The Influence of Warnings on Product Placements

ABSTRACT - In recent years, product placements have become increasingly common. Public policy analysts have suggested that such subtle promotional strategies could deceive/misinform consumers and have called for the inclusion of warnings to alert viewers about the incidence of product placements. This study investigates if such warnings have any detrimental effects on the placed brands. The results show that the inclusion of a warning enhances recall but has no impact on the liking for the placed products. These findings suggest that the warnings might be counter-productive as they help the advertisers rather than protect the consumers.

Citation:

Michelle Bennett, Anthony Pecotich, and Sanjay Putrevu (1999) ,"The Influence of Warnings on Product Placements", in E - European Advances in Consumer Research Volume 4, eds. Bernard Dubois, Tina M. Lowrey, and L. J. Shrum, Marc Vanhuele, Provo, UT : Association for Consumer Research, Pages: 193-200.

European Advances in Consumer Research Volume 4, 1999      Pages 193-200

THE INFLUENCE OF WARNINGS ON PRODUCT PLACEMENTS

Michelle Bennett, University of Western Australia, Australia

Anthony Pecotich, University of Western Australia, Australia

Sanjay Putrevu, University of Western Australia, Australia

ABSTRACT -

In recent years, product placements have become increasingly common. Public policy analysts have suggested that such subtle promotional strategies could deceive/misinform consumers and have called for the inclusion of warnings to alert viewers about the incidence of product placements. This study investigates if such warnings have any detrimental effects on the placed brands. The results show that the inclusion of a warning enhances recall but has no impact on the liking for the placed products. These findings suggest that the warnings might be counter-productive as they help the advertisers rather than protect the consumers.

INTRODUCTION

An increasingly common way to promote a product is to show the actual product or a commercial for it n a movie or television program, a practice referred to as product placement. Product placement has experienced such rapid growth in recent years that movie studios have established rates for the various types of exposure (Lipman 1991; Rothenberg 1991). Placements of branded products can be seen in several movies (ET, Lost World, Ace Ventura Pet Detective, Top Gun, etc.) and popular television programs (Seinfeld, Melrose Place, The Tonight Show, etc.).

While advertisers primarily think of product placements as an alternative strategy to promote their products, those interested in public policy are concerned about the ethical nature of this approach (Wasko, Phillips and Purdie 1993). Product placements have the potential to penetrate the consumer’s traditional defence against advertising because the consumer may not be aware that the featured product is a paid commercial insert. Therefore, several analysts have proposed that a warning precede the program/film listing all the paid placements (Jacobson 1991; Lallande 1989).

The objective of this research is to investigate the effects of including such a warning alerting viewers about the incidence of product placements in the movie they are about to see. Specifically, the impact of such warnings on memory (measured as recall) and affect (measured as liking) towards the placed products is studied using an experimental design. The stimulus for the experiment was a recent film containing over thirty product placements. Such a design has the advantages of both internal and external validityBacceptable internal validity due to the use of a controlled experiment and acceptable external validity through the use of a real-life film.

LITERATURE REVIEW

Warning Research

Given the increasing calls for including warnings alongside product placements, it is worthwhile to explore the effectiveness of warnings in other realms. The focus of most of the literature on warnings relates to the use and disposal of potentially hazardous products (Cox et al. 1997). This is understandable given that over the last century products, equipment, and environments have become increasingly complex resulting in many potential hazards. In addition, the public’s increased concern about issues relating to safety and health has played a significant role in this trend towards more informationBboth voluntarily as well as through legislation.

Most of the articles in this area discuss the social and legal environment of warnings, industry standards, or procedures involved in designing warnings. It is remarkable that although warnings appear on thousands of consumer and industrial products, little empirical research has been conducted in this area. In a recent review of literature, Cox et al. (1997) identified only about a dozen empirical studies that addressed the central question of whether the presence of a warning improved the safe use of the products. It is unclear why the marketing discipline has not rapidly embraced empirical warnings research, especially since it has a rich history of studying persuasive communications. Also, the large body of literature using information processing models and associated experimental procedures seems well suited to this research area.

Recent work in the area of warnings research attempts to overcome some of the above shortcomings by using established consumer behaviour theories and testing the emerging hypotheses in an experimental setting. A recent review of the effects of the alcohol warning labels suggests that consumers have high awareness and knowledge of their content (MacKinnon 1995). Studies have found a consistent relationship between alcohol-related communications and attitudes/consumption in non-experimental settings (Grube and Wallack 1994; Strickland 1983) but the results from eperimental studies have been inconclusive. In their experiment, Snyder and Blood (1992) found that warnings led to a boomerang effect such that drinkers perceived alcohol as having more benefits when a warning was present. Bushman and Stack (1996) found a similar effect for violence warning labels preceding television programs suggesting that the warning labels might be counter-productive. However, others have found that warning labels decrease the attractiveness of cigarettes (Loken and Howard-Pitney 1988) and music videos (Christenson 1992). This mixed pattern of results suggests the existence of variables that might moderate the effects of warning labels.

In summary, while there is significant evidence that product advertisements lead to greater perceived benefits and lower perceived risks, it is unclear if the use of warning labels influences risk perceptions or alters behaviour. Also, moderator variables that could influence the effectiveness of warning labels have not been identified.

Deceptive Advertising

An important ethical problem in the modern business environment, which has the potential to mislead consumers and injure competitors, is advertising deception. Though illegal in its most blatant forms, it can be found in a variety of manifestations that are difficult to establish as outright deception (e.g., puffery, incomplete comparisons, implied-superiority claims). In view of this, public policy analysts have noted that deception in a marketing context is not a rare occurrence (Andreason 1991). Published research has addressed a number of facets of the deception problem. Several studies have documented the deceptive influence of subtle forms of misinformation such as puffery, incomplete comparisons, and implied-superiority claims (Marks and Kamins 1988; Shimp 1978; Snyder 1989). Others have explored the cognitive and behavioural consequences of the deception (Searleman and Carter 1988) and evaluated public policy mechanisms designed to prevent or punish such deception (Ford and Calfee 1986; Wilkie 1982). Recent work by Lord, Kim and Putrevu (1997) suggests that consumers might be inoculated against advertising deception through the use of "informational priming" (providing consumers with relevant objective facts prior to message exposure), "cognitive framing" (providing consumers with a cognitive frame of reference), and attribute oriented ad copy.

The above literature is relevant to the emerging debate on whether consumers should be warned about the appearance of product placements. While advertisers seem to think that placements constitute an effective and subtle promotional tool (Sandler and Secunda 1993), consumer advocates argue that such placements are a uniquely insidious and deceitful form of advertising (Jacobson 1988). Such a concern in a movie or television program setting seems justified as several of the viewers may not be aware that the placement is a paid advertisement. When exposed to these products the viewers might believe that the character uses the product in the indicated manner, thereby suggesting that the placement setting is a reflection of reality. Such an interpretation allows product placements to undermine the consumer’s traditional defences that operate when viewers are exposed to traditional advertising. Hence, it has been suggested that a warning precede the film or television program listing all the paid placements, and the subtitle "advertisement" appear on the screen each time a placed product appears (Jacobson 1991; Lallande 1989).

Such warnings could serve as an "information prime" to inoculate viewers from subtle forms of advertising like product placements. Specifically, when viewers are warned that the movie contains product placements, they may be more attentive to such placements and find this type of advertising unethical. However, it is unlikely that viewers will have the opportunity or ability to process information deeply in a stimulus-rich environment such as a movie or popular television program (Putrevu and Lord 1998). Hence, it is unclear if warnings (found to be effectiv against ad deception) would work in a product-placement setting. In addition, recent research indicates that the college-age movie audience finds the practice of product placement to be an acceptable form of advertising (Gupta and Gould 1997; Nebenzahl and Secunda 1993).

Learning Research

Marketers have strongly opposed the mandatory introduction of warnings. They argue that such warnings would remove the illusion of naturalness surrounding the placement and hence dilute the effectiveness of this promotional approach. An alternative view suggests that product placements are most effective when they are part of an overt promotional campaign announcing the product’s appearance in the film or television program (Rothenberg 1991). There is also some sound psychological basis for expecting the warnings to be beneficial rather than harmful to the marketer’s cause.

Melton’s (1970) encoding variability theory suggests that the context in which a stimulus is processed by the consumer provides a cue for subsequent information retrieval. When consumers come across the same information in multiple contexts, they form multiple paths in memory. Each of these paths would have unique retrieval cues based on the context in which the information was processed. The existence of multiple retrieval cues makes the information more readily accessible in memory as evidenced by higher levels of recall and recognition. Several researchers have reported results consistent with this expectation. Superior recall scores have been reported for varied ad executions relative to the same exposure levels for a single execution (Unnava and Burnkrant 1991). In a similar vein, an encoding variability advantage was found in inducing resistance to competitive advertising (Unnava and Sirdeshmukh 1994). Also, the use of multiple sources or endorsers has led to deeper processing of the message than the use of a single source (Harkins and Petty 1981; Moore and Reardon 1987). The disclosure in the form of a warning is likely to provide an additional memory advantage for the placed products. Viewers who were previously oblivious to the placements are now more likely to focus their attention on the placed products.

There are counter-veiling predictions with respect to affect. Zajonc’s (1980) Mere Exposure Hypothesis suggests that placements would increase liking for the placed products. However, the stimulus-rich nature of the program setting might weaken/nullify this effect. In contrast to the health/hazard warnings discussed earlier, product placement warnings relate to upcoming ads and hence might have less negative attitudinal impact. Therefore, in this situation the memory advantages of warnings are less likely to lead to decreased affect or purchase intent.

HYPOTHESES

An important objective of this research was to identify and control for potential moderator variables in the context of warning labels. A motivational construct known to moderate stimulus processing is program involvement. Involvement affects both the amount and type of information processing. Celsi and Olson (1988) found involvement to be positively associated with amount and focus of attention, comprehension effort, and elaboration. Similarly, Petty, Cacioppo, and Schumann (1983) found that involvement determines which elements of a promotional message become the focus of attention. This study introduces program involvement as a co-variate to test its influence in the context of warnings.

From the literature cited in the previous section, it is clear that consumers read warning labels and remember their content but there is mixed evidence for the effectiveness of such warnings in inducing affect or changing behaviour (even for potentially hazardous products). Encoding variability theory suggests that warnings could potentially serve as an additional cue and thus lead to memory advantages. In the contet of product placements, this exposure to a warning is unlikely to lead to a change in affect towards the product due to the counter-veiling forces discussed earlier. Therefore, there is some basis to expect warnings to provide memory advantages for the placed products but it is unlikely that such an advantage would have any impact on affect. These arguments are formalized in the following hypotheses:

H1:The warning group would outperform the control and movie group on the recall of placed brands across each of the following exposure conditions:

a: mode of presentation (visual, verbal, or combined)

b: prominence of presentation (very prominent to non-prominent)

c: frequency of presentation (very frequent to single exposure)

d: type of exposure (long, medium, or brief exposure)

H2:There would be no difference among the three groups (control, warning, and movie) with respect to liking of placed brands across any of the following exposure conditions:

a: mode of presentation (visual, verbal, or combined)

b: prominence of presentation (very prominent to non-prominent)

c: frequency of presentation (very frequent to single exposure)

d: type of exposure (long, medium, or brief exposure)

FIGURE 1

EXPERIMENTAL STIMULI

EXPERIMENT

Design

Sample Characteristics. The sample consisted of 63 students (mean age of 20) from major public universities in Western Australia. Budget and subject-availability constraints led to the use of a student sample as opposed to a random sample from the general population. However, the use of student subjects seems reasonable for the following reasons: students constitute perhaps the largest segment of the movie-going populace, they frequently consume most of the placed products, and the film chosen for the experiment is targeted at this age group.

Stimulus. The stimulus consisted of the movie Reality Bites (1994), which was targeted specifically at the young adult segment of the population. This film provided the opportunity to explore the impact of warnings on product placements as it had thirty-three product placements embedded at various stages of the movie. The placed products included candy bars, junk food, soft drinks, fruit juices, cereal, fast food restaurants, beer, cigarettes, coffee sweetners, airfreshners, magazines, jeans, television programs, convenience and specialty retail stores, and automobiles (see Figure 1).

Procedure. Subjects were solicited from undergraduate lectures by offering them a free screening of the movie. A large dark lecture theatre was seleced and the movie was shown on large screen using a video projector to make the setting realistic. Subjects were randomly allocated to one of three treatment conditions-the control group, the movie alone group, and the warning group. Subjects in the control group (no exposure condition) completed the questionnaire before viewing the film. Upon arrival at the experimental session, they were seated, given the questionnaire, and asked to complete it without discussion. After all the subjects had completed the questionnaire, the movie was screened. The other two groups (movie-alone and warning) completed the questionnaire after watching the film. Subjects in the movie-alone group viewed the movie and those in the warning group were exposed to a warning (preceding the opening credits) listing all the placed products appearing in the film, followed by the film. Each of these two groups followed an identical procedure: upon arrival at the experimental setting the subjects were seated and when all were seated the movie was screened. At the conclusion of the film, the subjects completed the questionnaire, were debriefed, and dismissed. Subjects in all the three conditions were requested not to discuss the details of the experiment with others. There were no significant differences across groups in viewing habits, citizenship, motive for attending the screening, or the number of times subjects had seen the film before.

Measures

Recall. Recall was measured by asking subjects to list all products and companies they could recall in general. This method of measuring free/unaided recall has been used extensively in prior research (Childers and Houston 1984; Unnava and Burnkrant 1991).

Liking. Liking was measured using seven-point bipolar scale anchored by "like" and "dislike" to reflect how the subjects felt about each of the placed products. Half of the products presented in the questionnaire were distracters that served as a baseline or control. Distracters were products that did not appear in the film, and it was attempted to balance the number of distracters and placed products across product classes (see Figure 1).

Demographics and Involvement. None of the demographic variables like gender, ethnicity and age had any effect on recall or liking. Involvement with the movie was also measured using Zaichkowsky’s (1985) scale. This measure requires subjects to assess the film on twenty dimensions using 7-point scales. In this instance, the scale exhibited a reliability of .98.

Coding. The film was viewed multiple times by one of the researchers and also by three independent judges. Each recorded the branded products and companies that appeared, both visually and verbally. Each product placement was rated on dimensions of the exposure variables, i.e., visual-only, verbal-only, or both; very prominent, moderately prominent, or non-prominent; and long, medium or brief exposure duration. For each product the frequency of exposure was calculated, with each new scene constituting a new exposure. A single scene may consist of several shots e.g., the product is in the hand of a character and the shots cut back and forth between this character and another. In this study such an exhibition was counted as one exposure with the actual on-screen exposure time of the product across shots recorded as the length of exposure. A brief exposure was defined as anything less than five seconds long, and most verbal mentions fitted into this category. Medium exposures lasted between five and twenty seconds, and anything longer than twenty seconds was classified as a long exposure. Prominent placements were those where the product was in the foreground, or when the brand could be easily discerned. Moderately prominent products were more difficult to make out, often appearing smaller on the screen or more incidentally. The non-prominent products were those which required a degree of familiarity to identify, often not showing the full brand name, though the packaging would make them identifiable to those familiar with the featured brands. Finally, the plaements were coded to indicate if the character interacted with them or not. There was a high level of agreement between the four people who rated the product placements and any discrepancies were resolved through discussion and review of the placements. Figure 2 contains a complete listing of the various combinations that appeared in the movie.

RESULTS

Analysis of co-variance suggested that involvement did not interact with any of the treatment conditions nor did it alter the results relating to either of the dependent variables (recall and liking). Since involvement does not seem to moderate the effects in this context, it was dropped from further analysis. The data analysis was conducted using analysis of variance for each of the exposure conditions to test the equality of the recall and liking means across the three groups (control, movie, and warning). The results are summarised in Table 1 that provides the mean recall and liking score for each exposure condition as well as the F-values and their significance.

Recall Scores. The warning group outperforms the movie and control group on recall scores for products that are presented in the visual-only (F=1.76; p>.05), verbal-only (F=5.42; p<.01), and visual plus verbal condition (F=12.07; p<.01). Similarly, the warning group consistently scores higher on recall than the movie and control group for products that were very prominent (F=15.40; p<.01), moderately prominent (F=7.01; p<.01), and non-prominent (F=2.78; p>.05). The pattern of results is similar for the frequency of exposure variable with the warning group outperforming the other two groups for many exposures (F=17.39; p<.01), few exposures (F=4.63; p<.05), and single exposure (F=8.32; p<.01). Finally, the warning group has the highest recall scores irrespective of the length of exposure, long exposure (F=12.75; p<.01), medium exposure (F=2.78; p>.05), and brief exposure (F=7.71; p<.01). In each of the twelve conditions cited above the means are in the correct direction (warning>control, movie) and nine of them are significant at the .05 level. Therefore, H1 is strongly supported by the data.

Liking Scores. In contrast to the results for recall, the results for liking are all insignificant suggesting that the means of the three groups do not differ from each other. This holds irrespective of exposure formatBwhether the placement was visual-only, verbal-only or both; whether it was repeated several times, few times, or only shown once; whether the placement was a long exposure, medium exposure, or brief exposure; or whether the character interacted with the product or not ( F-values ranging from .02 to 3.08; p>.05Bsee Table 1). Therefore in the context of product placement, the presence of a warning did not impact the liking for the placed product. These results provide strong support for H2.

DISCUSSION

To recap, the warning group has a higher recall score than either the control group or the movie group. This result holds across almost all the exposure conditions. This pattern of results lends support for the encoding variability hypothesis that posits a memory advantage for the warning group. It appears that the warning preceding the movie serves as an additional memory cue and hence makes the information more accessible in memory. It is interesting to note that this effect is present even when the original placement is very prominent, long, and repeated several times during the movie. These results clearly show the importance of presenting information in multiple contexts, a finding also seen in recent research in the area of integrated marketing communications (Lord and Putrevu 1998). The findings emerging from this study also indicate that as far as meory/knowledge is concerned, the presence of a warning is beneficial rather than harmful in the context of product placements.

The general pattern of results observed for the liking scores indicates that the increased memory/knowledge (recorded earlier with reference to H1) does not translate into a significant change in affect. This is in direct contrast to earlier warning research that has reported both positive and negative effects of warning labels on the attractiveness of the product. The affect results observed in this study could be due to several factors. In the context of product placements, the warnings relate to an upcoming subtle advertisement and hence might have less negative attitudinal impact in comparison to a health/hazard warning. In addition, the processing environment in a movie or television program is stimulus rich and such an environment may not be conducive to an elaborate processing of the placements (Putrevu and Lord 1998). Such a stimulus-rich environment might also weaken/nullify the positive attitudinal impact of mere exposure. Therefore, one may not observe a change in affect in this situation. Finally, although the warning may predispose the viewer against the placed products, the presence of a celebrity endorser might counteract this effect.

In sum, the findings from this research suggest that the presence of a warning preceding the film leads to a memory advantage for the placed products but has no impact on the liking for the same. Also, the effects of warnings were not moderated by program involvement. From a marketing perspective the results are very encouraging. If the primary objective of the marketer is to enhance brand awareness, the introduction of a warning is actually beneficial. In addition, the attitudinal impact of the warning seems weak or non-existent, a result that would be welcome to advertisers who might face mandatory warnings in the near future. From a public policy perspective, the findings are of some concern. The primary objective here would be inoculate viewers from this subtle form of advertising and call forth their well-developed defences against advertising. The finding that warnings lead to higher recall of the products and have little or no impact on liking indicates that the warnings might be counter-productive. In this instance, warnings could be helping the advertiser’s cause rather than protecting the consumers. However, the results of this research should be treated with some caution as this is an initial and necessarily exploratory study.

FIGURE 2

PRODUCTS APPEARING IN REALITY BITES

TABLE 1

INTERACTION EFFECTS BETWEEN TREATMENT AND EXPOSURE VARIABLES

LIMITATIONS AND FUTURE RESEARCH

The subjects were university students. While students are potential users of most of the products placed in the movie, they are not representative of the larger consumer population. Subjects were not chosen at random, only those interested in watching the free movie participated in the experiment. The small sample size (n=63) further limits generalizability. Respondent fatigue and time constraints led to the use of a single-item scale to measure liking.

Replication across multiple settings (movies, television programs, etc.) and using random samples is required to either confirm or refute the findings of this study. Future research could explore the impact of delayed measurement on the dependent variables. The identification of moderator variables that might influence these effects would also be worthwhile. Possible candidates include the viewer’s state of cognitive arousal, brand familiarity, and product/movie topic fit. One could also explore the effects of different types of warnings to determine if the design of the warning could have an impact on the dependent variables. A related question would be to assess if the inclusion of the warning has any effect on the sales of the placed products.

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