How Much Is Product Placement Worth?

In late October, Peter Gardiner, the media chief of Madison Avenue's Deutsch agency, found himself gambling millions of a Bank America ad budget on an unusual TV deal. The project—a 17-day-long product- placement and ad package involving four TV networks—NBC, Telemundo, MSNBC and CNBC—and NBC's affiliated stations.

Because the stakes were so high, without any explicit guarantee of how many times the bank would be plugged, Gardiner ordered a special study that analyzed every hundredth of a second of coverage. It included every detail of how, when and in what context Bank of America was mentioned or shown by the TV outlets.

Ultimately, Bank of America made a killing, netting millions in traditional ad value. But the white-knuckle experience left Gardiner wondering if there wasn't a better way to craft such deals.

By “brand mentions,” Nielsen means any time a brand is seen or heard on TV, including all forms of advertising, promotion and product placements. Nielsen estimates 15% of those mentions are some form of product placement, meaning a brand or product was integrated into the content of a show, such as someone on Seinfeld offering a Snapple. Currently, this 15% of product placements is not explicitly paid for by advertisers. But if that 15% were converted into current ad values, it would equal a $9 billion marketplace.

And that's before Madison Avenue really gears up for the business, which many insiders believe will grow as conventional forms of TV advertising—mainly the 30-second commercial—suffer fallout from DVRs and VOD.

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