Trendspotting: The Ads Are Coming to You

NewsWire: 7/31/21

• Marketers are increasingly turning to product placement to reach streaming TV subscribers. The product placement is more sophisticated than ever before and can now be customized to individual viewers. (Bloomberg Businessweek)
• NH: Linear TV viewership is falling, and viewership of paid, ad-free streaming services is growing. What’s a marketer to do? 
• The answer: product placement. It’s becoming not only more frequent, but more sophisticated. Just as people can be targeted with personalized commercials during ad breaks, they can now be shown personalized products during a series, too. Products may be digitally swapped out based on viewers’ tastes. A character drinking Sprite, for example, could be shown enjoying a Coke instead. According to researcher PQ Media, global product placement spending is projected to rise 13.8% in 2021 from a year earlier--compared to an increase of only 5.9% for overall marketing spending over the same period.
• In some cases, the line between ads and programming is getting really blurry. Subway is a good example. It was featured in a storyline in Netflix’s hit To All the Boys films as well as in multiple series on NBC, ABC, and CBS. It’s also a huge presence in Korean dramas, where characters regularly fall in love or have business meetings over subs. This level of product placement recalls the early “sponsorship” model of TV, when TV shows were basically run by cigarette companies. (See “Who Watches the Ads?”)

Did You Know?

• New Year, New Gear. Last year, back-to-school shopping included atypical items like desks and headphones. This year, kids are gearing up to return to in-person schooling for the first time since the pandemic began, and that means new supplies and new clothes. The National Retail Federation estimates that families of school-aged kids will spend an average of $849 on school items, up almost $60 from last year. Families of college students are expected to spend an average of $1,200, an increase of $141. With expanded child tax credits hitting bank accounts recently, parents have some extra cash on hand. Overall, back-to-school and back-to-college spending are expected to hit all-time highs of $37.1 billion and $71 billion, respectively. The categories set to see the biggest spending increases are electronics and clothing. This is great news for retailers, particularly because families are expected to start their shopping earlier than usual this summer due to fears of supply chain shortages.