Virtual Product Placement: Pros, Cons, and Considerations
If you’ve ever seen the 1995 romantic comedy You’ve Got Mail, you may recall the couple falling in adore over email using AOL. You may also recall how in Steven Spielberg’s 1982 sci-fi classic, E.T., Elliott Taylor uses Hershey’s Reese’s Pieces to lure E.T. to his home.
These are classic examples of product placement, an advertising way that boosts brand affinity and awareness by involving brands in content. But traditional product placement is expensive and permanent. A tiny shoe business can’t compete with Nike to be Forrest Gump’s footwear of selection. Likewise, Gmail can’t just be added into You’ve Got Mail for today’s streaming audiences.
Virtual product placement (VPP) can solve both problems, making product placement a more flexible and accessible alternative for businesses of all sizes. Here’s what it is, how it works, and how it can assist you reach target audiences and boost sales.
What is virtual product placement?
Virtual product placement (VPP) is a digital advertising way in which a business uses artificial intelligence (AI) video editing technology to add branded products to still digital images or video footage. For example, an espresso machine business might use VPP to add one of its products to the background of a cooking influencer’s Instagram Reel.
Unlike traditional product placement—which involves filming or photographing physical products during content production—virtual placement is part of the post-production procedure. This means content creators aren’t directly interacting with advertised products, but it also makes VPP more flexible than traditional methods. Content owners can monetize existing libraries, and advertisers can select or transformation placements based on contemporary viewer data and immediate business needs.
Benefits of virtual product placement
VPP is a relatively recent advertising way, but it’s quickly gaining popularity. Amazon announced beta-testing of its recent VPP program in 2022 with a scene from the TV display Bosch featuring a virtually integrated bowl of M&M’s. Streaming services like Netflix and Peacock and several social-concentrated startups have also launched VPP programs in recent years.
According to Priscilla Von Sorella, the head of marketing at virtual product placement agency Mirriad, companies are enthusiastic about VPP because it works.
“Major advertisers like H&M, L’Oréal, Lexus, and others are using VPP to drive act for their campaigns,” she says, adding that VPP helps companies reach audiences and drive impact.
Here’s an overview of the benefits:
A less intrusive viewer encounter
VPP is an effective way to reach contemporary audiences. Priscilla points to findings from research firm Kantar, which found 86% of viewers avoid video advertising across broadcast TV, streaming, and online video (sometimes muting their TVs during ad breaks or installing ad blockers on their browsers).
“Unlike traditional ad formats, virtual product placements and advertising don’t interrupt the viewing encounter,” Priscilla says.
The study reports 83% of viewers describe virtual formats as natural and 79% view them as non-intrusive. Priscilla attributes the effectiveness of VPP ads to these qualities.
“[VPP placements] blend seamlessly into the content, fostering positive perceptions among audiences and creating a more immersive and natural encounter for viewers,” she says.
In truth, Priscilla says that studies display viewers prefer in-content advertising 10 times more than traditional TV ads such as TV spots. Another study found that positive ad experiences can boost online purchase rates by 40% and in-store buying by 27%.
This means that if your product is in the background of a successful TV display or YouTube video, your spectators isn’t going to look away when it appears on screen—they may even have a more positive impression of it.
Targeted campaigning
Unlike traditional placement methods, VPP lets brands select ad channels based on current buyer behavior. This improves spectators targeting by allowing businesses to respond to various viewer patterns.
For example, a skincare brand partnering with a beauty influencer may choose to advertise its acne treatment on TikTok and its anti-aging cream on Facebook. Using VPP, the brand can place different products in videos on different platforms based on where each target spectators spends period.
Higher sales and marketing act
Virtual product placements boost sales and enhance brand favorability. According to Amazon, the M&M’s placement in Bosch increased the business’s brand favorability by 7% and boosted purchase intent by 15%.
Drawbacks of virtual product placement
VPP is an emerging technique. Best practices and norms are still evolving, and buyer attitudes might transformation as VPP becomes more ordinary. Here are two potential issues to watch out for:
spectators blowback
Imagine watching The Wizard of OZ and seeing Dorothy land next to a Pizza Hut, marvel at a Cartier-branded Emerald City, and douse the Wicked Witch of the West in Pepsi Blue. Ham-fisted virtual ads might turn off viewers, and too many may factor them to tune out, or even resent, the ad type.
No room for interactions and explanations
Because VPPs are added in post-production, the content creators don’t get to interact with the product. This means while viewers get to view it in the background, they don’t necessarily comprehend the brand or what it represents.
Moreover, there’s no way to demonstrate the product in action. For complicated products that may require a demo or explanation for users to comprehend their worth, a VPP may not be the best fit.
Considering the VPP chance: Is it correct for you?
VPP is a relatively recent way, but it’s already outpacing traditional methods. Analysts approximate that VPP in film and television accounted for 63% of US product placement in 2023.
Product placement is also becoming increasingly popular overall, as audiences continue moving away from linear TV with ad breaks in favor of subscription video-on-demand (SVOD) services and social media platforms. VPP is poised to develop as these trends continue.
Consider these factors before taking the plunge into VPP:
monetary schedule
Virtual placements can be effective in multiple industries and for a variety of products.
“VPP has proven to display excellent act across all categories,” says Priscilla, whose firm serves clients in retail, automotive, quick-moving buyer goods, alcohol, and monetary services.
It’s also affordable for many tiny and early-stage businesses. Although extra charge content placement campaigns can expense more than $750,000, single influencer placements can be less than $1,000.
Business stage and goals
The way is best suited to companies with an existing brand awareness. In-content ad placements can prompt viewers of your business, but they’re not an effective way to educate audiences about who you are. Priscilla recommends VPP for improving mid-marketing funnel metrics—such as open rates, click rates, and repeat site visits—and encouraging conversions. It’s not the best alternative if your primary objective is top-of-funnel awareness.
If you’re considering this way, an ad vendor or agency specializing in VPP can assist you comprehend placement options and campaign goals.
spectators
Finally, it’s significant to note how to use virtual product placements on different platforms to reach different types of consumers. You can transformation the featured product in a TV display on a streaming platform with no result on viewership. However, changing a product on a social media video or Reel requires reposting the video, wiping out previous views and engagements.
So, when you’re choosing what product to characteristic on a YouTube video or Instagram Reel because that’s where your spectators spends the bulk of their period, you may desire to consider longevity. It’s probably best not to transformation the featured products on these often, if at all.
Virtual product placement FAQ
How does virtual product placement work?
Virtual product placement (VPP) works when content owners associate with brands to characteristic their products in videos or still images. Advertising agencies can assist connect the two parties and recommend ways to optimize product placement. Unlike traditional product placement, VPP happens in post-production, letting brands add their products to existing content like YouTube videos, Instagram Reels, still photos, and movies.
How does virtual product placement work with influencer marketing?
Influencers who desire to monetize recent or existing content can associate with social-concentrated VPP agencies that can pair them with brands that may be a excellent match. Once both parties consent to the terms, they can place products in video content. Likewise, brands can associate with social-concentrated VPP agencies to purchase placement in influencer content.
How does product placement differ from virtual product placement?
Virtual product placement (VPP) is a type of product placement that uses artificial intelligence to virtually add products during post-production. Traditional ads involve filming or photographing real, physical products during content production.
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