Hollywood's Blockbuster Role for Product Placement

(page 2 of 2)

Browse Issues

Browse the BusinessWeek Archive

Story Tools

• post a comment
• e-mail this story
• print this story
• order a reprint
• suggest a story
• digg this
• save to del.icio.us

Igielko-Herrlich spends one week a month in Los Angeles, where a 17-person office headed by a pair of former studio executives goes through some 600 movie scripts a year. For a retainer that he will only say is less than $1 million a year, Igielko-Herrlich's team seeks out places where a client's new products can be seen on screen as a key element of the plot. "If it looks like a billboard, no one will notice it," he says. "And if it's an obvious product placement it looks like a commercial that will turn viewers off." A big success, he says, was last year's Transporter 3, in which actor Jason Statham drives an Audi A8 through much of the movie.

The cash-strapped movie studios naturally want to get as much out of placement deals as they can. While sponsors typically pay $50,000 or more to get their products showcased in music videos (themselves a form of advertising), filmmakers are more circumspect, perhaps fearing that taking money to stick a product in a movie might seem crass. For several years studios have accepted free products and services as currency. For example, Igielko-Herrlich says, Nokia provided free phones and service to the crew of Star Trek.

But with marketing costs exploding, studios have been offering companies exclusive rights to be in a film if they agree to help promote it. (In most cases, the ads jointly market the film and the product.) Industry insiders say Nokia and its telecom partners committed $5 million to help promote Star Trek all over the planet. "Marketing support is the holy grail," says LeeAnn Stables, a Paramount (VIA) executive who helps broker product placement deals. "And [Igielko-Herrlich has] managed to bring his clients along on the idea that sometimes they have to spend to be our partner."

Given the huge outlays, companies aren't shy about demanding plenty of screen time for their gear. Some are pressing product-placement shops like Propaganda to get actors to mention their product by name. In last year's The Dark Knight, Batman's butler Alfred, played by Michael Caine, jokes that the Lamborghini that Propaganda says it managed to get woven into the plot was "much more subtle" than the Batmobile.

In the 2007 blockbuster Transformers, Igielko-Herrlich says his crew worked with the production to have a Nokia phone turn into a tiny, evil robot. The dialogue even included characters' impressions of Nokia's technology. "You have to respect the Japanese," says one. Then another character corrects him, saying: "Nokia is from Finland."

With more and more brands looking to place their products in movies, competition is fierce. Korea's LG, say the same insiders, agreed to spend $10 million on marketing to get its handsets into the new Transformers, doubling Propaganda client Nokia's bid. (LG would not confirm this.) And sometimes, like any actor, a Propaganda client is left on the cutting-room floor. Igielko-Herrlich still doesn't know whether an MV Agusta motorcycle will appear in Paramount's August release of G.I. Joe. "We have to wait like everyone else," he says.

Grover is Los Angeles bureau chief for BusinessWeek.

Business Exchange

Track and share business topics across the Web.