Why all the hype over product placement? Because its a win-win situation.
When done well, product placements provide:
1. The ad industry with a powerful medium to showcase their product & illustrate the different use case scenarios of the product. Displaying the product and demonstrating its use case scenarios, is a powerful combination to introduce and promote a product.
2. The media/content creators now have an additional source of revenue that they can tap into. All kinds of producers from amateur content creators to hollywood producers stand to benefit from the extra cash that product placement brings in.
3. The viewers are entertained without interruptions and intrusions. This is great for the viewers. At the same time, they are aware of the cool products that were featured in the movie. When the entertainment is enjoyable, a well placed product has high brand retention.
Anyway you look at it, product placement is a win-win situation for both the viewers and the ad industry.
Ofcourse, this argument holds only when the product is placed well in a non-intrusive non-annoying way. Done recklessly product placement could be as much or more annoying and intrusive than the 30 second ad spot.
Such a valuable ad medium has to be protected and used correctly. Ad companies and media creators shoot themselves in the foot when they recklessly do product placement. They should become aware of this and preserve this ad medium so this entire ecosystem of ad industry, content creators and viewers continue to do sensible business and expand the ecosystem.