“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.
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 & Danielova, 2009, pg. 47)
H3: The worth of product placement in successful films is positively related to brand equity. (Wiles & Danielova, 2009, pg. 48)
This hypothesis states the researchers’ belief that an already strong brand benefits greater from placement due to the familiarity and credibility already associated with the brand. Audiences know the brand, see the brand, and immediately focus on it during the film. The place of a product with high brand equity can also show that the firm is attempting to “deepen and enhance brand associations” (Wiles & Danielova, 2009, pg .48), which can help indicate the brands future strategy.
H4: The worth of product placement in successful films negatively related to film absorption (Wiles & Danielova, 2009, pg. 48)
The fourth theory, the researchers hypothesize on the negative effects of film placement. The researchers theorize that viewers that watch absorbing films lose the cognitive ability to take in extraneous details. The viewer loses himself inside of the film and is unaware of the products that are used, only the story line. This negatively affects the value of the placement, as the message is not delivered to the potential consumer, the viewer.
H5: The worth of...