The increasing demand for integrated marketing communications (IMC) in modern business has led marketers to employ various media platforms for advertising appeals. One such method is product placement, which has already gained widespread usage in marketing communications. Consequently, examining the role of product placement has become a pertinent research topic in the field of marketing.
The present study is based on diverse definitions of product placement, whereupon a comparative analysis allows us to conclude that product placement serves as a marketing technique involving the incorporation of visual or graphic images, messages, brand logos, or products within entertainment media platforms such as television programs, movies, music, video games, and advergames. Notwithstanding the substantial body of literature on product placement classification, there is a lack of consensus regarding a universally accepted framework in this field. This article places particular emphasis on two classification models of product placement. Firstly, Russell's three-dimensional model encompasses dimensions related to the visual, verbal, and plot connection aspects of the brand. Secondly, Gupta and Lord have developed a two-dimensional model centered on product modality and product prominence dimensions.
The article assigns significant importance to product placement theories. Within this context, the authors direct their attention towards prominent theories such as the Persuasion Knowledge Model, the Elaboration Likelihood Model, and the Narrative Transportation Theory. According to the Persuasion Knowledge Model, consumers accumulate knowledge regarding persuasive techniques employed by marketers, subsequently utilizing this knowledge in their interactions with them. In line with the Elaboration Likelihood Model, when being exposed to a persuasive appeal, individuals process information through one of the two distinct routes, central or peripheral. The central route is employed when consumers possess a high level of involvement with the product or message, while the peripheral route is in place when users exhibit low motivation and inclination to process the conveyed message, resulting in limited utilization of acquired knowledge. The Narrative Transportation Theory posits that narrative is used not only to convey information but also as means of persuasion.
The article highlights the numerous advantages of product placement in modern business, particularly its notable distinctions from traditional advertising in terms of consumer engagement, persuasiveness consumer engagement, persuasiveness, and positivity, as well as the ability to project a positive attitude of the audience toward the brand, extend the product life cycle, and modify the product placement. Despite its growing popularity, product placement is not without its limitations, and several key drawbacks merit attention. These include the transferring brand control to film producers, the absence of universally accepted metrics for evaluating its effectiveness, challenges in pricing determination, reliance on the number of other brands placed in the media, and the potential for placements to become monotonous or overly exposed. With this in mind, ethical concerns have recently emerged regarding product placement as a covert advertising technique, particularly in relation to ethically charged products such as alcoholic beverages, tobacco, guns, etc.
Notwithstanding the aforementioned challenges, the practice of product placement has experienced significant improvements and gained new opportunities, facilitated by technological advancements. In the modern era, the product placement industry is growing at a rapid pace. Despite experiencing negative annual growth rates during the COVID-19 pandemic, in the past two years the growth rate has reached the double-digit mark again and is approaching the pre-pandemic levels. Notably, product placement in digital media and music videos is experiencing faster growth compared to traditional media. This trend is attributed to online influencers, the prominence of social media platforms, and the emergence of virtual product placement agreements. Data from world's leading research organizations indicates that product placement has evolved into a multi-billion dollar industry, characterized by its unique regulations and individual players. Recognizing the immense potential of product placement, many brand-manufacturing companies have embraced product placement practices and actively incorporate them into their integrated marketing communication campaigns.
The emergence of digital technologies has paved the way for a novel form of product placement known as virtual product placement. With the help of artificial intelligence, virtual product placement allows the brand to be dynamically placed into digital content in the form of product, signage or video. Given that virtual product placement involves utilizing a completed product, marketers are afforded the opportunity to consider audience and channel characteristics within the content, thereby enabling effective management of the placement process. The main advantage of virtual product placement lies in its ability to seamlessly integrate brands into selected content. Consequently, virtual product placement has rapidly emerged as one of the fastest-growing advertising technique. However, as technology continues to advance, virtual product placement is evolving to be more seamless and sophisticated. With the refinement of artificial intelligence, virtual product placement now offers a high level of customization and targeting. This enables brands to reach specific segments of the audience with precise demographic and geographic characteristics, thereby enhancing the effectiveness of their advertising campaigns. Furthermore, virtual product placement facilitates the evaluation of the outcomes of previously implemented placements. Moreover, if deemed necessary, brands can make adjustments by replacing one brand with another, thus ensuring optimal effectiveness and relevance in their product placement strategies. Using artificial intelligence, companies can identify products that hold the highest potential for their objectives. Furthermore, companies can use this data, alongside consumer behavior insights, to strategically place products depending on a viewer’s habit or preferences.

Keywords: Product placement, product placement theories, consumer behavior, virtual product placement.
JEL Codes: M30, M31, M39

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