Falling TV Viewership. Since the WGA strike, TV viewership numbers have steadily gone south while viewership for Internet shows has steadily increased.

Internet shows grow in number and popularity. Product placement and branded entertainment is moving online. We have seen a great many examples of this in the neat past.

Product Placement and Branded Entertainment might be movig online, but the most influential product placements are still on TV : American Idol, Oprah, Hell’s Kitchen, and Biggest Loser. This is however only a matter of time before Product Placements in Online Video become more powerful than the ones on TV. This is bound to happen as more and more viewers move online for their entertainment.

Its not about the dumb click anymore. Brand Equity, Creative Branding and being able to build Brand Images are concerns of the advertiser that need a solution today. The advertiser seeks some new and powerful advertisement types while the videomakers need monetization that can put more dollars in their pockets.

While the advertiser expectations are so low(just a click) from the current ad methods, he will never pay top dollar for these ads. Which in turn means that the videomaker is never going to make any decent money monetizing his video. This problem is only going to worsen as more and more professionally created content comes online. The current ad revenues will not be able to support the higher production costs of these content.

Advertisers and smart video producers are exploring sophisticated and higher paying alternatives than pre/post roll, video overlays and video banners - Product Placement.

In an excellent article, TV Week columnist - Daisy Whitney discusses how Product Placements are becoming a new trend in online video monetization. Some Interesting excerpts :

“Rising online video star Hayden Black, integrated Warner Home Video’s straight-to-DVD movie “Return to the House on Haunted Hill” into the first episode of his online video show.Mr. Black said he sold the Warner placement for an upfront fee and a CPM rate for the month of October. The episode in question, “Dr. Slasher,” has been viewed more than 170,000 times, Black said.”

“Tay Zonday, the YouTube star who rocketed to viral fame with his “Chocolate Rain” video has done Product Placements for the new Cherry Chocolate Diet Dr. Pepper drink in his new “Cherry Chocolate Rain” video. In the song he sings that he was paid a “hefty fee” for the sponsorship. The video has generated more than 2.5 million views on YouTube.”

More people are doing what Lonelygirl15, Kate Modern and Sofia’s Diary did - Product Placements in Online Video.

Read the entire article here.

Watch the video here:

The gaming industry offers us an unrivaled, vicarious and fantasy experiences, that can be sometimes profound and extreme in nature. This experience is what super-glues the relationship between the gamer and the game and provides the most involved interactivity among all entertainment media. Such a media is prized by advertisers for their ability to hold the gamer’s attention. Its no big surprise that In Game advertising and product placement is being so quickly adopted by the gaming industry as an alternative revenue source. This has also helped bring down the cost of the video game title and console for the gamer - A development that has been welcomed by the gaming community. As the gaming industry becomes more sophisticated we are going to see more innovative placements and advertisements in our video games.

Game publishers should make sure that the ads and placements are non intrusive in nature and are done in a way that actually lends reality to the scene. If they are able to do that, In-Game advertising and product placement will truly mature into a very effective alternative revenue source to the gaming industry. With studies claiming that brand retainment among gamers is around 60-65%, video games are no doubt very attractive to the advertisers. The day when ads and placements become an integral part of our video games is definitely not far away.

So whats next for Product Placement?

Enter : Virtual Product Placement.

Product placement that is done post a movie’s production is Virtual Product placement. Images of products are digitally inserted into movie frames to make them look like they belong in the original footage. This technology can be the solution to video monetization on the web. Also, would someone be able to take the entire library of Hollywood films - from silents, to musicals to the present day movies and tag them digitally with virtual product placement? If that happens what would that mean? Can the miles and miles of archived celluloid be brought back to commercial life?

Ofcourse, any new technology poses new challenges. But, I am hopeful someday an idea like this will sound as easy as coloring our black and white movies.

Here are some brave companies that are exploring this challenge :

• SeamBi
• Coull
• MirriAd

Product placement specialist firms like Propaganda GEM (P-GEM) are increasingly placing products in Music Videos. P-GEM has placed products in movies and TV shows. Sex and the City, Will and Grace and George Clooney wearing Lacoste throughout the entire movie of Syriana are some of the works of P-GEM.

As product placement moves to music videos, brand marketers are laying a lot of emphasis on “Hands-on or featured use of the prodiuct” while making sure that the product goes well with the genre of the music.

Blue Flame Marketing and Advertising is a company owned by the Rapper and hip-hop mogul Sean Diddy. Blue Flame has a long and impressive client list that includes includes Versace, Nike, Pepsi, Foot Locker, Bentley and much much more. With names like Puff Daddy, Puffy, P. Diddy and Diddy, Sean Diddy is a brand and product himself and he has blurred the line between music and products. He has truly blended his screen character, music, dance moves and his acts and antics with the many products that feature in his videos.

Hip Hop is big for product placement. New York Times on September 2, 2002 published an article : “Hip-Hop Sales Pop: Pass the Courvoisier And Count the Cash“. The mini economy of Product Placement in music videos is so alive and buzzing that one wonders if there is more to Bruce Springsteen’s -’Cadillac Ranch” and Prince’s “Little Corvette”.

Here is a video of Sean Diddy in Busta Rhymes - Pass the Courvoisier. Watch the cognac bottle.

This year was the 80th Anniversary of the Oscars. Among all the personalities that went on Stage at the Academy Awards, two were noteworthy - The beloved Nintendo Wii and the Apple iPhone. Although this was the first time iPhone and Wii went to the Oscars, they graced the stage and played a part of the proceedings at the prestigious awards ceremony.

On stage, Jon Stewart pulls out his iPhone to watch Lawrence of Arabia, then turns it sideways and comments “it looks even better in wide screen”!!

Jon Stewart showing off the iPhone at the Oscars. Feb 25, 2008.

Later on, Stewart played tennis on stage, on the Nintendo Wii with Jamia Simone Nash who starred in August Rush. Although you could hear people laughing in the background, this was a pitiful placement concept that was hardly funny. One could at best smile at the antic. Nintendo should have bargained for a better concept.!. Jon and Jamia jump around like two kids in what looks like a completely “put up” effort. Good job Nintendo, you got associated with two people who look completely stupid on stage. They probably got you looking stupid as well!

Remember my previous post - Product Placement for the sake of product placement will kill your brand! Its got to be smooth and slick.

Jon Stewart and Jamia Simone Nash play the Nintendo Wii on stage at the Oscars. Feb 25, 2008.

Product Placement has to flow with the show, otherwise you are putting your brand at risk. Here is an idea of how the Nintendo Placement could have been done well. For the “Best Special Effects” category, or something like that, you could have had the presenter use a Wii to present a virtual Oscar to the winner and have the winner receive it using another Wii handset!! Ofcourse , after the fun, you would give the winner the real Oscar and invite him to make his speech. Now, that would have been a really cool placement concept for the Nintendo Wii.

Watch the Stupid Video Clip here :

However Clayton introduces a new concept of segmenting customers(Segmentation 2.0) based on their “Jobs-to-be-done” or specific “needs”. This is based on the idea that the same customer may prefer two different versions of the same product depending on what is the specific need. To illustrate this the book cites an example of a study done at a fast food restaurant serving milkshakes. The study showed that most of the adults who purchased milkshakes in the morning purchased it to kill time in their morning commute. Also they wanted something that that will not spill on their work clothes. So they preferred thick milkshakes that will last longer and will not spill easily. Many of the same adults preferred a more fluid milkshake in the afternoon because they were typically with their kids when buying the milkshakes and they wanted the kids to drink as quickly as possible so they can go home quickly. This shows that the same adults with similar demographics preferred two types of product depending on what need they were satisfying at that point in time. A traditional segmentation method would have failed to appreciate this difference.

This new way of segmentation presents a big challenge in creating a targeted advertisement for the product. Advertisements are typically targeted towards certain set of customers based on their attributes. It is very difficult to target different needs of the same customer at different times. This requires the advertisements to tell a strong story so that they can communicate to the specific scenarios.

Product placement is one advertisement vehicle that presents this opportunity naturally. Product placement by definition is deep integration of brand or product with the content/script. If the advertiser carefully chooses the script, it can speak to the specific customer need that a product can serve to rather than a specific customer group. Customers viewing these videos sub-consciously associate the product or brand with the specific need that is being met.

Watch this video(produced by Creative Bube Tube) to see how easy it is to place products in your video.

Products placed in the video : Lifehacker, Lucky Charms & 7Up.

Looks Easy ? Exciting? Gives you Ideas of how you can make money on your next YouTube video?