Virtual Product Placement White Paper

1. VIRTUAL PRODUCT PLACEMENT
IS READY FOR ITS CLOSE-UP

2. Brand integration is officially coming of age driven
by the explosive growth of virtual product placement
(VPP). Finding new ways of monetizing content and
creating global brand integration has proven
valuable to brands and networks.
In May 2022, as consumer and technology advances
came to a head, the idea of “in-scene advertising” took
a momentous leap forward.
At that year’s IAB NewFronts, the digital advertising
and content showcase for brands and media buyers,
Amazon Prime and NBC Peacock executives took to
their respective stages to introduce their individual
Virtual Product Placement (VPP) ad formats. The
resulting news coverage was in every major trade
publication.
SETTING THE SCENE
THE IDEA IS AS OLD AS MOVING PICTURES — BUT AI TECHNOLOGY
IS REWRITING THE SCRIPT FOR THE FUTURE OF ADVERTISING
2

3. PRODUCT PLACEMENT REVENUE IN FEATURE FILMS & TV SERIES
VPP sounds simple as a concept. It’s
the digital insertion of a brand’s product or
image into the content instead of waiting
for a commercial break in the movie,
scripted series, or sports event.
New York-based independent
insights researcher Radicle
Insights projects that VPP
could unlock $6.6 billion
across TV and Film in 2023,
accounting for nearly two-
thirds (63%) of the U.S.
brand integration market.
And that’s just the beginning.
3

4. VPP’s value is more than revenue
potential. VPP has a role in the changing
nature of content creation, viewing habits,
and how advertising builds brands and
provides purchase lift. VPP can even
promote more sustainable practices from
Hollywood to Madison Avenue.
More advancements are being made
to the product placement industry in
2023 than in the last hundred-plus years
combined.
4

5. On the surface, VPP is as easy to explain as
conventional product placement. A marketer pays
for their brand’s goods to appear in a film or TV
production in an agreed-upon location for a
specified amount of screen time. With VPP, the
product is inserted at any point after the production
process ends.
For the last 24 years, VPP has primarily been an
experimental complement to product placement.
Historically, brands used VFX technology to place
products in scenes digitally mainly because
commitments needed to be fulfilled. But the
technique is rapidly evolving.
Today, digital and programmatic buying dominates
advertising. VPP is a powerful underutilized tool for
targeting individual consumers and customizing ad
integrations.
WHAT IS VIRTUAL PRODUCT PLACEMENT?
5

6. More and more movie and TV productions are
including plans that leave room to insert products after
production has wrapped. AI software can scan footage
to identify locations for brand and product insertions.
“It is not the actual placement that is exciting. What
is revolutionary is the fact that the new technology
allows brands and networks to do this at scale,”
added Roy Taylor, Chief Executive Officer, and Founder
of Ryff.
6

7. Algorithms can even predict
how well a considered VPP
will perform against a video
stream’s audience.
“We can take any bit
of content and insert a
product into it whether
it finished wrapping five
minutes ago or is 10 years
old,” said Garry Edwards,
Chief Strategy Officer of
Ryff. “Our starting point
is discovering content,
regardless of whether it’s
a major movie release,
a TV show, a televised
sporting event, or a
TikTok.”
7

8. $6.6 BILLION
Projected virtual product
placement spending on TV
and film productions — that’s
63% of the total U.S. product
placement market
(Radicle, October 2022)
61%
61% of marketers pointed to
product placement’s power to
drive deeper engagement with
desired audiences
(Advertiser Perceptions, VAC Report, April
2021)
VPP BY THE NUMBERS
45%
45% of marketers said product
placement humanizes a brand
(Advertiser Perceptions, Video Advertising
Convergence Report, April 2021)
63%
63% of viewers expressed the
urge to purchase a product
when they saw it featured in a
TV show. predicted earnings
(Radicle, October 2022)
8

9. THE EVOLUTION OF BRAND INTEGRATION
From the dawn of cinema marketers discovered
the value of using content to reach large groups of
people. Since then, product placement has
primarily remained the same, but there were
milestones along the way for this marketing art
form.
One of the most frequently cited examples came in
1982 when Reese’s Pieces took their star turn in
Steven Spielberg’s E.T. the Extra-Terrestrial. Within
two weeks of the movie’s release, sales of the
candy tripled.
It was a game changer for Reese’s that almost
didn’t happen. In the original script, E.T. was
enticed by M&M’s, but Mars balked at funding a six-
week pre-publicity tour. Hershey’s decided to pony
up $1 million, and Reese’s got the role of a lifetime.
9
©E.T. the Extra-Terrestrial/Universal Studios

10. A more recent example is the 2020
Oscar winning South Korean movie,
Parasite, featuring a cameo from a
small Spanish potato chip maker
whose sales skyrocketed to the point
where they needed to add
employees to their workforce.
Bonilla La Vita was
shocked to see their
sales surge by 150%
due to its product’s
minor appearance in
the film.
© Parasite/Barunson E&A Corp.
10

11. VIRTUAL INTELLIGENT PRODUCT PLACEMENT™
“Our approach to advertising is simple; we insert brands into any
content. And to do that, we use innovative tech that can detect locations,
identify talent, understand audio, derive intent, and recognize emotion.
We call it Virtual Intelligent Product Placement™.”
- Roy Taylor, CEO & Founder, Ryff
11

12. Once ingested into Ryff’s
system, its AI platform scans
thousands of metadata points
for locations where a brand
image can be featured naturally.
It understands both the content
and the context, assessing the
right moment to integrate a
product seamlessly.
12

13. Manual product placement is the
leading cause of continuity errors.
VPP is more seamless and less cumbersome than
conventional product placement and ads can be
tailored to individual demographics.
13

14. VIEWING PATTERNS TAKE
A PERMANENT SHIFT
Even before the pandemic, video
consumption habits were undergoing a
dramatic transformation. Those patterns
have continued.
Nielsen’s January 2023 numbers indicated
heavier TV usage, particularly for sports
and broadcast content. Overall viewing was
up 1.3% over December 2022. Broadcast
content viewing rose 2.1% in January, led
by a 55% jump in live sports watching.
The lockdown period was not a blip in the
rebalancing of streaming, cable, and
broadcast viewing; it was a paradigm shift
in video-watching behavior.
VPP: THE STARS HAVE ALIGNED
14

15. “Television is experiencing a
tsunami of content that we’ve
never seen before,” Ryff’s
Chief Content Officer, Marjolein
Duermeijer, said in response to
the question of “why now?” for
VPP. “TV has ushered in a new
renaissance of creativity. This
is why the industry is looking
for a new way to make money,
especially for the long digital
tail, which is becoming much
more lucrative.”
15

16. VPP AMPLIFIES
TRADITIONAL ADVERTISING
The dynamic, real-time, contextual nature of
VPP can connect context and mindsets
between advertising and an audience,
unlike other formats.
“Virtual product placement is a
strategic addition to a holistic
video ad campaign that allows
advertisers to optimize along
the way,” said Andrew Cole,
Amazon’s product marketing
manager, in a September 2022
blog post. “Marketers can
execute an integration, take
stock of its success within the
scope of their overall strategy,
and calibrate their campaign and
future placements accordingly.”
16

17. VPP BRIDGES THE BRANDING AND
PERFORMANCE MARKETING GAP
Describing the role of VPP as a “fractional
advertising” tool might make these offerings sound
small — quite the opposite. Consider the impact of
generative AI on advertising and marketing. Tech like
ChatGPT and Microsoft’s surprisingly relevant AI-
powered Bing search engine has captured everyone’s
attention with lightning speed.
Highlighting a product in a movie, TV show, short-
form social video, or live sports event delivers
highly engaged audiences. Approaching VPP as
fractional advertising provides marketers
with the ultimate flexibility of product localization,
compliance, and brand safety.
17

18. VPP can inspire a positive reaction
and drive sales when it’s part of the
entertainment because even a subtle
appearance will remind viewers of
something they want.
The value of VPP will continue to grow. Conventional
ad units increasingly experience “banner blindness” as
consumers have grown accustomed to skipping ads.
According to Radicle Insight’s report, content providers’
ability to reach audiences in traditional channels has
steadily declined for two decades. As a result, brands
and ad agencies are not earning the Gross Rating
Points (GRPs) they need from networks. VPP provides
a solution for marketers and media buyers who worry
about wasted ad spending,
18

19. “GRP is important for digital and
mobile marketers to compare and
coordinate linear TV and digital
advertising campaigns. Since VPP
creates new ad inventory from
catalog, it has become a highly
appealing method for TV networks
to deliver GRP for brands and their
agencies,” Ryff CEO and Founder
Roy Taylor says.
In traditional TV ad buying, the agency bets its
brand’s money that a program will hit a specific
CPM (cost-per-thousand) as reflected in rating
points. A “make-good” or reimbursement to the
media buyer is due when a show fails to hit that
benchmark.
ANNUAL REVENUE
OPPORTUNITY
19

20. But what about when a show becomes an
unexpected hit? The first season of Paramount’s
Yellowstone had little brand placement.
“Ryff can go back to season one
of Yellowstone and say to an
advertiser, ‘You’re now in season
three. But we can get you back
into seasons one and two so that
you can reach new people who
are binge-watching and catching
up.’ That additional functionality
is pretty exciting to offer to
advertisers,” explained Taylor.
20

21. Not only does VPP allow for flexible dynamic solutions
and additional revenue opportunities, but it also
creates an important side benefit; it lessens the
carbon footprint of content productions. Green
productions are becoming a heightened priority for the
film and TV industry. In fact, production studios have
publicly committed to reducing the negative
environmental impact of their operations.
“Some studios, like Apple, are setting the
standard as every single one of their productions
must receive our green seal,” said Jay Jasinski,
Managing Director of the Marketing & Campaigns
Environmental Media Association (EMA).
In 2021, major movie productions had a carbon
footprint of over 3,000 metric tons each. The
Environmental Protection Agency (EPA) says that
waste equals more than a regular car driving
7 million miles.
VPP AND SUSTAINABILITY
Traditional product placement is part of the problem. The
cars, computers, and beverage cans used in conventional
product placement could create a small landfill. VPP is a
comparatively eco-friendly choice.
21

22. Virtual Product Placement (VPP) is a rapidly
growing trend in the advertising industry. It is a
cost-effective, flexible, scalable solution for
brands to organically reach their target
audience without compromising their viewing
experience.
Advancements in technology have made VPP
more realistic and seamless, blurring the line
between content and advertising. The
prevalence of streaming TV has also made
VPP more appealing, as viewers are no longer
subjected to traditional commercial breaks.
The advancements in AI and ubiquity of social
media have made VPP a more customizable
and targeted option. Brands can reach specific
demographics and regions, further
enhancing the effectiveness of their advertising
campaigns.
CONCLUSION
22

23. VPP offers a promising opportunity for
brands and networks to reach their
target audience in a cost-effective and
non-intrusive manner. With the right
approach, VPP can help increase brand
awareness and engagement while
enhancing the viewing experience for
audiences.
“To ensure the success of VPP,
product placements should be
seamlessly and authentically
integrated into the content.
It is essential to maintain the
integrity of the content,”
explained, Roy Taylor, Founder
and CEO, Ryff.
23

24. For more information contact info@Ryff.com
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