Date of Award

12-1-2011

Degree Name

Doctor of Philosophy

Department

Business Administration

First Advisor

Balasubramanian, Siva

Second Advisor

Clark, Terry

Abstract

Product placements are gaining more importance in corporate marketing communication budgets and marketers need to understand the effectiveness of these placements to justify investments into them. Three studies were conducted to study the effectiveness of product placements in movies. Essay one studied the economic worth of product placements on the long term profitability of the firm through an event study. Analysis of 467 placements of movies released during 1968-2007 shows that product placements generate a mean cumulative abnormal return of 0.21% during the (-1, +2) event window. Hierarchical linear modeling of the abnormal returns in cross-sectional analysis indicates that placement duration positively impacts the abnormal returns. Placement blatancy was found to negatively affect placements' worth. We did not find any support for the effect of critical reviews or presence of a star director on the worth of product placements. Crime and comedy genres were found to positively affect abnormal returns of placements. Additional MANCOVA analysis, using different event windows as the dependent variable, suggests that a period of two weeks might be required after a movie's release for the information about placement execution factors to be incorporated by the market in its evaluation of the firm. In essay two we study the effectiveness of product placement from a memory perspective by means of a longitudinal study, using a student subject panel. Subjects were exposed to a full- length movie and recognition was tracked at weekly intervals for a period of four weeks. Results of a dynamic panel analysis using generalized estimating equations indicate that audience recognition for a movie placement significantly diminishes one to two weeks after exposure to the movie. In addition, recognition of placements is enhanced by audiences' attitude toward product placements. Recognition is further affected by placement execution factors. Specifically, we found that audio placements and placements of longer duration positively affect placement recognition. Plot connectivity and character association did not significantly impact recognition over time. Essay three examines the impact of brand-character association on consumer attitude toward the placed brand. A 2x2 within subjects experiment, using a full-length movie as a stimulus, was conducted on a panel of student subjects to assess the interaction effect of character-brand valence on consumer attitude. Results support a significant interaction between character and brand valence. Analyses also indicate that congruency between character and brand valence enhances affective measures toward the placed brand, supporting the congruency theory and Meaning Transfer Model. Additionally, we found that brand familiarity fully mediates the character-valence interaction. Limitations and Implications of the studies were also discussed.

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