Brand Loyalty: Product Placement and the Rise in Piracy

The process of marking to moviegoers has been apart of the film industry for several decades with both parties involved benefitting from product placements and promotional tie ins. The marketing strategy of product placement is when a there is an exchange of finances for a consumer good to be placed in a film for a given set of time. Promotional tie ins are when films and consumer goods companies join together to advertise their film and the product through advertising that isn’t solely within the narrative of the film.

This post will speak towards the ingenuity in which consumer good companies have carefully constructed their marketing techniques to produce life long consumers and how they may have to shift their marketing due to technological changes brought about by piracy. In a study of the market share of moviegoers in 2013, the MPAA found that the percent of the population of frequent movie goers in 2013 rose from 15% of 12-17 year olds to 20% for 18-24 to 23% for 25-39 and then drops to 9% for 40-49 year olds. 70% of the market share for moviegoing is below the age of 50, which has several implications for advertising.

In a discussion of brand marketing Jennifer Comiteau writes that “Marketing experts say children can express brand awareness as early as age 2,” and goes on to explain that there are nuanced ways to advertise to children as they have more choice and more mediums through which to digest information. If such is the case then you it becomes clear that for companies and films to establish brand loyalty at a younger age. Lets take for example the way in which Spy Kids marketed to their audience through a promotion with Payless Shoes. Payless Shoes gets the better end of the deal because when the moviegoer grows up their interest in Spy Kids wanes but their brand loyalty will remain. Establishing such a loyalty at a young age will be reinforced throughout their lives for the most part.

The annual report by the MPAA also found that “the number of frequent moviegoers increased among 2-11 year olds and 50-59 year olds but fell for all other age groups including the largest frequent-moviegoing age groups (18-24 year olds and 25-38 year olds),” which suggests several changes are occurring in the movie market. Their largest frequent-movie going age groups are declining in going to the movies because they have access to pirated movies over the Internet. In a study of attitudes towards piracy and legislature in the United States and Germany, researchers found that “In America only 37 percent of 18- to 29-year-olds support such penalties,” further showing how finding movies online is becoming an alternative to going to the theaters. This has broader implications for the studios as they are losing revenue. There may be some backlash for the consumer goods companies that are selling their products but if there is product placement in the film then they are still getting the exposure that they paid for. The consumer is getting maintaining their brand loyalty.

Piracy isn’t the only change that will affect the relationship between film studios and consumer goods companies in advertising to their audience. Films that are released through non-traditional distribution networks will have to create a plan that works for both parties involved. For example, this morning I was watching House of Cards on Netflix and noticed the Samsung phone that Doug Stamper was using to contact the President. The shot lingered on the phone before he didn’t anything and remained on the homepage showing the Samsung logo. Films also on Netflix will probably have to navigate this new advertising terrain the same way as they limited alternative methods of advertising on other platforms.

Additionally the change in age will be of concern to both parties, as advertising to a child and a young adult are extremely different. They use different social media sites, they interact with their peers in different ways and they both have a different set of financial resources. Regardless, whatever may happen in the future the attention will have to be paid in how the relationships between studios and consumer good companies are being renegotiated.

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