The Dual Effects of Product Placement on Consumer Choice

Abstract

The use of product placement has grown rapidly in recent years. While technology has made it easier for viewers to avoid watching traditional television commercials, embedding products within entertainment offers a means by which marketers can reach their audiences. Though research has examined the executional factors that make product placement more effective in driving recall, recognition and attitudes, the way in which product placement affects consumer choice has not yet been examined.

To this end, the authors apply a dynamic path model to experimental data to decompose the effect of product placement into two components: It's impact on initial preference for choice alternatives and its effect on how preferences are updated as consumers vacillate among the available alternatives. Consistent with previous research, the authors find that exposure to product placement can increase initial interest in alternatives from the featured brand. Yet, they also find that respondents are more critical of the featured brand when they revise their preferences for the available alternatives. They discuss the implications of product placement’s double-edged sword for marketers and policymakers.

Keywords: Branding, Product Placement, Path Model