How AI could revolutionise product placement
Feature
Streaming services Peacock and Amazon are developing bespoke virtual product placement solutions. The AI-driven technology could create new ways to monetise both new and library content.
Last year, both NBC streaming service Peacock and Amazon’s Prime Video announced their own versions of “virtual product placement” solutions (called In-Scene Ads and Virtual Product Placement, respectively).
The AI-driven technology allows ads — in the form of banners or product placement — to be inserted virtually and post-production.
While, the technology has already been in place to swap out elements of video for different international markets, for example, there is now also the potential to monetise library content.
Think virtually inserting a cola bottle on a table in a scene from the movie Goodfellas. According to Mirriad — a leading provider of the virtual product placement solution — could even create inventory within an subscription video-on-demand (SVOD) environment.
Mark Melvin, general manager, Americas, for Mirriad, says: “There are a lot of consumers out there who refuse to watch ads and will avoid them at any cost. Moving forward programmers might find it difficult striking the right balance of price point versus viewer experience.”
Product placement has always been seen as an effective advertising format, as well as an important way of monetising content. According to surveys conducted by data and insights company Advertiser Perceptions, just over a third (37%) of advertisers in 2021 reported they spent more of their budgets on in-program integrations compared to the previous year, while 40% planned to further increase their investment in 2022. Two in three video advertisers report incorporating in-program branding in their media planning.
But virtual product placement allows SVOD content to be monetised through a non-obstructive form of advertising, Melvin adds. Moreover, he believes viewers will accept in-content ads within SVOD content, citing Netflix’s Stranger Things as an example of a series with traditional product placement offered in the streaming platform’s ad-free tier.
But a key question surrounding the technology is how to ensure it won’t negatively impact viewing experiences.
Jenny Burke, executive vice-president, Advertising Strategy, Advertising and Partnerships at NBCUniversal, insists that the impact of in-scene ads is positive — for both the viewer and the marketer — when the story and viewing experience is put first.
“The brand must make sense with the content at hand, and one of the core principles of the product is that placements are contextually neutral — complementing the scene without feeling out of place,” Burke says. “We work very closely with our production team and our contextual targeting technology to ensure the In-Scene Ad organically fits within the storyline and the environment.”
In addition to contextual targeting, placement, Burke says Peacock will leverage its first party data insights through NBCUnified to help insert different brands based on who is watching at that moment. Mirriad also has plans to incorporate targeting capabilities and become fully programmatic.
Effectiveness and viewer attitudes
Available research suggests viewers significantly prefer in-content ads over traditional ad spots. According to a study conducted by Kantar, which looks at attitudes towards Mirriad’s in-content ads, viewers are seven times more likely to prefer in-content ads over regular TV spots. Additionally, four in five viewers (79%) embrace in-content ads as a format.
Kantar also explores the effectiveness of in-content ads and finds that, when combined with TV spots, in-content ads increase ad awareness from 68% to 78%, and consumption of the advertised product from 34% to 56%. Favourability also increases by five percentage points, as well as brand awareness by two points.
The impact on those exposed to in-content ads when compared to viewers who were not exposed was also significant. Brand awareness experienced an uplift of 18 percentage points (from 36% to 52%) while ad awareness rose by 25 points (from 26% to 51%). Favourability and consideration also increased by six points and nine points, respectively.
The numbers for Amazon’s Virtual Product Placement solution are also looking promising. Last year, the Mars-owned chocolate brand M&Ms executed a campaign across five episodes of Bosch and Making the Cut on Prime Video that featured the packaging of their Fudge Brownie flavour. A brand uplift study conducted by Kantar found a 6.9% lift in brand favourability, 3.3-times more than Kantar-measured digital campaigns for FMCG advertisers. In addition, the campaign resulted in a 14.7% lift in purchase intent, 8.2x over Kantar-measured CPG digital campaigns.
Kantar also found that 99% of viewers that participated in the studies self-reported a neutral or positive viewing experience during shows that contained Amazon Virtual Product Placement ads.
Burke adds that, in the future, Peacock would look to integrate its commerce technology into In-Scene Ads, allowing the company to reach consumers across the full purchase funnel.
Product placement might be less intrusive when virtual
Melvin, meanwhile, argues virtual product placement is also less intrusive on the production process as compared to traditional product placement. He explains: “A director might want to shoot a scene a certain way. But then now they’ve got a brand on set and they’ve got people telling them what to do and that’s probably more intrusive than what we’re doing.
“A soda can or a bag of chips or a billboard on the street doesn’t detract from the artistic value of a film. They’re actually things that people see in everyday life and we know that when someone sees a branded product in a show versus an unbranded bottle, the viewer actually feels that it’s more authentic.”
However, Colin Dixon, chief analyst at nScreen Media, believes virtual product placement could FAST and ad-funded VOD (AVOD) services avoid the temptation of increasing ad loads, by creating new inventory within the content. He warns that viewers may start using DVR technology or switching services if FAST services increase ads loads.
One concern he raises is the possibility that viewers will find targeted ads within content more unsettling than in regular ad spots. He says: “We’re already being pursued by ads. You do a search and then you start seeing ads for it. If that practice trickles into the content that we watch and is done in real-time. Then that could be really really creepy and and pretty unavoidable if it’s in a show that you really like.”