Product Placement in Successful Films

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INTRODUCTION

“The Worth of Product Placement in Successful Films: An Event Study Analysis” is a July 2009 article in the Journal of Marketing written by Michael A. Wiles and Anna Danielova. The article discusses the findings of an event study constructed to show the relationship of high grossing films of 2002 with the participating firms’ stock prices.

HYPOTHESES

The researchers discuss results from past research from other scholars. From their study of previous findings, the researchers derive six hypotheses.

H1: Film product placement is positively associated with a change in firm market value. (Wiles & Danielova, 2009, pg. 46)

The hypothesis of the researchers implies a general belief that product placement in high grossing films will indeed generate increases in firms stock. The researchers believe that other factors in the film also influence the situation. These factors include: Tie-in advertising, brand equity, audience absorption, critical acclaim, and film violence. From these factors, the other hypotheses are generated.

Promotion of the product in the movie, before the film’s actual release, increases the familiarity of the product and the likelihood that the viewer will recognize the product while viewing. This recognition causes the viewer to begin to relate subconsciously the product with the film. In addition, this form of advertising shows that the firm trusts the film enough to be associated with the film. This is an investment to the product and the film. The researchers believe that this seems to have a positive impact on the value of the product leading to hypothesis two:

H2: The worth of product placement in successful films is positively related to the presence of tie-in advertising. (Wiles & Da...

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...fect prices, as there are very few buyers or sellers in the market at the time for whatever reason.

CONCLUSION

The researchers were able to hypothesize accurately the outcomes of their findings. The predictions included that there existed a positive correlation among a firm’s stock price and the success of a film, brand equity of the product, and tie-in advertising; and a negative correlation between violence, critical acclaim, and film absorption.

The researchers provided strong support in their findings to prove their hypotheses. It was shown that there is value in product placement. However, circumstances surrounding that placement may greatly influence the significance of the return.

Works Cited

Wiles, M. A., & Danielova, A. (2009). “The Worth of Product Placement in Successful Films: An Event Study Analysis”. Journal of Marketing, 73(July), 44-63.

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