product placement in the digital world

PRODUCT PLACEMENT IN THE DIGITAL WORLD: A CONCEPTUAL FRAMEWORK

Shinyi Chin, RMIT University, Australia. Bradley Wilson, RMIT University, Australia.

Corresponding author: Shinyi Chin. School of Media and Communication. RMIT University. GPO Box 2476V Melbourne, Victoria 3001 Australia. Email: [email protected] Tel: +61 433 562 383

Topics: Product Placement, Digital Media, Meaning Transfer, Brand Image

1 PRODUCT PLACEMENT IN THE DIGITAL WORLD: A CONCEPTUAL FRAMEWORK ABSTRACT Product placement has received considerable interest given the rise in new communications tools in recent times. This paper makes a primary contribution in that it posits a classificatory structure that incorporates both new and old-style media formats of product placement. An initial operational model is developed that will be tested through further qualitative and quantitative research phases. An experimental design identifying four classifications of media platforms is proposed as a means to address the research questions. This classification aims to highlight the distinctions between different media platforms based on a differing purpose of use and the manner in which consumers engage with each respective media platform. It is believed that by attaining a better understanding of these aspects of consumer behaviour a more thorough analysis of the brand image and meaning transfer process can be tested. Overall, this paper is explicitly presented to seek feedback regarding the classificatory framework developed and the preliminary operational model to be tested. INTRODUCTION Product placement has been an often used tactic in the marketing, advertising and communication industries. Over the past decade, there has been a resurgence of product placement, in particular within new media platforms such as video games, virtual worlds, social media and reality TV programs (Taylor, 2009). In Australia, the estimated value for ingame advertisements is AU$1.25bn (Cornwell and Schneider, 2005; Manktelow, 2005). Major brand names such as American Apparel, Starwood Hotels, IBM, Dell, Sears, and even Reuters have a substantial presence in the popular online virtual world Second Life (Rubel, 2006). The goal for this study is to develop a classificatory framework and proposed model to contribute to the body of knowledge between product placement and these newer digital platforms. This paper commences by reconciling the current literature on product placement, brands and advertising particularly in new media platforms. Then, the paper will highlight a gap in knowledge where there is limited research in the areas of the effectiveness of product placement, how consumers interact with new media platforms, and the specific working dynamics of product placement in digital platforms. Subsequently, a conceptual model for the investigation of product placement across multiple platforms is put forth. A brief presentation of a possible methodology is also outlined following the explanation of the conceptual model. LITERATURE REVIEW Product placement can be defined as an insertion of consumer products or services in television programs and films for promotional purposes (Nebenzahl and Secunda, 1995; Drennan and McDonnell, 2010). As technology advances, the concept of virtual product placement has developed in parallel, whereby the image of a brand or a branded product is digitally inserted into the film, television program, video game or virtual world (Drennan and McDonnell, 2010). For the purpose of this paper, as well as to maintain consistency, the term ‘product placement’ will refer to both insertion of a brand or branded product/service in both traditional and new or digital media forms. Likewise, the term ‘digital’ will be used in reference to all non-traditional platforms such as video games, virtual worlds and social media.

2 The past fifteen years have seen a rapid rise of video gaming culture as a mainstream form of entertainment (Badian et al., 2008). Similarly, online virtual worlds have also become another popular alternative for advertisers and marketers. These three-dimensional environments appear very similar to our ‘real’ world, which allow online entertainment as well as social networking for users (Barnes, 2007). It has been reported that residents of Second Life spent $9 million in the year 2006 (Rubel, 2006). Coupled with the significant growth in the number of players or ‘residents’ in these online virtual worlds in the past few years, this only further reinforces consumers’ involvement in the digital world. Furthermore, this coincides with the increasingly cluttered advertising environment, which consequently encouraged advertisers and brands to continuously seek alternative forms of promotion to achieve stated objectives (Taylor, 2009). Needless to say, new media platforms such as video games, online virtual worlds, mobile games, YouTube videos and blogs, became a new and exciting territory for advertisers to harness.. Advertising has been identified as one of the key instruments that facilitate meaning transfer from the culturally constituted world to consumer goods (McCracken, 1986; McCracken, 1989). The location of meaning is within our culturally constituted world, consumer goods and the individual consumer. Cultural categories are substantiated through material objects, by instilling a tangible record of cultural meaning that is otherwise intangible (McCracken, 1986). A valuable role of advertising is to act as a vehicle of meaning transfer. Cultural properties from the world come to reside in the unknown properties of the consumer good and it is the advertiser’s job to identify the cultural properties for the intended product (McCracken, 1986). Whether this transfer of meaning is successful or not depends on the consumer and whether they are able to recognise the similarities between the consumer good and the cultural properties. Bettman and Escalas (2005) built on McCracken’s theory of meaning transfer to explore the relationship between brands, meaning transfer and self-brand connections. It is suggested that based on the established cultural properties in the consumer good, a self-brand connection (SBC) may be formed (Escalas, 2004). Consequently, consumers use products and brands to construct self-identity which is supported by the appropriate brand/product associations created by the advertisers. Furthermore, Gwinner (1997) proposed that consumers have become more ‘active’ in their interactions with brands and advertising, and are often seeking ‘meaning’ in products to supplement their concept of self. This premise can be transferred to social media, especially virtual worlds, as consumers are embedded at a personal level. It is the contention of this paper that how consumers relate and associate with brands become just as important in the online sphere as it is offline. There is a large body of literature in product placement in traditional media forms (television and motion pictures) as well as in other new and interesting contexts such as computer games, songs and novels (Taylor, 2009). The current literature has explored whether brand placements in computer or video games shift pre-existing consumer attitudes towards a given brand (Ewing et al., 2009). Drennan and McDonnell (2010) highlight the positive impact of product placement on brand recall and recognition for new brands. Research has been done on computer games and the gaming experience on brand attitudes and subsequent purchase intention effects leading to unique models (Barnes, 2007; Glass, 2007; Constien et al., 2008; Ewing et al., 2009). There has also been a study on the acceptability of product placement in advergames and whether this is correlated with consumers’ attitude towards advertising in general (Buckner and Winkler, 2006). However, much of the work in this area is still in relative infancy.

3 Despite substantive research on the workings of product placement in virtual and gaming worlds, there is still a gap in the research of the relative effectiveness of advertising and product placement strategies used in these new media platforms. This reinforces the call for research that additional studies concentrating on measuring the effectiveness of product placement are highly desirable (Edwards and La Ferle, 2006; Barnes, 2007; Badian et al., 2008; Taylor, 2009; Drennan and McDonnell, 2010). Moreover, Ewing et al. (2009) explain how product placement might work and how it will assist in building brands but urge further investigations by other researchers. The literature also revealed a gap in the domain of comparative testing, in particular the effectiveness of different types of ads in different types of games (Badian et al., 2008). Researchers also note that the scope of audience selectivity and targeting in digital product placement offers significant utility to gain new insights on how consumers behave and interact with brands in the digital worlds (Badian et al., 2008; Drennan and McDonnell, 2010). Gwinner (1997) values more research to elucidate the workings of the image transfer process for this domain. It has been established that the dynamics of product placement across multiple platforms should be investigated. CONCEPTUAL FRAMEWORK The proposed conceptual model (Figure 1) is developed for testing across media platforms. This model encompasses independent and dependent variables, with the objective of observing how the brand image is transferred from advertising to consumer via media. INSERT FIGURE 1 ABOUT HERE. It is believed that the suggested dependent variables are key constructs to include as they are integral to assessing strategy effectiveness. Investigating such relations may enable a better understanding of how advertising in digital media may function as well as assessing the overall effectiveness of using product placements via specific media platforms. The inclusion of brand awareness, brand recognition and brand recall is common in effectiveness studies. This is important as these constructs affect the consumer decision making process, where the formation and strengths of brand associations in brand image can be influenced (Keller, 1993). Brand image is defined as “perceptions about a brand as reflected by the brand associations held in consumer memory” (Keller, 1993, p. 3). Brand associations are the information links from consumers’ memory which contain meaning (Keller, 1993). Therefore, in order to assess the effectiveness of brand image transfer effects, the different types of brand associations are to be investigated. The three main categories of brand associations are attributes, benefits and attitudes (Keller, 1993) and these will be central to the investigation. Particular emphasis center around brand attitudes as they represent the overall evaluations of a brand and thus influence the underlying basis of consumer behavior in brand choice and purchase intention (Keller, 1993). By studying how consumers engage with the media, their behaviours with each platform, their attitudes toward a brand and how they associate with brands, we will be able to comparatively test how advertising and branding affects consumers in each respective platform. To further support the proposed model, the different media platforms to be studied have been classified into four main classes (Figure 2). INSERT FIGURE 2 ABOUT HERE.

4 The first class encompasses traditional media forms such as films, television programs and event/sport sponsorships. Traditional media forms such as films, TV programs and event/sport sponsorships often engage consumers relatively passively, and the main goal for using product placement are to increase brand awareness, to build and strengthen brand image, and reach a widespread audience in a short amount of time (Gwinner, 1997; D'Astous and Seguin, 1999; Drennan and McDonnell, 2010). The second class comprises of different types of video games; whilst the third class includes variations of virtual worlds. Cursorily, video games and virtual worlds may seem similar, however there are key differences that should be noted. Product placements in video games and virtual worlds aim to create a sense of realism for the player, similar to what is experienced in films and TV shows (Buckner and Winkler, 2006). However, the distinction with films and TV shows is the level of interactivity involved (Glass, 2007). The gamer is inherently more involved in the narrative context or the storyline of the game, whereas the participant in the ‘virtual world’ is involved in more of an alternative world pertaining to virtual e-commerce and social networking on a global scale (Barnes, 2007; Glass, 2007). In other words, the goals involved for the gamer are usually short-term (completing the game/mission) as compared to consumers in virtual worlds with long-term goals of building their avatars’ of virtual identity presence. Therefore, although similar in many ways, the type of engagement involved is unique based on media type purpose. Lastly, the fourth class incorporates different social media forms such as Facebook, Twitter, MySpace, blogs and other online communities. Social media platforms are the most interactive media forms as they facilitate consumer or user generated content (Branthwaite, 2011). In these spaces, the main goal for product placement or brands is to engage in an active ‘conversation’ with consumers, and more often than not, do more ‘listening’ while consumers do the ‘talking’ online (Branthwaite, 2011; Pehlivan and Weinberg, 2011). Despite the few similarities mentioned, this classification aims to segment the types based on pertinent characteristics of the media and differing audience participation levels. Methodologically, it is anticipated that this study will involve two phases of data collection. This includes a qualitative and quantitative phase. For Phase 1, twenty in-depth interviews will be conducted for the purpose of the research. This will incorporate a breakdown of five interviews for each media platform category that is being examined as demonstrated in Figure 2. In-depth interviews provide a means to explore consumer perspectives on a certain idea, program or situation (Boyce and Neale, 2006). Additionally, a one-on-one environment allows participants to be more at ease and comfortable when answering questions, as well as free from any social pressure to conform as there will be no group dynamics (Boyce and Neale, 2006). Therefore, it is believed that in-depth interviews are suitable for the proposed study as it replicates a more intimate environment for the participant thus facilitating greater data integrity. For Phase 2, a quantitative online survey is recommended. Surveys are useful means for gathering information from a large group of people, particularly information about characteristics, actions or opinions (Kraemer and Pinsonneault, 1993). It is anticipated that a model or framework on the relationships among the research variables would have been modified and refined from Phase 1. Thus, an online survey with pre-formulated written set of questions is an efficient way to measure this study’s variables such as brand awareness, brand associations, brand attitudes, consumer engagement and interaction as per Figure 1. A sample size of 200 (minimum) from a population of Australian media users will be used for this survey. Due to the conceptual framework being in its early development stage, further detailed sample parameters are yet to be formulated. In conclusion, the proposed conceptual model seeks to gain a better understanding of the relationship between brands, product placements and consumer behaviour. In addition, a

5 brand image transfer framework will be explored to study the effectiveness of product placement formats. Henceforth, this study posits the following research questions: 1. As compared to traditional media, how receptive are consumers towards product placements and brands in video games, virtual and social networking worlds? 2. Does the same model/framework of image transfer that features in event sponsorships (and other traditional media) apply to new media platforms? What are the respective differences and similarities? 3. Does product placement in new media platforms help positively shift brand attitudes and/or shift their perception of brand image? CONTRIBUTIONS & DIRECTIONS FOR FUTURE RESEARCH This paper contributes by classifying and reconciling the relationship between brands and the consumer in both traditional and the newer digital media platforms. By understanding how consumers receive and process advertising in digital media platforms, the effectiveness of product placements can be explored, thus allowing insight into using advertisements and product placement. When undertaking future research this paper has alluded to being cognizant of the following issues1. It is possible that the conceptual model proposed (Figure 1) may be influenced by other variables such as brand loyalty, perceived fit (the appropriateness of the type of advertising in relation to type of platform) and consumer preferences. These variables could potentially act as moderators and/or mediators in the proposed model (Baron and Kenny, 1986). This work is progressing and a more refined articulation of Figure 1 will be highlighted at the conference. It is predicted that classifying product placement via media platforms (Figure 2) may bring forth some degree of ambiguity as the four categories are situated in different media contexts, possibly exacerbating issues for results comparability. However, with this knowledge, other studies in marketing, public relations and business have successfully used experimental designs and similar classification methods to compare respective formats (Westberg, 2004; Coombs and Holladay, 2009; Pehlivan and Weinberg, 2011). As Pehlivan and Weinberg (2011) emphasised, it is important to understand the different purposes and ways consumers respond to or use different media platforms as the rules of utilisation and functionality differs for each. Moreover, it will be valuable to test different classifications of product placement platforms so as the results will not limit us to the development of just one strategy (Coombs and Holladay, 2009). It is acknowledged that the digital world of product placement is considered nascent and still in its early stages of knowledge development. Consequently, it may lack suitable psychometric scales of measurement as a basis for comparison. This work may need to engage in significant scale development prior to addressing the specified research questions. Nevertheless, it is believed that this study will have particular significance for expanding the body of research and we welcome feedback to improve the ideas as this work is in its’ formative phase. In conclusion, the major contributions of the proposed study have been outlined in that it will contribute to the limited literatures on the effectiveness of product placements and advertising, particularly for the area of new media such as video games, virtual worlds and other social media formats. Second, it will elicit insights on how consumers behave and interact with 1

We expressly welcome conference participant suggestions to improve the research study. Hence, the authors are putting forth formative/developmental work for feedback.

6 brands in these platforms. Third, by understanding how product placement works, a framework for advertisers when considering different product placement platforms may facilitate brand planning and satisfy specific communication objectives. We are optimistic that future findings will illuminate some practical implications for the effective use of product placement across platforms. REFERENCES Badian, V., E. Bartlett, et al. (2008). Digital advertising in 2142: Measuring the effectiveness of advertising to the PlayStation® generation. Market Research Society (Annual Conference 2008): 2-15. Barnes, S. (2007). Virtual worlds as a medium for advertising. Database for Advances in INformation Systems 38(4): 45-55. Baron, R. and D. Kenny (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology 51(6): 1173-1182. Bettman, J. and J. E. Escalas (2005). Self-construal, reference groups, and brand meaning. Journal of Consumer Research 32(3): 378-389. Boyce, C. and P. Neale (2006). Conducting in-depth interviews: A guide for designing and conducting in-depth interviews for evaluation input. Pathfinder International Tool Series: Monitoring and Evaluation - 2 May. Branthwaite, A. (2011). The power of qualitative research in the era of social media. Qualitative Market Research: An International Journal 14(4): 430-440. Buckner, K. and T. Winkler (2006). Receptiveness of games to embedded brand messages in advergames: Attitudes towards product placement. Journal of Interactive Advertising 7(1): 24-32. Constien, C., G. Mau, et al. (2008). Communicating brands playfully: Effects of in-game advertising for familiar and unfamiliar brands. International Journal of Advertising 27(5): 827-51. Coombs, T. and S. Holladay (2009). Further explorations of post-crisis communication: Effects of media and response strategies on perceptions and intentions. Public Relations Review 35(1): 1-6. Cornwell, T. B. and L. P. Schneider (2005). Cashing in on crashes via brand placement in computer games. International Journal of Advertising 24(3): 321-342. D'Astous, A. and N. Seguin (1999). Consumer reactions to product placement strategies in television sponsorship. European Journal of Marketing 33(9/10): 896-910. Drennan, J. and J. McDonnell (2010). Virtual product placement as a new approach to measure effectiveness of placements. Journal of Promotion Management 16(1): 25-38. Edwards, S. and C. La Ferle (2006). Product placment: How brands apprear on television. Journal of Advertising 35(4): 65-86. Escalas, J. E. (2004). Narrative processing: Building consumer connections to brands. Journal of Consumer Psychology 14(1/2): 168-180. Ewing, M., T. Mackay, et al. (2009). The effect of product placement in computer games on brand attitude and recall. International Journal of Advertising 28(3): 2-12. Glass, Z. (2007). The effectiveness of product placement in video games. Journal of Interactive Advertising 8(1): 23-32. Gwinner, K. (1997). A model of image creation and image transfer in event sponsorship. International Marketing Review 14(3): 145-158. Keller, K. L. (1993). Conceptualizing, measuring, and managing customer-based brand equity. Journal of Marketing 57(1): 1-22.

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8 Figure 1: Conceptual Model Investigating Various Product Placement Media Platforms Impact.

Figure 2: Product Placement Media Platform Classification. TRADITIONAL

VIDEO GAMES

Films

Console Games

Television

Personal Computer Games

Radio

Mobile Games

Novels

Online Games (including social media platforms)

Songs Events

Massively Multiplayer Online Games (MMOG)

VIRTUAL WORLDS

SOCIAL MEDIA

Massively Multiplayer Online RolePlaying Games (MMORPG)

Online Communities (Eg. YouTube)

Social Networks (Eg. Facebook, Massively Multiplayer Online Real-Life MySpace) Games (MMORLG) Blogs (Eg. WordPress, Tumblr) Microblogs (Eg. Twitter)