Friday, September 10, 2010

When Product and Celebrity Placement gets Dirty

Every marketer and student of marketing knows all about product placements- a type of advertising where brands are given cameos in movies, tv programs, video games, songs and literary works. The idea is that product placements are more stealth than more traditional ads and can powerfully convey brand associations into the audiences’ minds. (Think why so many brands line up to get secondary association spillover benefits from the suave, sophisticated, and exciting James Bond.) And, since most media is international, a movie or hit tv show can be a fast way to reach a global audience quickly. For the producers of the media, product placements are a nice way to co-finance their work and, at the same time, provide realism to the story (e.g. think of FedEx in Castaway). It is not surprising, then, that global brands plow money into product placements at a rate of 3.6 billion a year. By the way, a typical product placement is between $50,000 and $100,000 (Keller, Strategic Brand Managment P.253).

Of course, product placements have been around for a long time. Wiki reports that the first product placement was in 1873 (Jule Verne's classic book Around the World in 80 Days) - and the success of the Reese’s Pieces in Spielberg’s ET ushered a new demand for product placements. Since that time, product placements have evolved and “celebrity placements” have grown in popularity. A lot of star (and starlets) are paid to “be seen” with certain brands (ie. celeb placement). Miss Sixty and Rock & Republic pay celebs to sit in the front row of their fashion shows. (Rihanna gets $100k to attend a fashion show, Beyonce $90k, Kim Kardashian $40k, for example). New York Daily News and Brand Channel speculate that when Ben Affleck and Jennifer Garner nonchalantly pose for the paparazzi with their Starbucks cups or when Kate Hudson and Cameron Diaz parade about the town in their Uggs- they are getting well compensated from the brand. The going rate appears to be around $100k. The point is this- brand presence around celebs is often orchestrated by the brand.

But it appears celeb placement has evolved. One of my readers who has his ear to the ground on new marketing trends sent me a beat on celebrity placements with a twist: negative product placement and negative celebrity placement. The rumor is that some luxury brand companies are sending their competitors' products to celebrities who they think will create a negative associations with the brand. The flagship example involves certain luxury brands that are “aggressively gifting” “undesirable fashionista” Jersey Shores star Snooki with competitor products. The idea is that Snooki has terrible fashion sense and if she is seen with a brand, then the brand will suffer. Since bad is stronger than good and consumers weigh relevant negative associations stronger than positive associations (there is a lot of evidence about this and I will have a blog entry about this in the upcoming weeks), there is the potential for a lot of fast damage to the brand.

Some might think this negative celebrity placement is a good competitive idea, but I’m going to argue that this is a big mistake for two main reasons. First, there may be legal (and certainly ethical) implications if a firm of the competitor can prove that the competitor maliciously sought to damage its trademark. Second, and more importantly, negativity can damage the entire category. This argument sounds like this: If you hit me, I will hit you back harder. We've seen this before in politics. When campaigns go “negative” the result is increased voter cynicism, apathy, and ultimately lower voter turn out. Luxury brands watch out- it is a dangerous game you are playing that can quickly backfire.


  1. I haven't done too much competition law, but I agree that there would be legal implications (this, of course is from a Canadian legal perspective). For acts to be anti-competitive they must be predatory, exclusionary or disciplinary. It's safe to say this one would be classified as "predatory." Additionally, the burden of proof is not too difficult (here at least) - all you need to show is that damage occurred or would be "likely" to occur.

    Great article Bob!

  2. Burden of proof not too difficult? I was thinking it would be difficult.

  3. It's such a fake world.

  4. wow I must up my rates for accepting to sit in first row at fashion shows

  5. After discussion with a peer articling with the Competition Bureau, I have another perspective on the legal implications of this practice.

    Technically, there is nothing wrong with the practice if you strictly interpret the Competition Act, but the practice violates the "spirit of the Act" which can be relevant in a court of law. The closest provision is Part VII: Deceptive Marketing Practices, beginning with 74.01. It's clear the drafters of the Act did not contemplate the scenario and is a case where the conduct violates the spirit of the Act but not the provisions. Legislative reform is necessary, perhaps.

    In my opinion, it's an interesting case because it shows how the new marketing methods have profound impacts on lawmakers and exemplifies just how connected the two industries really can be,