5 important things for measuring product placement success
By: Jens Kuerschner
Tags: Advertising, Sales, Product Placement, Influencer Marketing, Marketing

In this post I want to show five important principles that are relevant to a proper performance and success measurement of product placement — from the perspective of advertising companies. Currently, unfortunately many of them are often not or only insufficiently taken into account. This not only leads to wrong results and recommendations, but can also lead to dangerous actions. Of course we know that this is only in rare cases because of the experts in the marketing departments. Rather, a proper success measurement is often seen as too complex that it would survive the long processes from daily business to the Jour Fixe at the C-level management.

Nevertheless, I want to push the professionalization of product placement and its performance measurement with this text. At the end you will also find specific recommendations on how to handle the issues in operational practice.

1. Look at all relevant dimensions

The success of product placement is mainly defined by three dimensions.

Cost

Since each marketing campaign must also be measured at its cost, this dimension is also for product placement of great importance. The measurement of this figure is simple.

Reach

The importance of the reach is obvious. The measurement of this figure has become significantly more difficult than it was 30 years ago in the times of internet and smartphones. Nevertheless, there are a number of instruments that can determine the reach across different channels — not as accurate as it is possible in online advertising, but usually sufficiently.

Advertising Effect

The advertising effect ultimately decides whether the combination of cost and reach has a positive or negative impact on the target audience. The measurement of this dimension is the most complicated and is often neglected.

Each of the named dimensions is equally crucial for the success and must be taken into account when measuring a product placement’s performance.

A high reach at low cost, but negative advertising effects does more harm than good. An excellent advertising effect with good reach, but prohibitive costs would be also not ideal from a business perspective.

One has to find the ideal combination. Only the combination of all three dimensions ultimately decides whether the profits of the advertising company rise.

2. Consider explicit as well as implicit advertising effects

Advertising effects appear on a conscious (explicit) as well as on a subconscious (implicit) level. While the explicit advertising effects can be relatively easily detected by so-called recall interviews, the implicit advertising effects are more difficult to detect.

In the evaluation of advertising effects, both areas are relevant. A pure explicit effect measurement would most times only verify the reach. When someone remembers a placement, this does not necessarily mean that it has also affected him in terms of his attitude or even purchase intention. The measurement of implicit advertising effects is usually done with extensive studies.

3. Consider indirect and potential reach

When determining the reach of product placement, you should not only rely on ratings and directly measurable data, such as YouTube clicks. The indirect and potential reach are just as important and relevant for product placement.

Indirect: If a product placement is accompanied by a comprehensive campaign, the contacts of this campaign should also be considered. If these were only consider separately, you would miss the immense synergies.

Potential: A movie will be re-published in various variants for many years after the first screening. A brand appearance at Fox News will no longer be relevant one year later.

4. Do not compare product placement to other advertisement with only one or two figures

If you compare product placement with other forms of advertising, you should always take all parameters and dimensions into account. In practice, some measure the value of placements often purely with the display time and compare it with commercials. Marketers respond by also taking into account the long-term reach.

Both approaches are not accurate and misleading at the end. An explicit commercial produces a completely different advertising effect and is also much less expensive to implement, as a product placement. Thus, a commercial break is possibly cheaper, but not as potent. At the end, the commercial might provide an even much worse value for money. The additional consideration of the reach might be an improvement, but does not solve the problem.

All models (that we know), which calculate an impact, advertising or media value that assigns a theoretical monetary value to the placement, are based on very few parameters and are therefore hardly relevant. Media values ​​also usually only on consider explicit attention and reach values ​​(see 2. for this issue). They are great as a supportive measure and success indicator. However, you have to be aware that the calculated values ​​don’t represent any real and proper assets. Therefore, these values​can’t be really used for comparing product placement with other forms of advertising.

In the end, product placement can be compared with other forms of advertising only when doing a clean and comprehensive A/B test. Since this is quasi impossible in practice, it is advisable to consider product placement as a complementary component of the marketing mix and not directly comparing it with completely different marketing activities. If you still want and need to compare it, you should at least take into account as many dimensions and parameters as possible.

5. Always look at the correct KPI, not only the good ones

When measuring the performance of product placement, always ensure that the right effects are correctly determined. In particular, a performance measurement should never follow the motto to only measure what looks good. As an example, let’s have a look at “Social Media Marketing”. There, the pure “Like-number” was especially in recent years often defined as a key success factor — although this value has almost no significance. With product placement it would be about a pure focus on the (un)aided brand recall. This value can be increased relatively easily and almost has no meaning, if you don’t look at more figures.

Also important is the consideration of performance indicators in combination with pre-set goals. If you wanted to only increase the attention, the brand recall is a very important parameter. However, if you wanted to primarily increase the reputation of the product and brand, the campaign may have been a total failure, although the recall value was high. Here, the recall alone as a key figure is useless.

Recommendations

In practice, one is often forced to ignore many of the described points, as the consideration would cost too much time or would be difficult to explain to other relevant departments. I want to give some recommendations, considering those circumstances.

Basically, product placement should be seen as a complementary component in the marketing mix and not 1: 1 compared with alternative forms of advertising. This is particularly important because the full potential of product placement will be unlocked when it’s accompanied by additional advertising and PR activities.

When measuring advertising effects, you should consider implicit effects at least a little. This can be done for instance by in-depth interviews. Although not all effects are taken into account in this case, gross errors and problems can be identified with this kind of research.

To be able to consider advertising effects and therefore the impact holistically, I once built Placedise. There, you could predict the advertising effects (explicit and implicit) on the basis of scientific research with big data and predictive analytics. I hope that other companies adapt this approach to offer even better solutions in the future.

In the end, it is especially important that you take into account all dimensions of success, and don’t measure performance only in terms of reach and recall values. Only with comprehensive and honest analysis, you can optimize future campaigns. Even if these findings won’t make it to the highest decision-making level in your organization, you can thereby optimize your own work and of course improve your own standing in the long term.