The Hollywood Economist

Pushing the Pseudo-Reality Envelope

How product placement will fund the future of movies.

The Audi RSQ sports coupe 

A front-page article in the Wall Street Journal recently cited the on-screen brand choices of two movie stars—Steve Martin driving a Mercedes Benz S-Class sedan in Shopgirl and Matthew Broderick driving one in The Stepford Wives—as empirical evidence that this model of Mercedes “has practically become an icon for corporate chieftains, movie stars and diplomats.” Since it was not the movie stars themselves who drive Mercedes but their fictional characters, all the front-page mention demonstrates is how effective product placement can be in the movies.

The casting of cars goes back to the 1974 James Bond film The Man With the Golden Gun, whose producer, Albert “Cubby” Broccoli, made a deal to use American Motors vehicles in all the chase scenes in exchange for advertising dollars to promote the movie. The function of such product placement is to subtly associate the car brand with a class of people. Hence the choice of Chrysler Jeeps in Lara Croft: Tomb Raider 2; Audis in I, Robot and The Transporter 2; General Motors cars in The Matrix Reloaded; and Ford cars on the television shows TheX-Files and 24. Product placement now includes products ranging from Apple computers in Mission: Impossible to Nokia phones in The Saint to almost any brand mentioned on NBC’s The Apprentice.

The persistence of a brand in a studio’s movies often signifies nothing more than a package deal. The Weinstein Company, for example, entered into a multiyear marketing alliance with L’Oréal Paris, the world’s largest “beauty” brand, that will result in the “integration” of L’Oréal’s products into the Weinstein brothers’ movies. And, with digital technology, even if a L’Oréal product was not shot during a particular scene, it can be inserted later (as is now being done with old TV series). One successful producer, whose movies have been distributed by the Weinstein brothers, noted in an e-mail: “Product placement gigs will become a major source of production financing in the future, in which a movie provides a controlled world of good-looking stars wearing a certain brand of clothing for an hour and a half, in exchange for which the brand manufacturer pays for a large share of the production.”

Product placement, though at a much smaller (and discrete) scale, has a long history in Hollywood. In the 1930s, De Beers, for example, had its agents give studio executives sample diamonds to use in roles that showed women being swayed by the gift of a diamond jewel. Not uncommonly, the diamonds were never returned. As brands took on more global significance, product placement became more open—and routine. Most product placements nowadays are barter deals. A manufacturer finances a cross-promotional ad campaign in return for their product being placed in a movie. In the recent James Bond movies, such as Die Another Day and The World Is Not Enough, for example, such deals were valued at over $30 million dollars. Cash deals are much rarer—and minuscule by comparison—but can prove useful in covering unforeseen contingencies. In Terminator 3, for example, the cash committed for product placements was used to guarantee the deferred part of Jonathan Mostow’s $4,960,000 director’s fee.

Not all product placement deals accrue to the profit of the production itself. In the case of Natural Born Killers, for example, a producer arranged for the director Oliver Stone and other members of the production to get two free pairs of cowboy boots in return for showing the boots’ brand name, Abilene, on a truck passing by the open convertible driven by the character Mallory Knox (Juliette Lewis). This meant that the two vehicles—Mallory’s car and the Abilene boot truck—coming from opposite directions, had to arrive in front of the camera at precisely the same time. Over and over again, both drivers, starting their approach a half mile apart, had to be cued with walkie-talkies as the camera, which was mounted on a crane, swooped down. So, to get his free boots, Stone had to shoot numerous retakes, which delayed a production running at $300,000 a day.

For smaller independent movies, the fees for product placement, whether cash or barter, are much lower. (The going rate for a single product inclusion in an independent movie usually ranges from $50,000 to $250,000). According to one knowledgeable independent producer, “The most that’s gained from the placements is some free products, some cash for the production, and some shared advertisement placement,” and that is usually conditioned on the product making the final cut and the film getting a U.S. release. Even so, for productions on a tight budget, bartering airplane tickets, hotel rooms, and automobile leases for product placement slots can result in more money being available for the filming itself—or for postproduction work.

Nor is there any reason that product placement should not be part of the pseudo-reality of a movie. All the Oscar ceremony blather about social reality notwithstanding, movies are fictive concoctions. What goes into that concoction—including stars chosen for their ability to presell foreign markets, locations chosen to qualify for government subsidies, and brands chosen for their product placement value—doesn’t alter its fictional status. The only problem comes when the illusion of a movie is confused with the reality of the consumer zeitgeist—which of course is the ultimate purpose of the product placer.