From James Bond to Superman: Is Product Placement the Next Wave of Advertising?

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When the young hero in E.T. created a trail of peanut butter candies, he did much more than just lure a shy little alien out of the bushes. That iconic moment in the 1982 blockbuster began the transformation of product placement into a multi-billion dollar business. Originally, E.T.’s filmmakers approached Mars, Inc. for permission to use M&Ms in the scene, but Mars passed. Mistake…big mistake. Not only did the film catapult Reese’s Pieces’ popularity – sales reportedly increased 65% within three months – it also turned product placement into a major source of revenue for filmmakers. (Ironically, Hershey never paid for the privilege of appearing in E.T., although it did strike a $1 million promotional deal with E.T.)

Today, brands pay big bucks to place products in media – about $8.25 billion in 2012, a number that is expected to double by 2017. Many marketers see product placement and brand integration as the future of advertising. Heineken alone reportedly paid a whopping $45 million for only two cameos in a recent Bond film (about a third of the film’s production budget). And totals nearing $200 million were shelled out for appearances of brands and products in a number of recent films including Man of Steel and Bond flicks. It is not surprising that entire agencies exist that are dedicated exclusively to product placement. And there are even Oscar-like awards, the Brandcameo Product Placement Awards, which honor brands and products in films.

How do brands get “airtime?” Product placement involves an appearance of a branded product or service in the set or scene of a movie, TV show, or other media, typically in exchange for payment. So when characters on House of Cards fiddle with their Apple and Samsung devices, the manufacturers have supplied products (and possibly cash) for the airtime privilege. Another avenue is through brand integration, which involves weaving a brand into the thread or dialog of the show: an episode of Modern Family built around an acquisition of an iPad.

Brand owners that pay for product placement or integration typically get some say on how their products or services will be depicted. But brands can turn up in films or TV shows without the brand owner’s permission -- and sometimes, the owners are not happy with what they see.

Anheuser-Busch was less than pleased when a drunken airline pilot was shown guzzling cans of Bud in the movie Flight. The makers of Raid were unhappy when a can of its insecticide was used in a violent scene on The Sopranos. And the NFL clearly did not grant consent for the use of its logo throughout Concussion, a 2015 movie about the long-term effects of head injuries on pro football players.

If Anheuser-Busch, S.C. Johnson, or the NFL tried to stop these product placements, would they succeed? Several legal issues came into play including the doctrine of fair use, and whether the product placement violates the intellectual property of the brand owners. Creators of any type of content for public consumption – movies, videos, or other media – need to understand these potential legal issues if branded products appear in their films, videos or other materials without permission of the brand owners. These and other issues will be covered in more detail in Part 2, on April 25.

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Klemchuk LLP is an Intellectual Property (IP), Technology, Internet, and Business law firm located in Dallas, TX. The firm offers comprehensive legal services including litigation and enforcement of all forms of IP as well as registration and licensing of patents, trademarks, trade dress, and copyrights. The firm also provides a wide range of technology, internet, e-commerce, and business services including business planning, formation, and financing, mergers and acquisitions, business litigation, data privacy, and domain name dispute resolution. Additional information about the trademark law firm and its trademark attorneys may be found at www.klemchuk.com.

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