Robert Cookson Ft.com 09/29/14
Universal Music Group is set to enable advertisers to superimpose brands into music videos after they have been made, in a move that will allow product placements to be targeted at specific audiences.
The world’s largest record company will announce on Monday that it has struck a deal with MirriAd, a UK technology start-up that has developed a way to insert different brands into video footage even after filming has taken place.
The technology allows product placement to take place on a bigger scale than was previously possible. For example, MirriAd can insert different brands into the same video to suit the target audience or region. Someone watching one of Universal’s music videos in China might see different product placements to a viewer watching the same video in the UK.
Universal and MirriAd are working with Havas, the French advertising group whose clients including LVMH, LG, and Coca-Cola.
While product placement has existed for decades, traditionally it took place during production. As a result deals could take months or years to negotiate as advertisers and media companies quibbled over how the video should look.
One of the first results of the deal with Universal will be to insert Grand Marnier, the liqueur brand, into a video by Avicii, the Swedish dance music producer. Once the Grand Marnier campaign is finished, Universal will be able to open up the video to other brands – something that was impossible with traditional product placement techniques.
Advertisers spent an estimated $8.25bn on product placement worldwide in 2012, according to PQ Media, a research group. The vast majority of paid placements take place in TV and film, but they are increasingly finding their way into online video and video games.
People have become increasingly accustomed to skipping or ignoring online advertising, so advertisers have sought new ways to embed themselves within popular content.
“Being inside content is more valuable than being outside content,” said Mark Popkiewicz, Mirriad’s chief executive.
The music industry is no stranger to product placement, though it has traditionally been built into videos from the start.
Lady Gaga’s video “Telephone” features 10 different brands, including Virgin Mobile and Diet Coke. Though the video has attracted criticism for being so commercial, it has nonetheless attracted more than 200m views on YouTube.
MirriAd has developed an online platform that gives artists oversight over how, why and where a brand would feature in their music video.
Lucian Grainge, chief executive of Universal, said that the company would “ensure that artists’ and brands’ interests are aligned”.
Advertising has become an increasingly important source of revenues for the music industry, as recorded music sales have halved since 2000. Digital music streaming services such as YouTube, Pandora and Spotify derive much of their revenues from advertising.