New research in the INFORMS journal Marketing Science, conducted by researchers at the University of Chicago and University of Washington, finds a 10% increase in TV product placement for cigarettes increases sales by 2% for the tobacco brand shown on-screen. Furthermore, it has the same effect on its direct competitors’ sales as well.
The study, “Show and Sell: Studying the Effects of Branded Cigarette Product Placement in TV Shows on Cigarette Sales,” notes that prior literature illustrates tight regulations by the U.S. government on promotional activity of cigarette brands, because smoking is seen as a public health problem.
For the most part, these cigarette brands can no longer engage in any mass advertising, including TV ads, billboards or sports sponsorships. However, these brands still do benefit from TV product placement, which allows them to be seen by millions of American TV viewers.
“When people see product placement for a particular brand like Marlboro, retail sales of Marlboro products go up. However, what’s more surprising is that sales of other competitor cigarette brands (Camel, Parliament, Newport, etc.) also go up,” says Pradeep Chintagunta of the University of Chicago. “This indicates that product placement isn’t just about getting people to shift the brands of cigarettes they use – but to get people to smoke more overall.”
The researchers combined NielsenIQ PlaceViews data on product placement with NielsenIQ Ad Intel data, then measured the exposure of consumers in different markets to tobacco product placement. This information was then merged with store sales data from Information Resources, Inc., to measure the impact of product placement on cigarette sales.
“We find that this kind of product placement does increase the amount of cigarette sales. If regulators are interested in finding additional ways to reduce smoking rates, curtailing product placement for cigarette brands might be a fruitful option,” says Ali Goli, an assistant professor in the Foster School of Business at the University of Washington.
The study, conducted by Chintagunta and Goli, alongside Simha Mummalaneni of the University of Washington and Sanjay Dhar of the University of Chicago, urges lawmakers to restructure regulations around cigarette promotion based on these results.
Institute for Operations Research and the Management Sciences – 2022-10-26.
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