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The Revolution of Virtual Product Placement

“The digital revolution is not linear,” says Ryff, the company striking back at the continued decline of television and the outdated form of advertising that accompanies it.

An upbeat tune on a crackling record-player sets the backdrop of the website’s opening video, signaling the comeback-of-the-year for TV and streaming advertisements.

The video showcases a variety of scenes depicting everyday retail shoppers, airport visitors, bakers, coffeehouse regulars, and others. Before your eyes, the video seamlessly imports brands into different environments in real time to show the power of their digital editing.

The best part? This all happened in 2019… and it was only the beginning.

What is Virtual Product Placement?

While Ryff and their main competitor, Mirriad, were early adopters of this technology, other companies soon bought into the idea of digitally importing advertised products into shows like “How I Met Your Mother” and “Modern Family.”

The TV show or movie could be shot naturally, adding in products later as brands landed new budgets or became interested in partnerships with certain shows.

With this technology, you could even do something as drastic as advertise iPhones in the Sound of Music (1965)! Not great product placement, but the possibilities are limitless.

Even more exciting is the content curation happening today and the era of “binge-watching” that invites a total revival of TV shows both new and old.

Until a recent announcement at IAB’s NewFronts event, the technology was mainly limited to logos and products implemented in post-production for companies that wanted flexibility in content and scheduling.

However, there was a glaring opportunity to upgrade, and this event didn’t disappoint in its ability to slice open the envelope for virtual product placement.

Where Can Virtual Products Appear?

In addition to the vast amount of content within a single service, the other major benefit to advertising on modern streaming services like HBO and Hulu is valuable customer data.

While those streaming services capture insights into watch history, another service is the glaring winner of this technology and can benefit immediately from dynamically importing products into their vast library of shows and movies.

Alongside NBC’s Peacock TV, Amazon Prime Video also announced in 2022 their intent to release in-scene ads for virtual product placement that not only allows users to choose their content and products, but also lets advertisers target them based on Amazon historical metrics.

This means that an advertiser like P&G could advertise any of their dental care brands in a single campaign, targeting different users depending on the brand with which they best identify.

To sweeten the deal, the custom data that Amazon Prime Video could provide would dwarf the targeting capabilities of almost any other company. Far from demographic targeting, Amazon Prime would be able to access affinity, in-market, and even retargeting segments.

How Does VPP Benefit Companies?

For companies driven by data, this new use case for high-funnel advertising changes everything.

Inside of Amazon, advertisers can now attribute ad success all the way back to a virtually placed product inside Prime Video content. They could target a vast number of audiences “natively” and could attribute success all the way up the funnel.

This technology could also lead to a bidding-based system where an ad’s placement and price is also factored into the buy and audience targeting is just as valuable as any other digital channel.

Starbucks’ Amazon Prime Video ad might be targeted based on users that have searched for Starbucks ground coffee on Amazon, but might also only allow product placement in a specific character’s hand (i.e. the “smart” or “charismatic” character).

This level of contextual targeting could spell victory for an otherwise plagued TV industry.

In fact, some late adopters of advertisements in general (looking at you, Netflix!) may be looking at an all-out company rescue based on this type of native advertising.

What is Empower’s Reaction?

Digital agencies are already set up to create profitable investment campaigns. If you can optimize targeting, placement, and bidding effectively in a social media or search landscape, this type of media buy comes naturally.

Empower’s path forward is simple: adopt this type of placement as early as possible and quickly develop best practices for the elements of this buy that we DON’T yet know (i.e. contextual placement).

Are there character archetypes that perform better for certain brands? Are there situational reasons to include or remove brands in a specific scene?

Are there common inventories that translate across content that could help frame our best practices?

With these questions answered, translation of virtual product placement into gaming and virtual reality becomes nearly effortless.

This type of advertising is long overdue and forecasts success as a “gateway ad” into a new world of profitable digital spending.



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