Technology changed product placement (and you didn't even notice)

As the music video starts, Avicii nonchalantly wanders into Stockholm's Tele2 Arena. He strolls past the venue's reception; a Grand Marnier poster gets some vital screen time. The bass drops. The crowd goes wild. For some reason, I feel like drinking.

Over the past few weeks, Avicii fans in the US have been unknowingly drawing an association between their favorite Swedish DJ's proghouse hit "Lay me Down" and orange-flavored cognac. Everywhere else in the world, the brand is never seen -- a plain wall lies in its place. It's one of the first examples of a new kind of temporary product placement called "digital insertion." Typically, product placement currently takes the form of a lingering product shot -- like a Beats Pill speaker at the start of a Miley Cyrus video. With recent advances, companies can now use algorithms to digitally serve you unique product placements based on where you live, your age or your salary. It's a creepy concept, but it could change advertising forever.

The Grand Marnier spot is the work of Mirriad, an agency that sells what it calls "advertising for the skip generation." Mirriad uses highly complex analysis tools to map video clips, automatically discerning the best places to insert products, billboards and other adverts. The software it created tracks objects and backgrounds in each frame, creating an optical flow of how objects move from second to second and essentially mapping the video in 3D. This enables both planar tracking (for modifying flat surfaces like walls, computer screens or newspapers) and 3D tracking (for placing complex 3D objects into a moving scene).

Mark Popkiewicz, Mirriad CEO, explains the potential for the company's technology. "We can embed brand assets, digital forms of whatever the brand is. It could be signage, like posters or billboards; it could be actual products. Anything from a can of Coke, a packet of Frosties, a mobile phone. You name it. It can even be a car; we've done many of those."

Mirriad has signed some big deals with Vevo and Universal Music Group (UMG) over the past six months. It also recently announced a partnership with advertising firm Havas to match the right companies to the right videos. Havas is an industry giant with huge brands on its books, and the first wave of Mirriad-UMG placements will include Coca-Cola, LG and Dish Network.

Product placement is obviously nothing new. It dates back almost a century in radio and film, and has its beginnings in literature: Companies reportedly clamored to get a mention in Jules Verne's 19th century novel Around the World in Eighty Days. Music videos, too, have long been firmly in the grasp of brands, with many clips acting as thinly veiled advertisements for Beats, Coca-Cola and countless other brands. However, these placements come with their problems.

Advertising is ephemeral. Why should product placement be any different?

Ever seen the first minute of Hilary Duff's "All About You" video? It's essentially an Amazon Fire Phone commercial. How valuable will that ad be to Amazon in five years' time? You need only look at the countless '00s musicians flashing two-way pagers for your answer. Regular advertising, be it in print, web or TV, is ephemeral. The ads running alongside this article, for example, are for current products and companies. Why should product placement be any different? Once Grand Marnier's contract expires, Avicii may be walking past a Ford poster, or a can of Sprite.

But let's not forget location. At the time of writing, the Fire Phone is available in exactly three countries, yet anyone in the world can watch "All About You." With digital product placement, the same artist can plug different brands depending on where the video is viewed. When it comes to buying these ads, Mirriad's software automatically generates metadata about videos it processes, cataloging not only the advertising opportunities in each, but also the ideal target market and the value of placements -- in fact, it's really quite similar to web advertising. Rather than Microsoft placing branding on Taylor Swift's wall, the company need only come to Mirriad and explain what kind of people it wants to advertise to. A campaign could target a million views from 16- to 24-year-olds in the US over a four-week period. Mirriad then embeds the relevant ads into as many videos as necessary to meet that target, using existing analytics from YouTube and others to prove their worth.

"There's no algorithm in the world that can tell you, 'This is a good place for Smirnoff.'"

"Our algorithms monitor down to a pixel level the actual exposure on screen, time, size, location and orientation of the brand so that we're always meeting and exceeding a minimum level of exposure," says Popkiewicz. "Our technology is monitoring that, so that when you buy a campaign from us, you're going to get a guaranteed level of exposure ... For the brands, it takes the uncertainty out of advertising." Of course, there are limits to what can be automated. "There's no algorithm in the world that can tell you, 'This is a good place for Smirnoff because it's a party atmosphere,' as opposed to, 'This is a good place for Starbucks because it's an office environment.' Those sort of things we have to leave to human judgment."

Mirriad has already brought its ads to TV, and it's not the first company to do so, either. If you're in the UK and you watch Hannibal or Bones, chances are you've seen some digital product placement, while in the US, rival firm SeamBI offered a similar service that was used to, among other things, insert up-to-date ads into reruns of How I Met Your Mother. SeamBI was founded almost a decade ago, but it's unclear what's happened to the company. It hasn't issued a press release in over two years; its founders are all working elsewhere; and a request for comment on this article was left unanswered. For now, it seems, Mirriad has this potentially lucrative market largely to itself.

mitsubishi product placement

Popkiewicz is coy when quizzed on where the company's placements might end up next, but is clear the company has big ambitions. TV could potentially be a far bigger market for Mirriad and other firms than music videos. There's an obvious trend away from traditional television and toward digital content, whether through on-demand services from existing TV companies (think Hulu or HBO Go), or from all-digital services like Netflix and Amazon Prime Instant Video. As we move away from watching live broadcasts or buying Blu-ray boxsets, Mirriad's techniques become more and more feasible, and with a growing audience the potential for more complex placements increases.

Although none of the big streaming players are keen on discussing the viability of product placement, TV studios are happy to explain its potential benefits and drawbacks behind closed doors. "As you offer your shows around the world through syndication, you encounter different laws about product placement," one executive, who prefers to remain anonymous, explains. "Adding ads after the fact increases the amount of money you can make from syndication because each country that airs your show can potentially generate revenue." Another executive felt similarly upbeat about the financial possibilities, but did note that placements would have to be "tasteful" in order to prevent upsetting its shows' "biggest fans."

"If you're not careful to be tasteful, you'll just end up upsetting your biggest fans."

Services like Netflix could be key to kicking product placement up a gear. There's nothing preventing distributors from supplying streaming sites with special versions of your favorite show for various territories, each with different product placements from the version that aired on TV. Similarly, a service could, at any given moment, have hundreds of versions of a particular video for targeted advertising, serving Coca-Cola ads to teens or Grand Marnier to 20-somethings. Of course, this would require a lot of work on Netflix's end -- the company told us it has "nothing to share" on the matter -- but should it make financial sense for both parties, it's hard to see it not happening in some form.

The same could be true for on-demand movies. Of course there would be some backlash if, for example, Quentin Tarantino's Big Kahuna Burger joints suddenly turned into McDonald's, but with a subtle hand, there's a chance you may not even notice a new bottle of Coke in the background of your favorite Pulp Fiction scene.