Everything you need to know about virtual product placement

Virtual product placement is the biggest emerging technology that every advertiser and brand needs to know about. However, it’s still steeped in mystery for many, so let’s unpack a few insights into the trend.

WHAT IS VIRTUAL PRODUCT PLACEMENT?

Virtual product placement dynamically inserts a brand into digital content in the form of product, signage or video using AI technology. Placements are added into content post-production, meaning that different brands can be inserted according to the content’s audience, channel, and schedule. Crucially, virtual product placements blend naturally into the chosen content, rather than occurring in a disruptive manner.

As a result, virtual product placement is suitable for a range of content formats, including across Television, SVOD/AVOD, Music and Influencer content.

THE ORIGINS OF VIRTUAL PRODUCT PLACEMENT

Traditional product placement has been around for decades — just consider how Aston Martins are featured throughout classic Bond films. Brands have been making their way onto film and TV sets as narrative devices, background props, and even advertisements featured on magazines and billboards.

This tactic is still hugely popular. Global spending on product placement rose by 12.3% to $22.93 billion in 2021, according to research from PQ Media. The US, which accounts for a 56% majority of the global market, experienced a 13.2% spending increase last year, totalling an incredible $12.84 billion.

However, the challenges of traditional product placement include the fact it can be complicated to agree upon, painstaking to roll out, and is very permanent once filmed. Content creation also takes months of production time before it is broadcast, making traditional product placement more of a long-term commitment than a flexible format.

In contrast, virtual product placement can seamlessly integrate products into content that has already been produced. This provides advertisers access to existing content in a fast, flexible, and scalable manner. 

This also empowers content creators to open new revenue streams without compromising their production schedule, or committing to brand partnerships in advance. Instead, they are free to focus on their narrative and rely on virtual product placement to incorporate intuitive and non-disruptive advertisements.

VIRTUAL PRODUCT PLACEMENT KEEPS A VIEWER'S ATTENTION

Changing viewer behaviors and attitudes also contribute to the importance of virtual product placement in today’s media landscape. It’s all about creating a positive user experience.

Today, traditional TV audiences are in decline. Viewers are naturally leaning towards media platforms that offer little or no interruptive advertising, and greater user freedom and choice.

Read more on this subject in our Lost Audiences Whitepaper

In contrast, streaming platforms are seeing continued audience growth, but also increasing market competition and growing business pressures. As a result, streaming platforms are highly motivated to provide the most appealing experience possible for their audience.

It’s not surprising then that brands, advertisers and media partners alike are on the search for less intrusive and more engaging ad formats. Fortunately, virtual product placement can offer the ideal solution for all of them.

According to Statistica, adults in the US spent an average of 485 minutes (just over eight hours) consuming digital media every day. Around 25% of this time is taken up by advertising space. The other 75% is their chosen content, which captures the viewers’ full attention. While many people skip through ad breaks or put them on mute, few are likely to do the same to their favorite programming.

Using virtual product placement to place ads within their chosen content, rather than around it, guarantees its consumption without creating viewer apathy.

According to recent research by Kantar, only 12% of consumers stated they enjoyed traditional TV ads, yet an impressive 79% responded positively to virtual product placement. In-content ads are also seen as innovative by 77% of consumers and preference is 7x more than TV spots.

Discover more industry in-content advertising insights in PLACING THE FUTURE

VIRTUAL PRODUCT PLACEMENT CREATES A REAL IMPACT

Not only do audiences prefer virtual product placement, but in-content ads are also proving to be more memorable than traditional TV spots. 

Research from Kantar found that virtual product placement delivers impressive results across ad awareness, brand awareness, favorability and consideration when compared to other advertising formats.

While many people skip or ignore ad breaks, in contrast, virtual product placement reaches viewers when they are highly engaged with their chosen content.

Virtual product placement can also align brands and products with a show, character or storyline that really appeals to their target audience - creating a strong impact on their buying behaviors. Research has shown that audience buying behaviors change according to the content’s emotional triggers, highlighting the importance of careful scene selection.

Crucially, Kantar research also revealed clear evidence that better results are gained from

a higher frequency of exposure as opposed to individual exposure lengths. In essence, the more often a brand is seen, the more impact on the viewer. These findings highlight the benefits of virtual product placement and its impressive impact on brand equity.

Since virtual product placements are contextual to the media content and not disruptive to the narrative, there is no risk of excessive frequency. You can show a cereal brand in every scene set in a kitchen, or a makeup brand in every shot within a bedroom, without it feeling like overkill. As a result, viewers can experience repeated product shots and still feel warm brand sentiment.

VIRTUAL PRODUCT PLACEMENT REACHES THE RIGHT AUDIENCE

In recent years, the evolving media landscape has led to increasing audience fragmentation. Yes, many people still spend their evening consuming some form of content — but with over 1,775 US broadcast channels, according to Tech Jury, as well as a plethora of digital streaming platforms, viewers have more choices than ever before.

In some ways, a traditional TV ad is similar to a billboard along the side of a highway. It’s expensive to put up in a high-traffic spot, there’s no guaranteeing who will drive past, and the billboard will display the same message to anyone who uses that road.

Virtual product placement works differently by focusing on specific content, rather than the channel. Shows tend to have a defined demographic, making in-content ad placements highly effective at tapping into a brand’s target audience.

As a result, virtual product placement delivers a 22% - 49% audience gain compared to TV spot breaks, varying by program and market.

VIRTUAL PRODUCT PLACEMENT WORKS BEST IN COMBINATION

While consumer research shows a preference for virtual product placements over traditional ad spots, brands don’t have to take an all or nothing approach. In fact, virtual product placements have proven to be highly effective in amplifying TV spot campaigns. 

According to Kantar research, 56% of viewers exposed to virtual product placements consumed the featured products after exposure, compared to 34% after TV spot exposure only. On a similar note, 56% of viewers exposed to virtual product placements spent over $6, compared to 45% for the TV spot only audience.

That’s a 22% lift in consumption and 11% increase in spend! Utilizing virtual product placement to complement traditional formats such as TV ads and accelerate campaign performance can be a great way for brands to maximize the power behind their media spend and see effective results.

PARTNERING WITH THE EXPERTS IN VIRTUAL PRODUCT PLACEMENT

As the world’s leading virtual product placement platform, Mirriad can provide brands access to 4000+ hours of content and 10,000+ ad opportunities. Work with us to solve today’s biggest media challenges and join a new era in advertising.

Want to learn more about how virtual product placement is created, how it performs, and why brands around the world are investing? Check out our related blog post: What is Virtual Product Placement and What it Means for Advertising