July 21st, 2009

Transforming the Future of Advertising

By Neil Merrett
The Age (Australia)

If life were more like an effects-laden blockbuster film, wouldn’t the world be a much nicer place? Hollywood and the wider business world are increasingly banking on it.

Take, for example, the beleaguered car industry. While in reality companies such as General Motors are seeking bankruptcy protection from the US Government, a very different story can be seen at cinemas around the world in the latest Transformers movie, Revenge of the Fallen.

The film details the exploits of the Autobots, robots that transform into various GM vehicles, as they protect humanity from their villainous, non-branded counterparts — the Decepticons.

While product placement may be nothing new —branded goods appearing in popular culture dates back to Victorian-era literature — some experts suggest the Transformers film is moving into uncharted territory for advertisers and manufacturers alike.

Steve Janisse, manager of communications for GM’s Chevrolet division, agrees, suggesting that for the company’s brands, the live-action Transformers franchise offers much more than just a lucrative shop window for its vehicles.

“From our perspective, the first movie [2007’s Transformers] was a new experience for the company,” he says. “Our cars were actually the characters and heroes of the film, getting to save the earth.”

Amid ongoing concerns over the future of General Motors’ workforce and brands, Mr Janisse suggests that being portrayed as saviours of the word — albeit fictionally — is a pleasant, if profitable, distraction.

For the latest Transformers outing the company supplied 67 vehicles to the filmmakers, with 52 cars out of this total taken from unsaleable stock such as test models.

But as part of its deal, GM brands will be associated only with heroic characters, with any vehicles representing the villains being non-specific rides such as police cars.

Although the company does not have to pay for having its vehicles in Revenge of the Fallen, it says costs associated with being in the film — such as providing vehicles for stunts and effects — were incurred more than a year before.

Mr Janisse claims that investing in such product placement deals has been extremely positive for the company. General Motors estimates that, by the time of the DVD release of the first Transformers film in 2007, 15,000 consumers had signed up for information on the 2009 Camaro concept vehicle used to portray the character Bumblebee.

After the film came out on DVD, Mr Janisse says, a special feature on the disk that showed off the real-life vehicle in detail sparked requests for more information from 500,000 potential customers.

Skip ahead two years and 23,000 of the Camaros have so far been sold, according to company figures.

Now that the latest film is in cinemas, GM has extended its marketing, focusing on giving away tickets to private screenings at its dealerships around the US, as well as offering test drives of certain cars at screenings.

The Transformers deal also allows the company to obtain licensing revenue from toys and video games relating to the use of its vehicle designs in the film.

While a third film in the series is already planned for a 2011 release, the car maker says it is too early to begin negotiations over the use of any of its vehicles in the continuing battle against the forces of car evil.

Even with General Motors facing an uncertain future since its announcement of bankruptcy in June, product placement is expected to continue to be a focus for the group in some way as it reviews all its promotional operations.

“For the most part, we don’t pay for product placement. So, compared with other forms of advertising, it’s a little less expensive,” Mr Janisse says.

But is this potential stream of income for culture and business anything new?

According to Chris Hackley, professor of marketing at Royal Holloway, University of London, even contemporaries of Charles Dickens reportedly came under pressure from companies and organisations keen to associate themselves with writers’ work; even if they did not succeed.

However, Professor Hackley concedes that in the current climate, as the price of spot advertising rises, the use of branded goods in films has become increasingly accepted by audiences and industry.

He says it remains to be seen whether there may be negative reaction from audiences in terms of tickets sales in light of General Motors’ financial difficulties.

But viewers beware: as companies look to slash their marketing budgets to cut costs, super-human consumer goods could become the next big marketing heroes.

“Product placement not only provides manufacturers a cost-effective add-on to marketing campaigns, but can also allow them to tie their goods to the escapism and passion of cinema,” Professor Hackley says.

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