Virtual placement ads: Post-production is becoming advertisers’ new playground

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  Quantumrun Foresight
• October 12, 2023

Insight summary

Consumers often ignore traditional ads, prompting advertisers to explore virtual product placement (VPP) for more subtle engagement. VPP allows for post-production insertion of branded items into streaming content, making advertisements less obtrusive. While not new, product placement has been effective, earning $11.44 billion in the U.S. in 2019 alone. New tools are being developed to make VPP more flexible and impactful. The technology is customizable and can accommodate a range of products and versions, from streaming to DVDs. Concerns include the potential for overuse and viewer distraction.

Virtual placement ads context

Though it may not be a new concept, product placement is something that the advertising industry has been wanting to perfect for a long time. In 2019, product placement in the US earned around $11.44 billion USD, according to research firm Statista. Additionally, 49 percent of US viewers took some form of action after seeing products placed throughout media sources. According to research by marketing service firm Sortlist, the average moviegoer doesn't even notice that they're being sold 12.61 products per film. It's a tried-and-tested marketing strategy that takes careful planning, like placing a can of Coke on a table, months before the cameras start rolling.

However, streaming services are thinking of better ways to make product placement flexible and effective. Enter the VPP, a post-production advertising technique where branded items can be inserted into the background of a scene's programming or used as billboard ads. This strategy is a subtle way to advertise for subscription video-on-demand (SVOD) viewers. And it works. In the James Bond films, Aston Martins are immortalized, and in Stranger Things, Eggo sales have increased by 14 percent year-on-year, according to research firm Business Insider. Market intelligence firm PQ Media estimated that product placements were worth $20.57 USD billion in 2021.

Disruptive impact

Streamers and ad firms are continuously developing post-production tools that can enable advertisers to insert their products however they want. In 2022, Amazon launched its VPP tool, currently in beta, allowing advertisers to place their products directly into streaming content after the film or show has been produced. Meanwhile, ad agency Peacock's new "In-Scene" feature promises to identify key moments within a content and digitally insert a product to showcase the brand at the right time for maximum impact.

Advertisers that have an extensive suite of products within similar categories can benefit from VPPs. For example, food manufacturing companies can choose to insert the brand they think best corresponds to the character's personality or suits the scene's ambiance. And since demographic research and consumer targeting are inherent to brands' marketing strategies, the same data can be easily used to gauge which film or series best fits their messaging. 

Another benefit of VPPs is that they're highly customizable. For example, a company can feature a drink brand for streamed content and then place another brand for the DVD or cinema versions. In addition, with the ongoing supply chain disruptions caused by logistics and labor concerns, companies can have the freedom to choose the products they feel most confident to advertise. These items might have a more stable manufacturing process or are not heavily dependent on overseas vendors.

Implications of virtual placement ads

Wider implications of virtual placement ads may include: 

• Film studios reviewing and accepting multiple contracts from brands that want to use VPP in their content.


• Actors and actresses using blank props while shooting their scenes, which VPP tools can then superimpose with any brand.


• Brands targeting placements on reruns or DVD releases of old shows that still have a large fanbase.


• More startups offering VPP services that promise to cut down production costs and ensure that brands are not cut out on the production floor.


• Viewers complaining that product placements are becoming too numerous and distracting, especially on blockbuster films.

Questions to comment on

• If you work in an advertising agency, how is your firm developing VPP services?


• When you watch films or series, how much do product placements distract you, if at all?