University of Adelaide Business School Product Placement in Reality Television: An Investigation of Audience Identification and Program Credibility Claire Sherman January 2010 Thesis submitted to the University of Adelaide Business School in fulfilment of the requirements for the degree of Doctor of Philosophy, 2010. Chapter 1 : Introduction to the Study 1.1 Introduction As today’s consumers become exposed to increased levels of advertising clutter (Elliott and Speck 1998), marketers have looked to other means to get their message across. Product placement has become increasingly popular and even rivalling traditional advertising. In the first quarter of 2009 an average of 10 minutes and 35 seconds per hour of US prime time network TV was devoted to in-program brand appearances compared to 13 minutes and 53 seconds for traditional advertising (TNS Media 2009). The growing appreciation for this promotional tool within industry warrants further research, receiving limited attention within the marketing literature until the last decade (Balasubramanian, Karrh, and Patwardhan 2006). However, before establishing the research context for this study, an overview of the benefits, acceptability and ethicality of this controversial technique provides an understanding of its place within modern marketing communications. 1.2 Potential Benefits of Product Placement Product placement has been labelled a form of advertising, yet it has several advantages over traditional advertising and other forms of promotion, which account for its recent growth (TV placements hit US$104.5 million in Aust for 2005; (PQ Media 2006)). Studies of television and cinema advertising have cast doubt on the amount of attention given to traditional adverts (Dunnett and Hoek 1996; Elliott and Speck 1998). Although the exact figures are contentious, a range of between 50-70% of households with personal video recorders (i.e. Foxtel IQ (Aust) or TiVo) have been purported to skip ads (Anderson 2008). Furthermore, multitasking, especially among younger consumers, is taking consumer attention away from advertising. Distraction, zipping and zapping, tasking and avoidance are all problems associated with 1 traditional advertising but virtually eliminated when using product placement. Its ability to cut through clutter is cited by industry as one of the main reasons for its use (Interview 2003). Product placement combines features of both advertising and publicity to create a unique advantage. It is similar to advertising in that it sets a context for the product or brand, positioning it purposefully. It is similar to publicity in that it is not necessarily perceived as advertiser biased (Balasubramanian 1994; Karrh 1998). In particular, consumers may not realise at the time of judgement or purchase that they have been given information via an advertiser-funded message (Shapiro, Macinnis, and Heckler 1997). Although, this advantage may be diminished if legislation enforces the explicit reporting of product placement as is now being considered within the European Union (European Parliament 2007). In advertising, the product is the central focus or reason for creating what people may perceive as a ‘selling device’. Product placement, on the other-hand, has the focus of a storyline and characters and its vehicle is intended to entertain people. This difference in focus may give rise to a more positive processing of the product message due, perhaps, to mood and involvement and may induce different processing of the message. Product placement is also set within an extended setting where viewers can get a clearer picture of the context in which the product is found. Consumption constellations are able to be formed as the setting of a movie or television show groups brands which help to create an entire image or enable a ‘rub-off effect’ from one brand to another (Solomon and Englis 1994). Not only is there the ability to transfer meaning from character to brand but also from brand to brand which may facilitate a stronger image transfer. Also, as viewers become involved with the program, their sense that it is real may develop, and the program can act much like a real-life reference (Solomon and Englis 1994). 2 1.3 Acceptability and Ethicality of Product Placement Although there may be many drivers for marketing practitioners to use product placements, the practice has been criticised for being unethical and a disruption to viewers’ enjoyment of the program (Gupta, Balasubramanian, and Klassen 2000). Consequently, much of the initial research on product placement has focused on its ethics or acceptability (d'Astous and Seguin 1999; Gould and Gupta 1997). Largely, researchers have found that attitudes towards product placements are positive, particularly where the brand contributes to the verisimilitude of the program or movie (DeLorme and Reid 1999; Gould and Gupta 1997; Gould, Gupta, and Grabner-Krauter 2000; Stern and Russell 2004). Also, individual differences have been found to moderate this acceptance, with greater acceptance from those who are younger, more brand conscious, frequent movie-goers and have a general liking for adverts. Such findings suggest that product placement may have become normalised. In particular, younger viewers may not know of any other media environment and those who have been more frequently exposed to placements may have become desensitised. Even so, this acceptance lessens when the product is ethically charged, such as cigarettes, alcohol, guns and to a lesser extent fatty foods (Gould and Gupta 1997; Gupta et al. 2000), mirroring ethical concerns surrounding traditional advertising (Waller, Fam, and Erdogan 2005). Lesser acceptance of these types of products is not unexpected and reflects a focus on the potential harm that may be caused by consuming them and the more highly regulated promotion used to reduce potential harm. Indeed, regulators have responded to these concerns, where regulations and laws such as the Tobacco Advertising Act 1992 (Cwth) and the EU Audiovisual Media Services Directive (formerly Television without Frontiers Directive) have been amended to encompass a ban on tobacco product placements. 3 One particular demographic segment that may be adversely affected by product placements is children. Media is often a large part of a child’s life, and exposure to popular music, television and movies at developmental ages may make younger people susceptible to these integrated and often subtle product messages, particularly where they involve celebrities and popular characters (Livingstone and Helsper 2006). There have been a few studies focusing on the effect of product placements on minors. In particular, a study by Auty and Lewis (2004) found evidence that children are affected by product placement in an implicit way, in relation to brand choice, a behavioural effect of product placement. This is ethically relevant not only because there may be an effect on minors, with potentially lower levels of media literacy, but because it highlights a non-conscious effect, an ethical issue of concern for all ages. Indeed, a study by Law and Braun (2000) found a similar effect with university students, where a positive effect on choice was apparent despite a lack of correlation between their recall and choice of the brand. This suggests that consumers are not necessarily aware of the effect of a placement on their choice, and thus may not be making informed choices, particularly when placements are covert. Focusing on viewers’ reaction to this surreptitious influence, d’Astous and Seguin (1999) hypothesised that consumers would be opposed to subtle forms of product placements. Interestingly, this hypothesis was supported for placements within informational programs but not for mini-series or game shows, suggesting that viewers may be more concerned with surreptitious influences where information is being imparted and perhaps trusted to do so without bias. Again, this concern is directly reflected in the regulations surrounding product placement in Australia. Disclosure of product placement, or any commercial arrangement between an Australian network, producer or presenter and a third party, is required under the Commercial Television Code of Practice (Aust), yet only applies to factual programming, which includes current affairs, documentaries and infotainment programs. 4 The findings above suggest that perceptions of ethicality are dependent on the type of product placed, how surreptitious the placement may be and whether the audience can discern the true source of the message. Indeed, in a response to the European Union’s ban on product placement, Hackley, Tiwsakul, and Preuss (2008) purport that its ethicality is dependent on identification of the brand as the source of the placement and the viewer’s level of sophistication in understanding this practice (which they believed to be sufficient). Although this study will not address the question of ethicality directly, it explores viewers’ sophistication or susceptibility in interpreting these embedded brand cues. 1.4 Defining Product Placement In defining product placement, both academics and practitioners have differed in their opinion. Many academics and practitioners use the term ‘product placement’, however, as Karrh (1998) noted, the unit of analysis is often not the general product but particular brands (i.e. Pizza Hut rather than pizza was promoted in Wayne’s World). Since then, several academic papers have used the term ‘brand placement’ to highlight the correct unit of analysis.