The regulation of product placement in the movie industry

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The regulation of product placement in the movie

industry

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The regulation of product placement in the movie

industry

Militza Koolman

Master Thesis

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This thesis deals with the effects of prior notification about product placement on brand awareness, brand attitude and purchase intention while also looking at the role and effects of placement styles. Product placement on itself is not a new subject in marketing rather it has been in the field for the last 40 years. Product placement was the method for marketers to use once traditional advertising was becoming oversaturated. It proofed to be a successful method to use for brands. Nonetheless, it has become so popular that now it is difficult to separate what is just a movie or rather a movie filled with promoting brands. As the line became blurrier with time, consumer activists and even governments had raised their concerns regarding this issue. The idea was to introduce announce the usage of product placement in movies. One of the ideas was to do this at the beginning of a movie, hence the name prior notification. This prior notification would inform people that the movie that they are about to see contains product placement. In doing so, it would therefore prevent people getting unconsciously persuaded.

Product placement has three different styles. Brands can be placed visually or audibly or a combination of the two. Product placement is not only an advantage for marketers but also for movie makers because brands help bring a story closer to the real world. For example, It helps shaping characters or putting a movie in a certain time period.

Product placement seems to work best when consumers are not aware of it. The introduction of a prior notification might have an effect on consumers seeing that it would actually be telling them that the movie they are about to see contains product placement. The focus in this thesis was about how the prior notification would affect people in comparison when not using a prior notification.

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7 Preface

This thesis marks the end to the chapter of my student life. Sooner than later, the next chapter will start namely, the working life. Working on my thesis has been an interesting learning experience. I chose to do a thesis with a topic that had to do with the entertainment business. It was very important for me to choose a topic which I was really interested in and I was able to do so.

I would like to thank my family for the support and encouragement during this period. I would like to thank my supervisor Ms. Leliveld for her constant support and feedback. Also, I would like to thank my second supervisor Ms. Yi - Chun Ou for her feedback as well.

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8 1. Introduction

Sex and the City Season 5 Episode 4 “Cover Girl”.

Opening-Scene: Carrie Bradshaw narrates the opening scene which shows the character of Charlotte York sitting behind a desk typing on her laptop.

Carrie: Who needs the self help aisle when you can self help yourself to amazon.com and get exactly what you need. Overnight express and shame free! End-Scene: A satisfied Charlotte with her purchase done online at amazon.com.

Product placement is a subject that has been growing in the marketing field for over the last 40 years. The example above shows one of the ways in which product placement is used in TV shows. In this particular episode the character of Charlotte York is worried that she will end up being an old maid and thus secretly consults self help books for advice. However, she is ashamed to buy them out in public and uses amazon.com to order the books. Interesting to note is that thisscene lasts only thirteen seconds yet two products are managed to be placed in it. Paying close attention to the pictures in figure 1 one can see that while amazon.com is the main brand used in the storyline, Apple also appears in the scenes (first left side picture).

Despite the fact that traditional advertising communication had a positive return for shareholders it was losing its effectiveness on consumers (Wiles and Danielova, 2009). Ultimately, consumers were becoming more sophisticated and resistant to the traditional advertising used by firms (Wiles and Danielova, 2009). According to Chan (2012), advertisers saw product placement as a new tactic to increase brand awareness and develop positive relations with consumers. Similarly Wiles and Danielova (2009) mention that firms indeed turned to product placement to reach consumers and enhance the value of their brands. In most academic research either the name “product” or “brand” placement is used since it is widely accepted by scholars and can be used interchangeably (Balasubramanian et al., 2006). In the remaining of this study product placement will be used. One of the definitions of product

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9 placement most used in studies is one that describes it as, incorporating branded products in a program in audio and/or visual form in return for payment (Chan, 2012). In 2000 advertisers were reportedly spending (an estimated) $360 million a year on product placement (McNatt and Oleck, 2000). By 2005 firms spent $722 million on product placement (consisting of costs such as, fees, free products, and promotional support) in movies and were predicted to increase to $1.8 billion by 2010 (Wiles and Danielova, 2009). For example, in the movie Minority Report, firms spent $25 million in order to show their products (Wiles and Danielova, 2009).

Product placement was not able to avoid controversy. According to Delorme and Reid (1999), the extensive use of product placement in the film industry was making movies look like long advertisements. Similarly, Wasko, Philips, and Purdie (1993) also discussed the intensifying commercialization of Hollywood (and this was about 20 years ago). Delorme and Reid (1999) mentioned that consumer advocacy groups believed product placement to be a form of deceptive advertising. What Delorme and Reid (1999) meant was that consumers are unaware of the persuasive intent of product placement that can lead into purchase behavior. Tiwsakul and Hackley (2005) conducted a study focused on the attitudes and recognition of product placement in British television programmes. In that study Tiwsakul and Hackley (2005) concluded that people found it very important to have product placement regulated by the government. However, at the moment movies do not face a law that obligates them to notify about any placed products.

Little is known about the impact of informing consumers about product placement in movies. According to Delorme and Reid (1999), consumer advocacy groups suggested that product placement should be announced prior to the start of a movie or at the exact moment of appearance of a brand. Tiwsakul and Hackley (2005) found out in their study that half of the respondents were of the opinion that product placement should indeed be disclosed at the beginning, during or at the end. However, up until now no exact format has been chosen on how to inform consumers about product placement in movies.

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10 Most research about product placement has focused on the impact it has on brand awareness, attitude, and purchase intention (Wiles and Danielova, 2009). Chan (2012) explains that the effectiveness of product placement is measured in terms of communication effects (brand awareness) and sales effects (purchase intention). There has been a shift from using brand awareness to brand attitude and purchase intention instead in order to measure effectiveness of product placement (Chan, 2012). Nonetheless, brand awareness is still used to measure effectiveness as well. This study will focus on the impact that prior notification of product placement will have on all three of them.

Products can be placed either in audio or visual form or a combination of the two. In the remaining of the report these three forms will be referred to as the product placement style. The product placement style affects the relationship between prior notification and brand awareness, attitude and purchase intention. For example, in Sex and the City often times the character Carrie Bradshaw would be shown working on her Apple laptop. In this case the Apple laptop is shown only visually. Another example is that of the brand Wilson. In the movie Cast Away the character Chuck Nolan interacts quite a lot with the Wilson volleyball. As the character is deserted on an island the volleyball becomes his only companion. The brand in this case appears both audibly and visually. Consumers’ brand awareness, attitude and purchase intention can be affected differently by the prior notification if products are placed either audibly, visually or both.

1.1 Problem Statement

The problem statement will lead as follows:

What is the influence of including a prior notification of product placement in movies on consumers in terms of, brand awareness, brand attitude and purchase intention in comparison to non-prior notification?

In order to answer the problem statement the following specific sub questions will facilitate to do so: 1. How will prior notifications affect consumer’s brand awareness?

2. How will prior notifications affect consumer’s brand attitude? 3. How will prior notification affect consumer’s purchase intention?

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11 1.2 Conceptual Model

The conceptual model below visualizes the problem statement and gives a clearer picture of the situation at hand. The independent variable is the prior notification of product placement. The dependent variables are brand awareness, attitude and purchase intention. The way in which product placement appears in the movie will also influence the relationship between the independent and dependent variables. The moderator is the product placement style (audio, visual, and audio-visual).

1.3 Academic Relevance

Over the last couple of years new technology development in television has had its affect on advertisements of brands. With TV gadgets such as TiVo and Replay consumers can easily skip all the commercials and just enjoy their programs (McNatt and Oleck, 2000). These new TV gadgets have prompted the use of more product placement in television shows and movies (McNatt and Oleck, 2000). Product placement offers several advantages compared to traditional advertising. It has the ability to reach a very well extended audience and its costs are lower compared to traditional advertising (Gregorio and Sung, 2010). Also, Russell and Belch (2005) say that product placement offers high exposure in non-commercial contexts. The issue of zip zapping channels is avoided unlike advertisements on television. Furthermore, they continue by saying that product placement is also used

Prior notification of product

placement in movies

Brand awareness

Product placement style:

Audio Visual Audio – Visual

Brand attitude

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12 for new-product introductions. Such an example is what BMW did with its launch of the Z3 roadster. According to Karrh et al. (2003) the campaign of BMW included exposure in the James Bond movie GoldenEye, in most of the film’s trailer and TV advertisements.

Over the years the use of product placement in movies has developed. Consumer advocacy groups are worried about product placement used by advertisers to persuade consumers unknowingly. There is also concern with regards to the type of products placed, for example, ethically-charged products such as junk food and alcohol. Movies do not have many restrictions in terms of product placement (Chan, 2012). Therefore, prior notification is a central issue to study regarding product placement because it concerns consumer welfare. This study will help shed light on the use of prior notification.

1.4 Managerial Relevance

Chan (2012) says that the effect of prior notification on persuasiveness is still unclear. For marketers it is useful to know what these affects are. One of the best examples of a successful product placement is that of Reese’s Pieces in the movie E.T. (Gregorio & Sung, 2010). Reese’s Pieces was shown in a scene where it was used by a character in the movie to lure an alien. By doing so, sales increased by 65% following Reese’s onscreen appearance after three months of the movie release (Gupta & Lord, 1998). Nowadays marketers have much more pressure to be accountable for marketing expenditures (Wiles and Danielova, 2009). A lot of money is spent on product placement and management would want to make sure that the expenditures are well accounted for. For example, if product placement would still be a useful method for advertisers to use to promote brands. Therefore, advertisers need to know about the possible advantages and disadvantages that prior notification will create for them.

2. Literature Review

2.1 Prior notification of product placement in movies

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13 placement in movies according to Siegel (2004). Both Chan (2012) and Siegel (2004) mention that no results came from the attempts made neither in Congress nor by the European Union to pass such a law.

For a long time the ethics concerning product placement has been questioned. The reason being that product placement is viewed as subliminally persuading consumers (Eisend, 2009). Similarly, Delorme and Reid (1999) discuss product placement to being the same as deceptive advertising. What they mean is that consumers are completely unaware of the persuasive intent of product placement which leads them into purchase behavior. Only recently has it been allowed in the UK to have product placement in TV shows nevertheless, with some restrictions (Chan, 2012). Product placement is not allowed for example on any BBC and children’s programmes to name a few. Besides that, ethically-charged product such as alcohol, cigarettes, and all junk food are not allowed to be placed as mentioned by Chan (2012). Furthermore, Eisend (2009) also points out that culture plays a role concerning product placement. What is considered ethical in one culture is unethical in another one.

2.2 Effects of regulation on product placement

If the directive is approved movies should include prior notification of product placement as part of the regulation. The consequences of this directive might affect the processing of the placed brands by consumers. Whether consumer’s process level is high or low depends on the product placement style chosen. The use of prior notification creates both an advantage and disadvantage.

The advantage for consumers is that prior notification creates awareness about brands that are placed in a movie. According to Petty et al. (1983) elaboration likelihood model, involvement is expected to be higher in this case because of the prior notification presented before the movie. The process level is expected to be higher thus the chance will be greater that consumers are less likely to overlook the placed brands.

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14 then behaviors under high involvement. The awareness that the prior notification brings to consumers can be a cause for them getting annoyed because they immediately connect product placement in the movie as being part of a promotional campaign (Chan, 2012).

Brand Awareness, Attitude and Purchase Intentions

Wiles and Danielova (2009) discuss in their paper how product placement works by comparing it to celebrity endorses. For example, they say that celebrity endorsers are effective because there is a fit between the celebrity and the product. The same can be said about a movie and a placed product in it. According to Agrawal and Kamakura (1995) celebrity endorsers offer many advantages such as making advertisements believable, enhancing recall message, aid in recognition of the brand, create positive attitude towards the brand, and create distinctive personality trait for endorsed brand. An advantage of product placement mentioned by Delorme and Reid (1999) is its ability to demonstrate brand usage in a naturalistic setting. In addition, Russell (2002) mentions the rich symbolic meaning that can be transferred to the placed brand. What he means is that consumptions symbols are used to enrich plots and characters. In this way, Wiles and Danielova (2009) say that consumers are able to connect the movie world to their own world. Thus, product placement is able to make a connection between brand and consumer. Wiles and Danielova (2009) say that it is because of that connection that consumers’ brand awareness, attitude, and purchase intention increase.

Brand awareness has an important effect on consumer choice according to Hoyer and Brown (1990). For example, they conclude that the more is done to increase brand awareness for a particular brand, the greater the chance of increase in brand choice. The prior notification is meant to inform consumers about placed brand. Thus, consumers seeing a prior notification of product placement should be more aware of brands appearing in the movie compared to those who did not. The prior notification makes consumers have a higher involvement (Petty et al., 1983) Therefore the first hypothesis is as follows:

H1: Consumers who see a prior notification of product placement have a greater chance of noticing placed products. Therefore, they will a have higher brand awareness than consumers who did not see a prior notification.

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15 H2: Consumers who see a prior notification of product placement have a greater chance of noticing placed products. Therefore, they will have higher brand attitude than consumers who did not see a prior notification.

H3: Consumers who see a prior notification of product placement have a greater chance of noticing placed products. Therefore, they will have higher purchase intention than consumers who did not see a prior notification.

Product Placement Style

Product placement can be categorized in three different forms, audio, visual and audio-visual (Gupta and Lord, 1998). In this research these three forms will be further referred to as the product placement style. Visual is understood as the product having an appearance on screen and showing its logo (Gupta and Lord, 1998; Russell, 2002). For example, Carrie Bradshaw in Sex and the City, shown working on her Apple laptop. Audio is understood as the brand being mentioned in a dialogue (Russell, 2002). Gupta and Lord (1998) use the example of the movie Wall Street in which Martin Sheen yells to a waitress, “Get this kid a Molson light”. Finally, audio-visual is both mentioning the name of the brand and also showing the brand itself. For example, in the movie “The Help” the character of Minnie gives (her boss) Celia cooking lessons. In one scene she is seen holding a bucket of Crisco while explaining how it is used to cook.

Product placement style plays also an important role because each style has a different influence on people’s memory. From the three types of product placement styles, Russell (2002) mentions that audio is the form which sticks better in the mind of consumers. When something is said out loud it is more meaningful, therefore its process goes more deeply in comparison when presented visually. The assumptions are therefore that audio placement style sticks much better in consumer’s memory compared to visual, but the combination of audio-visual will have a bigger impact. Therefore the following hypotheses are assumed:

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16 H5: Consumers who see a prior notification of product placement have a greater chance of noticing placed products which are in the audio-visual style rather than only audio or visual. Therefore, they will have higher brand attitude than consumers who did not see a prior notification.

H6: Consumers who see a prior notification of product placement have a greater chance of noticing placed products which are in the audio-visual style rather than only audio or visual. Therefore, they will have a higher purchase intention than consumers who did not see a prior notification.

3. Research Design

The next step is to test the hypotheses. In order to do so the effect of the prior notification needs to be observed. This chapter discusses the method in details starting with the experimental design most appropriate and fitting to use. Next the independent and dependent variables are mentioned and how they will be managed in the experiment. As last the procedure is discussed.

3.1 Method

3.1.1 Experimental Design

There are three types of experimental research namely, field, quasi and true experiment. Field and quasi experiments have the advantage in which the experiment is able to take place in the “real world”. Thus people participating in the experiments are in their natural environment and are unaware that they are being observed. There are also disadvantages that present themselves with field and quasi experiments. To begin with both research types offer less control over the research. In addition, the quasi experiment does not make use of random assignment nor manipulations.

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17 Therefore, because of the aforementioned reasons and the time required to realize them neither field nor quasi experiment will be an option.

True experiment

The approach chosen for this research was a true experiment. True experiment provides the advantage of total control over the research. Thus, there is room for manipulation. Russell (2002) also used true experiment in her research. She created and videotaped her own screenplay. By doing so she was able to increase the experimental control. For example, it was possible to strategically place branded products in the screenplay and eliminate contamination by prior exposure (Russell, 2002). For this research however it was not possible to design a similar experiment as done by Russell (2002). It involves a huge amount of work on production of a screenplay only, and the money and time needed to accomplish it all. In addition, for this particular research the manipulation is the prior notification. It is about whether prior notification is/is not included at the beginning of a movie. For this study, a movie that has been already made will be used.

3.1.2 Movie choice

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18 The literature review chapter described three product placement styles namely audio, visual and audio-visual. Using a movie containing all three styles was therefore the objective for this study. Choosing Sex and the City gave the advantage of finding all the placement styles seeing that two movies were made. There was more material to work with meaning, finding scenes in which these product placement styles possibly appeared. To be clear, the idea was not to combine scenes from “Sex and the City, The Movie” and “Sex and the City 2” in order to create one scene for the study.

“Sex and the City, The Movie” and “Sex and the City 2” are both almost 150 minutes in total. It was not possible to let participants for this study see an entire movie because it would take too long for this particular experiment. In addition, it would be difficult to find participants who are willing to volunteer for such a long experiment because it is time consuming. Therefore, the basic idea behind this true experiment was to choose scenes containing all three product placement styles from either “Sex and the City, The Movie” or “Sex and the City 2”. Once more, this depended on which movie offered the best option. A prior notification message was created and included at the beginning of the chosen scene. This approximately will become a short clip of 15 minutes.

3.1.3 The independent variables Prior notification

The directive proposed by the EU was to have movie makers announce the appearance of product placement at the beginning of a movie (Chan, 2012). The prior notification will look similar to the warning message for illegally copying a movie (the anti-piracy warning), as seen on DVD’s (Appendix 1). That message is simple and not overloaded with information. A similar look was created for the prior notification message. A black background was used with white letters for the text (figure 1).

When watching a movie in a theater or on a DVD there are always different messages shown before the movie starts. At the theater for example, messages are shown to remind people to turn off their mobile

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19 phones. Also, at the beginning of a movie there is always a short animated clip shown of the film studio that made the movie. For example, New Line Cinema (Appendix 2) was the film studio behind both Sex and the City movies. All these messages are presented a time frame of less than 60 seconds. As a matter of fact the animated introduction of New Line Cinema lasts 14 seconds. Since the prior notification was just a simple message with no animation it appeared for 7 seconds in the video used in this study. Besides having had the New Line Cinema animated message and the prior notification appear before the movie, there was also a short HBO animated message. HBO was the channel behind Sex and the City. Thus, in total there were three messages shown before the movie clip began.

Product Placement Styles

All product placement styles appearing in the movie needed to be noted down. To have an overview of all the scenes in which products were placed a table was made with three different columns. These columns held the data on the minutes in which product placement appeared, the product placement style which was used, and the product (brand) that was placed (See appendix 3 and 4 for the complete tables of all the data collected from both movies). Product placement goes very deep in Sex and the City. Fashion is a very important attribute to the movies. Only true fashion experts can recognize when which character is wearing designer clothes, shoes, bags or sunglasses without necessarily seeing a logo or name. However, not everyone knows everything in detail about fashion and is able to recognize a bag or a sunglass without a logo or name. Therefore, to keep it simple and realistic only those products which either the logo or name were shown or spoken were listed in the tables.

Table 1 shows the total amount of products placed in both movies according to the placement style. For the simplicity of the tables “Sex and the City, The Movie” was abbreviated to SATC1 and “Sex and the City 2” to SATC2.

Table 1: Sum of products per placement style

Product Placement Style

Movie Audio Visual Audio – Visual

SATC 1 11 49 12

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20 Optional movie scenes

Besides being able to find scenes with all three product placement styles there was another factor to take into account, time. The total length of the video that was used for this study was about 10 minutes long. A shorter clip (e.g., 5 minutes) would have made it almost impossible to find scenes containing all the styles in such a short time. A longer clip (e.g., 15 minutes) would have made it difficult to find enough people to participate as the total experiment (movie and questionnaire) would then take too long. In addition, 15 minutes meant going into the direction of a half hour sitcom, which actually is on average between 20 – 24 minutes (that is minus the advertising on television that in reality makes it seem like lasting 30 minutes). Therefore the total length of the scenes that were chosen was going to be around 10 minutes.

Four criteria were used in order to choose scenes. The first criterion was that the total length of the scenes should be 10 minutes. The second criterion was that all three product placement styles should appear in those 10 minutes. Appendix 3 and 4 show how both movies were divided into blocks of 10 minutes scenes which had all three placement styles in it. Table 2 and 3 show the total amount of usable scenes for both movies based on criteria 1 and 2.

Table 2: SATC1 optional scenes

Product Placement Style Total amount of Products Placed

Audio Visual Audio - Visual

1. Scenes1 4 4 9 16

2. Scenes2 2 4 1 7

3. Scenes3 2 6 2 12

4. Scenes4 1 4 1 5

Table 3: SATC 2 optional scenes

Product Placement Style Total amount of Products Placed

Audio Visual Audio - Visual

1. Scenes1 2 6 1 19

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21 To make a final choice between the scenes criteria 3 and 4 were used. Criterion 3 was based on the fact that the scenes should have a logical beginning and ending (e.g. the video cannot start or end in the middle of a conversation). Criterion 4 was that the products placed in the scenes should have a good variation of product categories. Based on all these four criteria the best scene to use resulted in Scene4 in table 2. Scene4 from SATC1 (table 2) is 10 minutes long and has all three placement styles in it. It has both a logical beginning and ending. At last, there are four different product categories (laptops, coffee, designer handbags, books) based on the products (brands) that appear in the scenes.

1.2 Procedure

To study the research questions, a 2(prior notification: yes vs. no) between-subjects x 3(style: audio vs. visual vs. both) within-subjects mixed factorial design was used. Participants were randomly assigned to either prior notification or no prior notification condition. The product placement style was a within-subjects variable. The three conditions could not be counterbalanced as they were part of the film itself. In that way, there was only 1 clip that needed to be shown containing all three styles of product placement and either had a prior notification or did not. For each group a minimum of 30 participants were required. In total a minimum of 60 participants were needed for the whole study. They were asked to watch the movie-clip, which was about 11 minutes. Afterwards they were told to proceed with the questionnaire that took about 10 minutes to fill in.

The questionnaire

The questionnaire was made in the software program, Qualtrics. It was split up into two parts. The first part of the questionnaire was based on brand awareness, attitude and purchase intentions. For brand awareness participants were first asked an open question on which brands they remembered seeing, if any, in the movie clip. The second question was a multiple choice question where all 4 product categories werepresented, each with 3 different brands, including the one appearing in the movie. For brand attitude they were asked to rate statements (on a 5 point likert scale) on the brands of each product category. For purchase intentions as well they were asked to rate, in this case, 2 statements (also on a 5 point likert scale). The second part of the questionnaire was to test the familiarity of participants with the product categories and the brands (e.g. their involvement with the product categories) but also, their familiarity with the movie.

Manipulation Check

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22 questions was asked. The first was an open question asking participants if they remembered seeing any messages. The second question was a multiple choice asking participants specifically if they remembered seeing a message about product placement.

Participants

Sex and the City was a very popular TV show/movie among women not only in America but also on an International level. The most likely participants for this research were women. However, men also watched Sex and the City (though they might not admit it), so both men and women were approached for this study. It was expected though that most of the participants would be women.

Distribution

Participants were approached mainly through social media. Facebook was used in order to distribute the questionnaire. This had an advantage because it was a very fast and easy manner in which they could be sent to a lot of people. However, not everyone has a Facebook account so the questionnaires were also be sent by email.

4. Results

This section will deal with the results of the data that was accumulated for the study. The first part (Part A) of the results reflects on information about the participants and their familiarity with the product categories, brands and movie that was used for the study. The second part (Part B) of the analysis deals with the results on brand awareness, brand attitude and purchase intentions to tests the hypotheses.

4.1 Part A Participants

A total of 61 people participated in the study. From the 61 participants, female was the largest group, consisting of about 70%. Thus, women were the largest group of participants in this study compared to men. The average age among participants was 33 years.

Sex and the City

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Table 1: Familiarity of Sex and the City

Prior notification

Yes No Total

Have you ever seen Yes

Sex and the City? No

21 23 44

9 8 17

Total 30 31 61

Participants were also asked how much they liked Sex and the City the TV-show and the movie. In order to determine if there was a difference between the likes of the two groups the independent t-test was used. On average, participants who saw the prior notification liked Sex and the City, the TV-show more (M= 4.14, SE= .210) than participants who did not (M= 3.82, SE= .195). This difference is not significant though, t (42) = 1.105, p > .05. Participants have a similar outcome for Sex and the City, the Movies. On average, participants who saw the prior notification liked Sex and the City, the movies more (M= 3.81, SE= .225) than participants who did not (M= 3.65, SE= .214). This difference is not significant though, t (42) = .507, p > .05.

Brand and product experiences

Participants were asked about their experiences with each product category and brands within those categories. First they were asked if they ever bought products from the 4 categories. The first two columns of table 2 show the results. Most participants have bought products out of the 4 categories. However, designer handbag is the only category which is very low in the total amount of percentages. This was not a surprise since this it is rather an expensive product category compared to all the other once. Thus, it was not a product which was expected to be bought very often among participants.

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Table 2: Brand and product experiences

Product category % Yes Brand

_ᵪ

_² df Sig.

Laptop 90.2 Apple

Have you ever bought? Do you currently use/own?

.035 .170 1 1 .851 .680

Coffee “to-go” 82.0 Starbucks

Have you ever bought? Do you currently drink/own?

1.299 .102 1 1 .254 .749

Designer handbag 16.4 Coco Chanel

Louis Vuitton

.079 .023 1.270 .476 1 1 1 1 .778 .880 .260 .490

Book 52.5 The Secret

Have you ever bought? Do you currently read/own?

2.032 .794 1 1 .154 .373

Product category involvement

Participants were asked to rate 4 statements (I am very involved/I use/I know a lot about/I am not interested in) with regards to their involvement for each product category. The statements needed to be tested on their reliability. To determine this, the reliability analysis

was used. Table 3 shows the results. All the product categories scored a α >.7, with the exception of laptop.A possible explanation for this is for example, someone who sits the entire day behind a pc-desk at work might not be very involved with a laptop at home. They have been using a computer the entire day already and might not want to once they get home as well. However, despite the lower scored cronbach’s alpha for laptop it was decided to keep this scale in order to be able to have a better comparison between product categories.

Table 3: Reliability Analysis, product category involvement

Product category α

Laptop .680

Coffee “to-go” .854

Designer handbag .870

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25 0,00 1,00 2,00 3,00 4,00

Laptop Coffee to-go Designer handbag Book M e an s Product category No Yes Prior Notification With the reliability analysis done the next step could be made in order to see if the two groups differed in terms of their involvement. In order to do so, a repeated measured ANOVA was used. Mauchly’s test indicated that the assumption of sphericity was not violated (

ᵪ²

(5) = 1.65, p > .05). There was no need to correct the degrees of freedom. The results showed that the product category involvement of the groups were significant, F (3, 177) = 45.48, p < 0.5.

In figure 1, the means of both groups in terms of their product category involvement are shown. Out of the 4 product categories, laptop is the only one where there is not so much difference between the two groups. Participants in the group that saw the prior notification were more likely to be less involved in coffee “to-go” and book. However, in the case of designer handbag they were more involved then participants who did not see the prior notification.

4.2 Part B

Manipulation check

At the end of the questionnaire participants were specifically asked if they remembered seeing a message about product placement (which was the manipulation check). In order to see if it worked a chi-square test was used (table 4). As can be seen there were unfortunately many people who got this wrong. Six participants said they remembered seeing a message about product placement but in fact they were in the group which was not shown the prior notification. For participants in the group that did have a prior notification at the beginning, 11 of them said that they did not see a message about

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26 product placement. In this case it was possible to explain. They might have forgotten about actually seeing the prior notification since it was not the only thing shown before the clip started (New Line Cinema and HBO animated message were also shown).

Table 4: Manipulation check

Display order of product placement message

SATC + PNmsg SATC – PNmsg Total

Did you see a message Yes about product placement? No

19 6 25

11 25 36

Total 30 31 61

However, in order to proceed with a more accurate data-set the respondents who failed the manipulation check were left out. Leaving out the participants who failed the manipulation check brought the data-set to a total of 44 participants, from which 19 were in the group of the prior notification and correctly rememberd seeing the product placement message. The rest consisted of 25 participants who were in the group without the prior notification and correctly remembered not seeing a product placement message.

The following sections discuss the results on brand awareness, brand attitude and purchase intentions. The tests that were used were all done using both data-sets, meaning the data – set with 61 participants (refered to as no filter), and the other data-set with 44 participants (refered to as filter). Both were used in order to see if there were major differences between the two. However, the data-set that was used to draw all the conclusions from was the filtered one since this had a more accurate version.

Besides the effect of the prior notification on brand awareness and brand attitude it was also important to keep in mind the product placement style. In analyzing the results for both awareness and attitude, the placement style was discussed as well. Table 5 shows an overview of the brands and the placement style each had in the clip. In order to have a quicker overview the following tables contain the abreviations of the placement style next to the brands.

Table 5: Product placement style

Placement Style Brand

Visual (V) Apple

Starbucks Coco Chanel

Audio (A) Louis Vuitton

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27 Brand Awareness

Participants were asked about the brands that they remembered either seeing or hearing in the clip. The chi-square test was used in order to find out if the two groups differed in terms of their brand awareness. Table 6 shows that all the p > .05. Thus, it can be said that there were no significant differences between the two groups on any of the brands.1

So far it is known that the groups did not differ in terms of brand awareness. However, in order to find out which placement style was better remembered by the two groups, the data of the cross tabulation needs

to be used. In table 7, for each brand, the percentage that was recalled according to both groups was computed. To have one percentage for visual the average of the three brands placed visually was calculated. The placement styles are actually the brands. Therefore, according to table 6 which showed no significant differences between the groups means on placement styles as well (all p > .05). Figure 2 shows how each placement style did for both groups. According to figure 2 the data shows that participants who did not see a prior notification were able to better recall the brands on all three types of placement styles. Visual is the placement style with a higher brand awareness followed by audio-visual and audio. For participants who saw the prior notification audio was the placement style with higher brand awareness followed by audio-visual and visual. Comparing both groups it seems that placement style audio is less affected by the prior notification.

1

The same conclusion is drawn from the no filter data-set

Table 6: Brand Awareness

Brand ᵪ² df Sig.

Apple (V) 1.991 1 .158

Starbucks (V) .127 1 .721

Coco Chanel (V) Louis Vuitton (A)

1.159 2.026 1 1 .282 .155

The Secret (AV) .023 1 .879

Table 7 Brand Recall according to product placement style

Brand No Yes

Apple (V) 52.6% 47.4%

Starbucks (V) 56.1% 59.3% 43.9% 40.7%

Coco Chanel (V) 69.2% 30.8%

Louis Vuitton (A) 51.4% 48.6%

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28

Figure 2 Brand awareness on product placement style

Brand Attitude

Participants were asked to rate 4 statements (I like/this makes me happy/ my attitude toward this is positive/ it is very likely that I will recommend to friends) on the brands. Once again, the statements needed to be tested on their reliability, so the reliability analysis was used. As can be seen in table 8, all α >.7.2 With the reliability analysis done the next step could be made.

A repeated measures ANOVA was used in order to find out if there was a difference between the two groups in terms of their brand attitude. Mauchly’s test indicated that the assumption of sphericity was violated (

ᵪ²

(9) = .459, p < .05), therefore the degrees of freedom needed to be corrected using the Huynh – Feldt correction (Ɛ= .783). The results showed that brand attitude was significantly affected by the prior notification (F (3.49, 146.71) = 10.70, p < 0.5). 3

2

3

0 10 20 30 40 50 60

Visual Audio Audio-Visual

B ran d awar e n e ss i n %

Product placement style

No Yes

Prior notification

Table 8: Reliability Analysis, brand attitude

Brand α

Apple (V) .907

Starbucks (V) .942

Coco Chanel (V) .941

Louis Vuitton (A) .767

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29 Figure 3 shows how each group differed per brand on brand attitude. Brand attitude was higher when a prior notification was shown for brands. However, this still does not give a good overview of how the groups differed depending on the placement style used. Since there were 3 brands that were presented visually, the average mean of those brands (Apple, Starbucks, Coco Chanel) were taken to form one average mean for “visual placement”. The means for visual, audio, and audio-visual placement are plotted in figure 4.

Figure 3 Brand attitude per brand

Figure 24 Brand attitude per placement style

As was explained before placement styles were in fact the brands. Thus, the test before showed that placement style were significant (F (3.49, 146.71) = 10.70, p < 0.5). Figure 4 shows that in general when no prior notification is shown, visual is the placement style with a higher brand attitude. The same can be said for visual when prior notification is shown. When comparing both groups visual is the placement style with a higher brand attitude and audio-visual with the lowest. Comparing both groups shows that

0,00 0,50 1,00 1,50 2,00 2,50 3,00 3,50 4,00

Apple Starbucks Coco Chanel Louis Vuitton The Secret

B ran d att itu d e av e rag e m e an Brand No Yes Prior Notification 0,00 0,50 1,00 1,50 2,00 2,50 3,00 3,50 4,00

Visual Audio Audio - Visual

B ran d att id u e av e rag e m e an

Product placement Style

No Yes

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30 the ones who saw a prior notification scored higher on brand attitude than the ones who did not. Placement style audio though does not differ that much between the groups.

Purchase intentions

Participants were asked to rate two statements (I would like to buy/ I intend to buy) about the brands. Once again, the reliability needed to be tested. Table 9 shows that all the Cronbach’s alpha for all brands were larger than .7.4 With the reliability analysis done the next step could be made.

A repeated measures ANOVA was used again in order to find out if there was a difference between the two groups in terms of their purchase intentions. Mauchly’s test indicated that the assumption of sphericity was violated (

ᵪ²

(9) = .251, p < .05), therefore the degrees of freedom needed to be corrected using the Greenhouse-Geisser correction (Ɛ= .747). The results show that the purchase intentions was significantly affected by the prior notification (F (2.99, 125.52) = 10.44, p < 0.5). 5

Figure 35 Purchase intentions per brand

Figure 5 shows how each brand differs for both groups on purchase intentions. In general the groups who saw the prior notification have a much higher purchase intentions compared to the group who did not see the prior notification. However, this still does not give a good overview of how the groups

4

the same conclusion is drawn from the no filter data-set

5

the same conclusion is drawn from the no filter data-set

0,00 1,00 2,00 3,00 4,00

Apple Starbucks Coco Chanel Louis Vuitton The Secret

Pu rc h ase in te n tion aver ag e m e an Brand No Yes Prior Notification

Table 9: Reliability Analysis, purchase intentions

Brand α

Apple (V) .860

Starbucks (V) .955

Coco Chanel (V) .720

Louis Vuitton (A) .731

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31 differed depending on the placement style used. The same was done here as with brand attitude. The average mean of the brands that were placed visually were computed as one. The means for all the three placement styles are plotted in figure 6.

Figure 46 Purchase intentions: placement style

As was explained before placement styles were in fact the brands. Thus, the test before showed that placement styles were significant (F (2.99, 125.52) = 10.44, p < 0.5). Figure 6 shows that participants in the group that saw the prior notification message scored higher on purchase intentions than the other group on all placement styles. The placement style which scores higher on purchase intentions is visual followed by audio and audio-visual as last (for both groups).

Table 16 shows an overview of the hypotheses and the conclusion of the analysis.

Hypotheses Analysis Conclusion

H1: Consumers who see a prior notification of product placement have a greater chance of noticing placed products. Therefore, they will a have higher brand awareness than consumers who did not see a prior notification.

The results show that no differences were found between the two groups.

H2: Consumers who see a prior notification of product placement have a greater chance of noticing placed products. Therefore, they will have higher brand attitude than consumers who did not see a prior notification.

The results show that the groups were significantly different. All the brands scored a higher mean for brand attitude when prior notification was shown.

H3: Consumers who see a prior notification of product placement have a greater chance of noticing placed products. Therefore, they will have higher purchase intention

The results show that the groups were significantly different. All the brands scored a higher mean for purchase intentions when there prior notification was shown.

0,00 0,50 1,00 1,50 2,00 2,50 3,00 3,50 4,00

Visual Audio Audio-Visual

Pu rc h as e in te n tio n s ave rage m e an

Product placement style

No Yes

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32 than consumers who did not see a prior notification.

H4: Consumers who see a prior notification of product placement have a greater chance of noticing placed products which are in the audio-visual style rather than only audio or visual. Therefore, they will have higher brand awareness than consumers who did not see a prior notification.

The results showed that the group who did not see a prior notification had higher brand awareness especially when placed visually compared to the other group. For the group who saw the prior notification, audio-visually placed products had the second best brand awareness result after audibly placed ones. Visually placed products scored the lowest

H5: Consumers who see a prior notification of product placement have a greater chance of noticing placed products which are in the audio-visual style rather than only audio or visual. Therefore, they will have higher brand attitude than consumers who did not see a prior notification.

The results showed that the groups who saw a prior notification scored higher on brand attitude than the other group. However, from the 3 placement styles, audio-visual scored the lowest on brand attitude. Comparing it to the other group though and it scored higher on brand attitude. H6: Consumers who see a prior notification of product

placement have a greater chance of noticing placed products which are in the audio-visual style rather than only audio or visual. Therefore, they will have a higher purchase intention than consumers who did not see a prior notification.

The results show that the groups who saw a prior notification scored higher on purchase intentions that the other group. However, from the 3 placement styles, audio-visual scored the lowest on brand attitude. Comparing it to the group though and it scores higher on purchase intentions.

5. Conclusion and recommendations

In this final section the results of the study are discussed. First, a general discussion on the variables that were the focus in the study and the conclusions pertaining to each one. Furthermore, the limitations that were confronted during this study are also mentioned. Finally, the possibilities of further research are discussed.

General Discussion

This study was about finding out the effect that a prior notification about product placement would have on consumer’s brand awareness, brand attitude and purchase intentions, if it was shown at the beginning of a movie.

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33 The results for the first hypothesis do not confirm that brand awareness is higher when a prior notification is shown. The results revealed that the two groups did not differ on any of the brands that were shown in the movie. Thus, it cannot be said that brand awareness is higher when there is a prior notification. Thus the hypothesis can be dismissed. For brand attitude the results showed that the groups were indeed different. People who were in the group that saw the prior notification scored higher (for all brands) on brand attitude. This is what was hypothesized. Thus, it can be confirmed that brand attitude is higher when prior notification is shown. For purchase intentions a similar pattern is found as with brand attitude. The two groups were different in terms of purchase intentions, and the same as for brand attitude, it is higher (for all brands) among the group that saw the prior notification. Thus, the hypothesis can be confirmed.

This study also focused on the product placement styles that were used in the movie. The question was if the type of product placement style used in movies would have an influence on how prior notifications would affect brand awareness, brand attitude, and purchase intentions?

The results showed that in general the group who did not see the prior notification scored higher on brand awareness than the other group on all three placement styles. Looking specifically at the group who saw the prior notification it can be observed that audio-visual placement style did not score the highest on brand awareness. The hypothesis can therefore be dismissed.

The results indicate that the group who saw the prior notification scored higher on brand attitude on all three placement styles. Audio-visual placement style scored lowest on brand attitude compared to the other two placement styles. When comparing the results of both groups they indicate that the group who did not see the prior notification scored lower on brand attitude when placed audio-visually as well. Thus it cannot be said that audio-visual placement has higher brand attitude (compared to the other placement styles) if a prior notification is included in a movie. Therefore the hypothesis can be dismissed. For purchase intention the same exact pattern is found as for brand attitude. The hypothesis is therefore dismissed.

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34 For brand attitude and purchase intentions there are some effects. Brand attitude and purchase intentions both seem to be higher when there is a prior notification. However, for both the placement style audio-visual does not mean higher brand attitude and purchase intention.

Limitations of study

During the process of this study there were some limitations. First, one of the biggest limitations was not having control over the movie. There was no control over the brands that were used in the movie and the way they were placed. That meant solely depending on brands appearing in the movie and ultimately in the scenes that were chosen to use. For this study it meant that one brand would appear both visually and audio-visually (Louis Vuitton) in the movie clip. The ideal case would have been for it to appear only in one of the styles. Second, the sensation of being as close as possible to “real life” when watching a movie was not possible within this study. Normally when watching a movie you would for the most part probably be at the cinema. This environment was not possible to create for this study. That meant that all 61 participants had a different environment while watching the movie clip for this study. Third, since there was no copyright for the movie, it meant that YouTube would block the movie-clips that were used in the study. In order to upload it to the program that was used to collect the data another server needed to be used to upload the videos (Vimeo). However, for technical reasons, only the link for the video could be uploaded. This resulted in having to ask participants to copy the link in order to watch the video. This meant that it was not controllable whether participants went back to look a second time at the video while answering the questions (of course it is hoped in good faith that participants did not do so). As last, the sample used in the study is not large enough to say that the entire conclusion can be a reflection of the reality.

Future Research

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35 For further research it would be better to create an own “mini-movie” where there would be more control over brands that are used and how they are placed. Creating the cinema environment as close to real life might take a lot of work. However, conducting such a research in a lab where people are invited to see the movie and then fill out the questionnaire could be a way to re-create such an environment. Another way of conducting such a research would be by using again actual movies but then ask people directly about their thoughts on product placement. Thus focus more on the personal opinion of the people with directly on product placement after having watched a movie.

A research could also be done in comparing how people react towards prior notification when it used for ethically charged products (junk food, cigarettes) versus non-ethically charged products. There is not an official form of prior notification created yet. Doing a research on which kind of prior notification works best can also be insightful. For example, should the prior notification just indicate that movies contain product placement or should the brand names be shown as well.

Product placement appears also in video games and in books. However, product placement has also been used lately in musical theatre. Recently though it made headlines because it was used in a children’s musical theatre. A chocolate brand apparently was used in a song as a promotional stunt. There is concern among people as to how far product placement is going. It raised an interesting discussion such as actors being concerned that they are linked to the products that are placed in the TV-shows they are on. This TV-shows that it is a topic that continues to be quite interesting and that it is a grey area as to what the rules are. Where is the line, when it is accepted as a part of the storyline and, when does it cross the line and becomes advertising? Therefore it is an interesting topic to continue to study.

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36 References

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37 Petty, R. E., Cacioppo J. T., & Schumann D. (1983), “Central and Peripheral Routes to Advertising Effectiveness: The Moderating Role of Involvement.” Journal of Consumer Research, Vol. 10, (September), 135-146.

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39 Appendix 1 DVD Anti-piracy warning

Appendix 2 New Line Cinema animated message

Appendix 3 Records Product Placement Style SATC 1

Sex & The City 1 (SATC 1)

Minutes

Product Placement Style

Audio Visual Audio – Visual Product Placed

1) 01.00 X Coco Chanel

2) 01.02 X Christian Dior

5) 1.46 X Dior / Gucci / Manolo Blahnik

6) 2.50 X Apple

7) 04.56 – 04.58 X Apple

8) 15.00 – 16.41 X Coco Channel

9) 15.04 X Entertainment Weekly / TV Guide

10) 15.40 X Dianne Von Furstenberg

11) 15.50 X American Airlines / Sky Vodka /

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40 12) 16.28 X Starbucks 13) 18.07 X Manolo Blahnik 14) 18.26 X Vogue 15) 18.30 X Vogue 16) 19.00 – 19.05 X Vogue 17) 19.44 X Vera Wang 18) 20.01 X Carolina Herrera

19) 20.17 X BlackBerry / Vogue / Sprint

20) 20.22 – 20.30 X Christian Lacroix 21) 20.28 X Louis Vuitton 22) 20.33 X Lanvin 23) 20.38 X Christian Dior 24) 20.48 X Oscar de La Renta 25) 20.56 X Vivienne Westwood 26) 21.24 X Vivienne Westwood

27) 22.17 – 23.57 X Love Letters of Great men

28) 24.05 – 24.08 X Wuthering Heights / Love Story

29) 30.59 – 31.59 X Manolo Blahnik

30) 32.44 – 34.48 X Moët & Chandon

31) 35.33 – 35.55 X Apple 32) 48.06 X BlackBerry 33) 51.32 X Apple 34) 53.39 – 55.03 X Mercedes / Lincoln 35) 01.04.00 X Prada 36) 01.07.00 X Dell / Apple 37) 01.08.00 –01.09.00 X Adidas / Nike 38) 01.10.53 –01.12.41 X Starbucks 39) 01.11.00 X Louis Vuitton 40) 41) 01.12.36 X Netflix

42) 01.13.30 X New York Magazine

43) 01.17.24 –01.18.34 X Apple 44) 01.19.56 –01.20.00 X Vogue ** 45) 01.19.59 X L’Oreal ** 46) 01.22.14 X Vogue 47) 01.22.42 X Starbucks 48) 01.23.03 X Chanel 49) 01.23.07 X Sprint 50) 01.23.11 X GLG / Sprint 51) 01.25.01 X Escada

52) 01.25.48 X Gucci / Chanel / Prada / Versace /

Mercedes

53) 01.31.31 X Louis Vuitton

The regulation of product placement in the movie industry

The regulation of product placement in the movie

industry

The regulation of product placement in the movie

industry

Militza Koolman

Master Thesis

Table of Contents

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