Abstract
Purpose – When advertising is provided in the form of product placements – the inclusion of branded
products within media programming – it can increase or decrease the consumer’s utility. This paper
aims to investigate the relationship between product placements and the evaluation of media
programming by consumers. The authors hypothesize that consumers do not necessarily consider them
as traditional advertising because placements of real brands can enhance realism even if placements
sometimes interrupt consumption experience. Thus, the authors believe the relationship between
product placements and consumer evaluation is overall positive. However, too many product
placements in a single program may reverse this relationship. In addition, the relationship might differ
based on the nature of programming, such as art versus entertainment films.
Design/methodology/approach – Empirical analyses were conducted on 134 movies released
between 2000 and 2007 using a generalized method of moments instrumental variable approach.
Findings – The estimation results from product placement data on 134 movies released between 2000
and 2007 show that product placements have a significant positive effect on consumer ratings, but when
used in excess, the effect becomes negative. In addition, a significant interaction exists between the
nature of the film (mainstream vs independent) and the number of placements, such that consumers of
independent films are much less likely to view product placements positively.
Originality/value – This research is the first empirical paper that demonstrates the effect of product
placements on the evaluation of the media using secondary data.
Keywords Product evaluation, Advertising, Entertainment marketing
Paper type Research paper