

The volume and sophistication of product placements are growing impressively and

rapidly. Studies have found that product placements receive more acceptability, higher

evaluations and affective outcomes than advertising as placements are perceived to be less

intrusive (Gupta & Reid 1997; Nebenzhal & Secunda 1993; Paradun & McKee 1996;

Hackley 2003; Karrh, McKee & Pardun 2003). Attitudes toward placements, i.e. the

acceptability, involvements and perceptions of audiences, are important influential elements

for the effectiveness of placements. However, there is a lack of literature on the attitudes

towards product placement and its effectiveness. Most of the past research studies on the

effectiveness of product placement attitudes focused on the ethical acceptability (Nebenzahl

and Secunda 1993); gender influences (Gould, Gupta, and Grabner-Krauter 2000; Gupta and

Gould 1997; McKechnie and Zhou 2003); cultural influences (Karrh, Frith, and Callison

2001; McKechnie and Zhou 2003) and viewers’ involvement with the programme

(Bhatnagar, Aksoy, and Malkoc 2004). Only a few research studies have examined the

effects of attitudes and perceptions toward product placements (Morton and Friedman,

2002). Therefore, in this study we will measure correlations between the attitudes and the

hierarchy of effects, i.e. the effects on cognition, affections and intention to purchase. A


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research study conducted by Polly and Mittal (1993) investigated the overall global attitudes

toward advertising and had discovered the attitudes were depicted as a function of a series of

beliefs reflecting the effects of seven factors (three personal factors and four societal

factors). Personal factors include product information, social role and image, and

hedonic/pleasure while the societal effects include good for economy, materialism, value

corruption, and falsity/ no sense. In this study, we will modify and simplify the Polly and

Mittal model to develop a 5 factors model in explaining the attitudes and perceptions toward

product placements. The five factors of consumer attitudes and perceptions are:

1. product placements are entertaining

2. product placements are acceptable

3. product placements are credible

4. product placements are informative

5. product placements give brand confidence

We believe that consumers who rank high in these five factors of attitudes and

perception will result in higher product placements hierarchy-of-effects (HoE). Therefore,

we predict that:

Hypothesis Four

H4a: Positive attitudes toward product placement will result in greater understanding of

the product placed


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H4b: Positive attitudes toward product placement will result in greater affection for the

product placed

H4c: Positive attitudes toward product placement will result in higher purchase

intention of the product placed.

Methodology

(a) experimental design

A 20-minutes video tape featuring two Chinese TV soap operas with two different product

placement clips and regular commercials are recorded. In order to avoid subjects who may

have been suspicious of the true purpose of the experiment and biased the results, we have

inserted regular commercials in-between the clips of product placement. A famous actor and

a famous actress were featured in the two product placement clips. The two product

placement clips are

1) soya sauce – implicit, non-integrated execution

2) 3G mobile phone (3G) – explicit, integrated execution

Prior to the experiment and survey, a pretest was conducted. A total of 37 respondents were

selected to view the clips and answer a well-constructed questionnaire. In addition, a

manipulative test was also conducted to ensure that no biased responses caused by celebrity

preference. From the results, it is clear that there is no significant difference between the

preferences of the two celebrities (Actress Sit and Actor Fong) and which confirmed that the

celebrity effects would not affect the subjects’ opinions in the experiment (Table 1).


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Table 1: Manipulative Test on Celebrity Difference

Mean S.D. t Sig.

Overall preference towards the Sit 0.00 1.00

0.00 0.857actor/actress Fong 0.00 1.00

(b) sample

A good cross section of 125 subjects, aged from 18 to 55 from the population is invited to

view the tape in a classroom setting without being informed of the research objectives. After

viewing the tape, participants are then asked to answer a well-constructed questionnaire that

is distributed to them. The questionnaire is organized around the hierarchy-of-effects model

of three broad categories: cognition (recall); affect (attitudes); and conation (purchase

intention) on the product placement clips. Participants are also asked on their general

attitudes towards product placement developed based on the “5-Factor model”.

(c) questionnaire design

The questionnaire is divided into three different sections. Section I is product placement

specific questions, first on soya sauce and then on 3G, with 5-point scale with “5” for

strongly agree and “1” for strongly disagree, asking participants whether the product

placement clip provides them with information and increase their product knowledge, helps

to generate positive affection on the related brand, and intensifies their purchase intention.

Section II is also 5-point scale questions on general attitudes towards product placement


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developed based on the “5-Factor model”, including ‘entertaining’, ‘acceptable’, ‘credible’,

‘informative’ and ‘develop brand confidence’. Section III is demographic questions on

gender, age and monthly personal income.

Test Results

The research data indicates that the execution style has tremendous impact on product

placement recall rate. For non-integrated and implicit execution (soya sauce), the recall rate is

relatively low, only 35 out of 125 respondents (28%) reported that they have seen the product

in the tape. Whereas, 88 out of 125 respondents (70%) reported that they have seen the mobile

phone that is explicitly and integrated in the soap opera with the celebrity using it.

Based on respondents who reported to have recalled both soya sauce and 3G product

placements in the video clip (N=35), Table 2 indicates that “explicit/integrated execution”

can achieve greater influence and significant difference on the viewers all along the

hierarchy-of-effects, for cognition (t = -4.77, p<0.01), for affection (t = -5.11, p<0.01), and

for conative (t = -3.82, p<0.01). Hence, hypotheses one to three are supported. However, the

effects on respondents wear down gradually from cognition to conation, the result is

consistent will previous findings

Table 2: Hierarchy-of-effects (N=35)

Mean t

Understand

2.49

-4.77***


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Implicit/non-integrated execution (soya sauce)

Explicit/integrated execution (3G)

3.34

Positive Attitude



2.23

3.20

-5.11***

Purchase Intention



2.40

3.03

-3.82***

*p<.10; **p<.05; ***p<.01

Previous studies rarely correlate respondents’ attitude towards product placement as a

predictor, execution style with results based on hierarchy-of-effects. In this study, we

hypothesize that those with positive attitudes towards product placement as a promotion tool

based on the “5-factor model” generate greater understanding, affection and higher purchase

intention. The results show that even people exhibit the same kind of attitude towards

product placement on the five different dimensions, namely entertaining, informative,

credibility, acceptance and brand confidence, their responses are still highly associated and

affected by execution style. A regression analysis was employed to test the hypotheses 4a, 4b

and 4c with the product placements HoE as the dependent variables and the 5 factors of

consumer attitudes ( entertaining, acceptable, credible, informative and brand confident)

toward product placements as independent variables. Table 3 summarizes that for explicit


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and integrated execution (F varied from 4.6 for cognition outcome, 3.7 for affection outcome

to 3.7 for conative outcome, all significant at 0.01 level), as for implicit/non-integrated

execution (F varied from 2.33 for cognition, 0.88 for affection and 1.02 for conative, only

cognition is significant at 0.10 level).

Conclusively, hypothesis 4a to 4c can only be partially supported as explicit and

integrated execution manages to generate more predictive results than implicit and non-

integrated execution in spite of people’s general attitudes towards product placement.


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Table 3: “5-factors Model” correlates with HoE

Outcome Explicit/Integrated

3G

Implicit/Non-integrated

Soya Sauce

R² F R² F

Cognition 0.21 4.6*** 0.23 2.33*

Affection 0.17 3.7*** 0.10 0.88

Conative 0.17 3.7*** 0.11 1.02

*p<.10; **p<.05; ***p<.01

Discussion and conclusion

The current study examines the effect of product placement on people’s hierarchy-of-

effect, namely cognitive, affective and conative outcomes. The results indicated that most

crucial factor for product placement effectiveness depends on the execution styles, explicit

and integrated, managed to be more effective and influential on people’s responses. The ‘5-

factor model’ on people’s general attitudes towards product placement, however, cannot

significantly predict a correlation with the hierarchy-of-effect in this study. As an exploratory

study it is interesting to note that external factor such as promotion execution style is more

predictive than the internal factor such as general attitudes towards product placement

(Figure 1), more in-depth study should be conducted on this aspect.


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Figure 1: 5-Factor Model as predictors for Hierarchy-of-effects

Predictors Execution Style Results

(Hierarchy-of-

effects)

Entertaining

Credible

Implicit/Non-integrated

(√) Cognition

(X) Affection

(X) Conative

Informative

Acceptable

Develop brand

Confidence

Explicit/Integrated (√) Cognition

(√) Affection

(√) Conative

However, the number of respondents who managed to recall both implicit and explicit

execution is relatively small (N=35) in this study, a larger valid sample size definitely helps

to portray a more concrete relationships in-between. Further, people’s product knowledge

and involvement for individual product is not considered in this study, both can be important

independent variables that, in turn, affect the hierarchy-of- effects. With limited promotion

budget and the inclination of using product placement to replace advertising, it is also

important to investigate people’s level of skepticism on advertising or product placement and

the outcome effectiveness. Lastly, the difference and similarity in-between western and

eastern culture on the ‘5-factor model’ correlated with the ‘hierarchy-of-effect’ should also


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