The reason virtual product placement (VPP) is generating plenty of industry excitement is the fact that it offers the potential to monetise both new and archive content. However, VPP also brings with it a number of challenges, writes David Davies.
Any technology can reasonably be said to have achieved widespread recognition when it begins to cross over from trade to general media. This has certainly proven to be the case with virtual product placement (VPP), which has been racking up the headlines in publications as disparate as The Daily Telegraph (UK) and Deadline during the last few months.
When viewed from the outside, there is no shortage of reasons to suspect that VPP stands poised to be the ‘next big thing’. Enabling imagery relating to paid-for products and brands to be placed into content during the post-production process, VPP opens the door to a fresh domain of monetisation that encompasses both new and archive content. Of course, there are limitations to the types of content to which VPP can be applied – historical dramas and documentaries, in particular, are always bound to provide scant opportunities for retrospective advertising.
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But with contemporary drama experiencing a golden age, and sports continuing to be a solid banker, there is plenty of scope for VPP to become a major market force. With a recent report from insights firm Radicle estimating the overall opportunity to secure addressable revenues from film and TV libraries in the US alone to be $6.6bn, it felt like a timely moment to explore the creative and commercial opportunities of VPP.
VPP: ‘It gives brands a lot of opportunities’
As a former executive at major media companies including Discovery and Endemol Shine, Marjolein Duermeijer brings a wealth of creative and commercial experience to her role as Chief Content Officer at Ryff. Founded in 2018, Ryff’s evolving platform (an alpha version was launched last year) uses AI technology to analyse content in great detail, detecting artefacts such as objects and surfaces that could be used as canvases for advertising. The resulting opportunities are then presented to brands, who can use them as part of structured campaigns that are considerably more ambitious than conventional 1-2-1-style placements.
Duermeijer neatly summarised the dichotomy – huge monetisation opportunities but attached to some notable technical and logistical hurdles – that characterises the current phase of VPP’s development. “There are always challenges with content,” she said. “It’s not a question of there being a favouritism in terms of scripted vs scripted, or factual vs non-factual; we take everything from scripted through to influencers. But the biggest challenge as the industry is so new is dealing with the rights situation.”
In the same manner that the advent of digital media prompted a protracted wave of legal manoeuvres to address existing content that was produced at a time when those new services hadn’t even been envisaged, VPP also brings challenges if it is to be applied retrospectively. Moreover, there can be a whole range of challenges to negotiate: “When huge talent is involved, the [rights holders] might be more cautious if they aren’t entirely clear on the restrictions. They might also [steer away from some content in favour] of that material where they have 100% of the rights.”
The rights landscape for VPP will surely gain clarity over time, and with that there will be numerous emerging opportunities. One of the specific areas highlighted by Duermeijer is in localisation, where the limitations of traditional product placement have become increasingly evident: “Content is globalising more and more, but that brings in challenges as well as opportunities. Advertising regulations in different countries is one example, and it’s reported that some studios are filming content twice – once with product placement, once without.”
Instead, VPP proposes a more flexible approach to placing products at later stages of the production process. This could be especially useful in the monetisation of TV talent shows, where the initial heats often take place long before the final sponsorship deals attached to the live shows have been confirmed. The potential for more consistent content advertising packages isn’t hard to ascertain.
“Product placement always used to be about matching one product with one show, but [with VPP] you can place products in lots of different locations and programmes,” said Duermeijer, adding that the Ryff platform’s “funnelling” of the various possibilities to brands and creative teams will “give them a lot of freedom”.
VPP: ‘Reaching lost audiences’
Mirriad is another fast-rising VPP specialist that puts innovative AI at the core of its platform, which can connect brands and audiences across linear TV, digital and behind subscription paywalls. One of the main components of its messaging – evoked in a recent white paper entitled ‘The Lost Audiences: Regaining Control’ – concerns the role that VPP can play in “reaching lost audiences in a fragmented media landscape with scalable in-context brand integrations”.
Stephan Beringer, CEO of Mirriad, charts the development of the company as it’s now directed to a recognition that “we wanted to be driving the move to the enablement of a marketplace, which is based around content and means that when you look at how media is being bought – both linear and digital – [you understand that there] is technology in play that you have to acknowledge and work into.” So that has been a driving force “as we have built our platform around the core technology.”
In Mirriad’s case, that core technology is a patented AI, ScreenFinder, that can analyse thousands of hours of video to identify the ideal, “contextually relevant moments for brands to connect with audiences”. The entire advertising solution is then executed in post-production, “making it easy to deploy and scale – maximising exposure and driving higher brand value”.
In terms of building a marketplace for VPP, Beringer confirmed the importance of cultivating alliances with all stakeholders – creative and commercial. “It is obviously very good to build relationships with content owners, but that will only go so far if you don’t have demand coming from agencies and their clients, because otherwise [it risks being] a theoretical conversation,” said Beringer. Hence the company’s ongoing strategy of “mobilising brands, advertisers and agencies to ultimately [help establish the pathway] for the content industry to get onboard with this.”
VPP: A rising revenue star?
Like Duermeijer, Beringer acknowledged the “huge current interest” across the board in VPP, even whilst the market is in a fairly early phase of its history. Similarly, he emphasised that maintaining quality of the end-result will remain critical as VPP matures: “The human eye is unforgiving and will realise something has been ineffectively integrated if the job isn’t done well.”
Still, if the rapid emergence of some extremely innovative specialists is anything to go by, the technology environment underpinning VPP is already looking impressively robust. In a fragmented media landscape in which generational changes provide a particularly significant challenge, there is no doubt that content owners will be seeking – perhaps more determinedly than at any time since the beginning of digitalisation – new methods of revenue generation.
In this context, the innate flexibility and scalability of VPP renders it one of the strongest candidates for forging durable future connections between brands and audiences. It will be fascinating to see how it develops over the next 2-3 years.
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