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How to: Product placement on Instagram

Product placement is, without a doubt, a common strategy in the field of marketing. But while just a few years ago products were more commonly placed in traditional media, such as cinema or television, today many advertisers mainly rely on social media, because this offers a more dependable and significant way to increase both brand awareness and audience loyalty. Read the Kolsquare blog to find out more about product placement on Instagram.

Two women promote a makeup palette
Two women promote a makeup palette

Product placement is a popular and effective way to promote products and increase your brand’s visibility by providing an alternative to the structure of traditional advertising. In fact, it is a $23 billion business and growing. As a result, social media platforms themselves have already developed features that allow product placement and direct links to web stores. But more on that later.

However, advertisers are walking a fine line when it comes to product placement. On the one hand, product placement must be pointed out and declared to avoid accusations of surreptitious advertising. But on the other hand, subtlety is crucial when advertising as it increases viewers’ likelihood of buying a product.

The basics of product placement in general

There are various definitions of product placement that can be found in the scientific literature. But the term was most accurately described by Mallick, who included the notion of profit-making to the commonly found explanations. Consequently, he defines product placement, as “the targeted and deliberate placement of products and services, brands, company names, company services, and categories of goods and services in the editorial section of a mass medium, especially in broadcasting, mass-communication telemedia, the press, and motion pictures, with the aim of generating economic profit” (Mallick 2009: 31).

Product placements can be part of the creative decision-making process for a project, but also contribute significantly to its financing. PS Welt, for example, published the pertinent headline: “James Bond is actually a car salesman”, because the British car manufacturers Aston Martin and Jaguar Land Rover are some of the foremost suppliers of the world’s most famous secret agent. Transparency for the viewers is rather lacking in this context, because they usually do not receive any information about whether this product placement is paid or unpaid.

This further cements the idea that product placement is not a new marketing strategy. The 1982 blockbuster E.T. gave it a significant boost, and Home Alone and Cast Away also deserve to be mentioned in this context. Still, never has it been more attractive (and necessary) to rethink one’s marketing strategies. While streaming is gaining popularity, traditional TV and print ads are losing relevance as consumers increasingly avoid these forms of media.

It stands to reason that product placement is paid for just like any other type of advertising or promotion, although brands today can of course work in collaboration with influencers. Besides big cinema productions, celebrities are suitable for collaboration, but the engagement rate is significantly higher with influencers, especially nano- and micro-influencers.

According to Market Watch, Kylie Jenner may well earn more from one Instagram post than some do in their entire lifetime. She is reported to have received $1.27 million for her makeup collab with the Grinch movie in November 2020. Considering that by May 2022, the post had been viewed more than 1.6 million times, that wasn’t a bad deal (ROI not calculated in detail here).

Opportunities and risks of product placement: The legal standpoint

The website TrendHero, for example, describes product placement as hidden advertising. This is because influencers integrate products into their normal content. It has been shown that “advertising that doesn’t look like advertising works best.”

At the same time, however, European member states must all follow certain audiovisual commercial communication (AVMD) regulations, as product placement is subject to EU law. Consequently, marketers:inside should be careful and find out the relevant legislation in Europe to avoid product placement being interpreted as surreptitious advertising. This is because generally, advertising must be declared, whether it is between television programs or an advertisement found in a magazine.

From a legal standpoint, surreptitious advertising is the promotional use or mention of products without clearly indicating it as advertising. On Instagram, it is now common to either mention that a post is an “advertising video” or to make users aware by including the phrase “supported by [product name]” at the beginning of a video or under a post.

Sparksamkeits and fashion blogger Alexandra Stedman have been very clearly indicating advertising for quite some time. She uses her slides to alert users that a post contains an advertisement and also marks her content with “AD”, which stands for advertisement. In this way, it creates transparency and increases its credibility. However, this is not a subtle use of product placement.

The study “The effectiveness of brand placements: A meta-analytic synthesis!“from the International Journal of Research in Marketing proves, however, that product awareness and positive attitudes towards a product are significantly influenced by product placement. Recipient research shows that the more subtly a product is placed or used, the better. In the Netflix series Lupin, for example, the mastermind wears various rare models of shoes from Nike. On the one hand, this contributes to our image of the main character, Assane Diope, played by Omar Sy. And on the other hand, it is a successful allusion to the much-hyped sneakers.

The best practices for product placement on Instagram

Instagram shopping offers lucrative opportunities to promote products and is a useful tactic to strike a balance between content and advertising . However, the products should be shown in an optimized light and an appealing web store is also crucial to increase sales. Accordingly, the product catalog must be attractively designed and regularly updated.

Each product should be described in detail and presented aesthetically. It is important to keep just one catalog. If you have several at the moment, you can simply merge them. This also applies if you have two different catalogs on Instagram and Facebook. This gives users and potential buyers a better overview of what your brand has to offer. It’s also easier to maintain, as prices and inventory should be reviewed regularly and revised accordingly. Catalog fields such as product names, descriptions, and categories are also essential.

Instagram offers a guide for your product catalog, as it is a basic tool for your Instagram store. Pro-tip: First, you should create a Business Manager account that will help you manage assets on Facebook and Instagram. Then, you can link the catalog to your account.

The product tagging feature allows you to set up a direct link to your products in Stories, Reels, Instagram Lives, posts and mentions. Consequently, those who are interested can instantly find out more with just one click. Instagram data from 2021 suggests that at least five bookmarks a month can increase product page views and therefore sales.

Product placement on Instagram

Fast Company states in its research, “Even though advertisers should use this tool from Instagram, it is still important to mention that viewers are most influenced by product placements when the product or brand name is only mentioned but not shown”. It is also advisable not to jump in with the gun. The more followers are immersed in a story or the like, the more receptive they will be to product mentions or links. This plays to the influencer’s advantage in particular, since followers have already built up an emotional relationship with the KOL.

About Kolsquare

Kolsquare is Europe’s leading Influencer Marketing platform, a data-driven solution that allows brands to scale their KOL Marketing strategies and implement authentic partnerships with KOLs (Key Opinion Leaders). Kolsquare’s technology enables marketing professionals to easily identify the best Content Creators profiles by filtering their content and audience, and to build and manage their campaigns from A to Z, including measuring results and benchmarking performance against competitors. Kolsquare has built the largest community of influencer marketing experts in the world, and offers hundreds of customers (Coca-Cola, Netflix, Sony Music, Publicis, Sézane, Sephora, El Corte Inglés, Lacoste, …) the latest Big Data, AI and Machine Learning technologies to drive inspiring partnerships, tapping into an exhaustive network covering 100% of  KOLs with more than 5,000 followers in 180 countries on Instagram, TikTok, Twitter, Facebook and YouTube. As a Benefit Company, Kolsquare has been pioneering Responsible Influence by championing transparency, ethical practices, and meaningful collaborations to inspire change.

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