Journal of Broadcasting & Electronic Media/December 2006

The Hidden History of Product

Placement
Jay Newell, Charles T. Salmon, and Susan Chang

Product placements now saturate motion pictures and television, but

the practice began long before E.T. the Extra-Terrestrial followed a trail
of Reese’s Pieces out of the woods. Using internal documents from mo-
tion picture studios, advertising agencies, television networks, and
public relations firms, this study traces the development of product
placement from its beginnings in the Lumière films of the 1890s
through the 1982 success of E.T. and Reese’s Pieces. The developmen-
tal differences between product placement in motion pictures and tele-
vision, and the repercussions of those differences on current practice,
are discussed.

It took a movie about a child-sized alien lost on Earth to place the advertising prac-
tice of product placement into the public consciousness. In E.T. the Extra-Terrestrial
(Kennedy & Spielberg, 1982) the alien followed a trail of Hershey’s Reese’s Pieces to
his new home. The movie was a hit, sales of Reese’s Pieces increased dramatically,
and to some the product placement industry was born (Snyder, 1992; Van Biema,
1982). Product placement in motion pictures is now valued at $1.2 billion annually,
with television revenues exceeding $1.8 billion (Kivijarv, 2005).
However, this research will contend that product placement was a sophisticated
sub-business long before E.T. that was fully integrated into the making and marketing
of mass media content as early as the 1920s and that product placement in mass me-
dia began with the birth of motion picture projection in the mid-1890s. This research
traces the development of product placement from its earliest years to the break-
through success of E.T. in the early 1980s and shows how product advertising had
been intertwined with the business dealings of the motion picture and television com-
munities from their earliest days.

Jay Newell (Ph.D., Michigan State University) is an Assistant Professor in the Greenlee School of Journalism
and Communication at Iowa State University. His research interests include media saturation and advertising
exposure.
Charles T. Salmon (Ph.D., University of Minnesota) is Dean of the College of Communication Arts and Sci-
ences at Michigan State University, where he also holds the Ellis N. Brandt Chair in public relations. His re-
search interests include public opinion, public health, and public relations.
Susan Chang (Ph.D., Michigan State University) is an Assistant Professor at the School of Communication at
University of Miami. Her research interests include branded product placement, integrated marketing com-
munications, and strategic communications.

© 2006 Broadcast Education Association Journal of Broadcasting & Electronic Media 50(4), 2006, pp. 575–594

575
576 Journal of Broadcasting & Electronic Media/December 2006

This research also explicates the development of mass media business rationales
for product placement. It shows that in motion pictures, product placement was ini-
tially the result of intermarrying family ties with business but quickly transformed into
a method of reducing the cost of motion picture production while providing no-cost
exposure for products. As the distribution of programming changed from local to na-
tional, the movie industry soon learned to tie on-screen placements of products with
offscreen promotion, thus increasing the potential audience while reducing the
out-of-pocket advertising costs.
However, for television, the product placement was seen as a threat to advertising
revenue, and an underground trade developed in which program staffs worked with
manufacturers’ publicity agents to promote products on air. The rewards of product
placement available to motion picture producers were less relevant to the television
industry, and the strains of grafting motion picture style placements into television are
still evident today.

Defining and Researching the Development

of Product Placement

The scholarly literature that mentions the development of product placement rarely
identifies instances of product placement as occurring prior to the 1980s, and those
that do are inconsistent in their evaluation of the beginnings of product placement.
Balasubramanian (1994) suggested that product placement was not an organized
business until the mid-1980s, whereas Miller (1990a, 1990b) argued that product
placement was an unstructured part of Hollywood operations until movies such as
E.T. successfully intermixed artistic and commercial endeavors. Wasko (1994) ac-
knowledged instances of product placement as beginning in motion pictures of the
mid-1940s, but Eckert (1978) noted activity that would today be called product place-
ment as taking place first in the 1930s.
The term product placement did not come into scholarly or trade use until the
1980s (e.g., Harmetz, 1983), so locating product placement within the mass media
industry must begin with a brief look at industry terms that began during the early
growth of movie marketing: exploitation, tie-ups, and tie-ins. In the first years of
filmmaking, when motion pictures were promoted locally as packages of multiple
films and not nationally as individual titles, exploitation referred to any sort of public-
ity that might generate attendance (DeBauche, 1985; Staiger, 1990). Beginning
around 1915, as promotion for motion picture attendance began to focus on individ-
ual titles, the term exploitation became differentiated from both paid advertising and
press relations to indicate promotional events, such as contests and giveaways
(Gaines, 1990). Within exploitation, the on-screen use of products was variously
termed “publicity by motion picture” (Dench, 1916), “moving picture advertising”
(“Ethics of Motion Picture Advertisers,” 1930), “co-operative advertising” (Harrower,
1932), “plugs” (“Firms Get Free Ads,” 1939), “tie-in advertising” (“Tie-In Advertising,”
 Newell et al./PRODUCT PLACEMENT, 1896–1982 577

1951) and “trade outs” (Lees & Berkowitz, 1978), or simply “exploitation” (Steele,
1925). However, the terms that endured from the 1920s onward through the 1970s
were tie-ups (Barry & Sargeant, 1927) and more recently tie-ins (“Tie-In Advertising,”
1951), both terms interchangeable and representing a cooperative venture between a
media maker and manufacturer, in which on-screen exposure of a product, offscreen
endorsement by an actor, or a combination of on-screen appearances and offscreen
endorsements were traded for paid advertising and unpaid promotions by the manu-
facturer (Eckert, 1978).
The tie-up offered benefits for multiple players in the filmmaking and distribution
industry. For the motion picture producer, the tie-up delivered free props. For the
manufacturer, the tie-up provided in-theater exposure for products to a captive audi-
ence and the chance for the product to be associated with well-known actors on- and
offscreen. In addition, the tie-up created the marketing option to use footage or pub-
licity stills from the movie in the company’s outside advertising. Besides being a direct
pitch for the product and the manufacturer, this “as seen in the motion picture …” ad-
vertising was a boon to the motion picture distributor, providing zero-cost advertising
for the picture.
The first scholarly investigation of tie-ups appeared prior to the introduction of
the phrase product placement with the posthumous publication of Eckert’s (1978)
The Carole Lombard in Macy’s Window, which suggested that tie-ups had been a
part of the movie publicity machine since the 1930s. Within advertising and public
relations, the first investigation of product placement was in the late 1980s, in
which product placement was initially defined as the inclusion of trademarked
merchandise, brand-name products, or signage in a motion picture (Steortz, 1987).
As this definition would allow a brand appearing solely from a director’s attempt at
verisimilitude, subsequent definitions added the requirement for a product place-
ment to be in return for a fee or reciprocal promotional exposure (Nebenzahl &
Secunda, 1993). A later attempt at defining product placement suggested that prod-
uct placement be unobtrusive and organic and be aimed at influencing the audi-
ence (Balasubramanian, 1994). Karrh (1994, 1998) contended that the phenome-
non of product placement was more correctly termed brand placement, as the
activity usually involved inserting a branded item into the production. Although
others have followed the brand placement terminology, this research maintains the
industry term product placement to maintain continuity with past industry and aca-
demic efforts. A synthesized definition of product placement would entail the inten-
tional appearance of a brand in programming that is driven by commercial intent.
For this research, the definition of product placement is the insertion of branded
products or services into mass media content with the intent of influencing con-
sumer attitude or behavior.
This definition suggests two tests to qualify the appearance of an item as a product
placement. The first test is the in-program visual appearance or audio mention of the
branded item or service. This is not necessarily a straightforward proposition, as the
sparse literature on the interconnection between commerce and cinema product
578 Journal of Broadcasting & Electronic Media/December 2006

sometimes misidentified instances of brand placements. One example was the place-
ment of Jack Daniels whisky in the Joan Crawford picture Mildred Pierce (Wald,
Warner, & Curtiz, 1945). An influential Advertising Age article on product placement
described the process by which the distiller delivered cases of Jack Daniels to the
film’s set decorator, who then used some of the bottles as props and others as gifts for
the cast and crew (Spillman, 1985). The identification of Jack Daniels as a product
placement in Mildred Pierce was repeated in multiple journal articles and theses on
product placement. However, an inspection of the Mildred Pierce VHS tape, released
in 1990, and the DVD, released in 2003, shows that although much alcohol con-
sumption is portrayed in the movie, none of the bottles have the square body and cy-
lindrical top that Jack Daniels instituted in the late 1800s. Instead, generic prop bot-
tles or unmarked decanters are shown throughout the movie. Even contemporaneous
accounts of product appearances are suspect. A 1951 Consumers Report article takes
to task the 1950 George Pal science fiction movie Destination Moon (Pal & Pichel,
1950) for its inclusion of what it termed “buried plugs” for Coca-Cola and Lee overalls
(“Tie-in Advertising,” 1951). An inspection of the DVD (2000) of Destination Moon
shows the spacemen sipping coffee, not Coca-Cola, through straws on their trip to the
moon. Moreover, although they are wearing overalls, the brand was neither men-
tioned nor shown. As a result of the mismatches between contemporaneous reports
and on-screen reality, in this research programming was viewed whenever possible to
establish the existence of a product or brand appearance.
The second and perhaps more difficult test to qualify the appearance of a brand in a
motion picture as a product placement is the intent to influence consumer behavior.
Filmmakers may include depictions of real products and services solely to increase
the verisimilitude of the story (Silberg, 1989). For this research, the intention to influ-
ence consumer attitude or behavior was inferred from contemporaneous documents
on a title-by-title basis. When available in archives such as the Academy of Motion
Picture Arts and Sciences Margaret Herrick Library, production files were reviewed
for memos, letters, and contracts that established a link between the filmmaker and
the brand owner. If the production files were unavailable or unilluminating, the com-
mercial intent was inferred by the existence of advertising or promotional material
that linked the motion picture with the product or contemporaneous media industry
press coverage.

Prehistory: Art and Commerce

The interconnections of public art with commercial concerns may have started
with the Roman billboards in the 1st century that combined, for example, text for
gladiatorial matches with crude line art of warriors in combat (Presbrey, 1968). Much
later, in the 18th century, the Japanese author and entrepreneur Santo Kyoden salted
his comic novelettes with information about products available for purchase at his to-
bacco shop as well as promotions for his other publications (Kern, 1997). While tour-
 Newell et al./PRODUCT PLACEMENT, 1896–1982 579

ing the pre–Civil War United States, entertainer Dan Rice could be heard “singing for
his supper” when he included the names of a local hotel and restaurant in his opening
number (Carlyon, 2001). Charles Dickens’s The Pickwick Papers can be considered
an early form of product placement, direct-mail marketing, and entertainment-based
merchandising. The Pickwick name was taken from a London-to-Bath carriage line of
Dickens’s time. The carriage line makes a cameo appearance in the story, and the co-
incidence of the title character riding in a carriage with his name painted on the out-
side is the center of one of the stories (Fitzgerald, 1891). A furor erupted when the il-
lustrator, Phiz, included a partly seen logo for Guinness Dublin Stout in a pub scene.
Other manufacturers approached the illustrator, requesting to be included in future
drawings (Wicke, 1988). Thus, by the end of the 19th century, the barrier between
prose and promotion was porous.

The Beginnings of Product Placement

in Motion Pictures

On December 28, 1895, pioneering French filmmakers Auguste and Louis

Lumière exhibited their films in the basement of a Paris café to the first paying audi-
ence for projected motion pictures. In developing their “Cinématograph,” a ma-
chine that combined a camera, processor, and projector into a single unit, the
Lumière brothers had also, in effect, invented the motion picture audience. The
running time of a Lumière film was limited by the amount of film that their
Cinématograph could hold, approximately 50 seconds. The content was often mo-
ments, purportedly, of real life: a train arriving at a station, pedestrians walking on a
city boulevard. But many of their films were staged, including a very early one fea-
turing a performance by Frank Claire, the father-in-law to both the Lumière broth-
ers. Claire owned a brewery in Lyons, and in the film The Card Game (Lumière,
1896), he carefully pours a bottle of his beer for two companions. If the bottle had
a label, it was not visible, but in this film the initial steps toward the interconnec-
tion of film and commerce are seen.
Within 6 months the first examples of product placement would be filmed. In the
spring of 1896, the Lumière brothers entered into a distribution and production ar-
rangement with Francois-Henri Lavanchy-Clarke, a Swiss businessman who func-
tioned as a European distributor and promoter for the U.K. soap manufacturer Lever
Brothers (Cosandrey & Pastor, 1992; Mannoni, 2000). For the Lumière brothers,
Lavanchy-Clarke would exhibit films in Switzerland as well as shoot Swiss-located
motion pictures for distribution in Europe and the United States. For Lever Brothers,
Lavanchy-Clarke publicized their leading product, Sunlight Soap (Lavanchy-Clarke,
1922). It was this connection between Lavanchy-Clarke, Lever Brothers, and the
Lumières that resulted in the first product placements in motion pictures. In May
1896, in the yard of the Geneva home of Lavanchy-Clarke, Cinématographe operator
Alexandre Promio shot a film of two women hand-washing tubs of laundry. Placed
580 Journal of Broadcasting & Electronic Media/December 2006

prominently in front of the tubs were two cases of Lever Brothers soap, one with the
French branding “Sunlight Savon,” the other with the German “Sunlight Seife.” The
following month, the film, given the English title Washing Day in Switzerland
(Promio, 1896), was shown in New York at Keith’s Union Square Theatre, along with
shots of European trains, French parades, and various skits (“Notes of the Summer
Shows,” 1896). Sunlight Soap slyly reappeared in a film shot that fall in Lausanne. Ti-
tled Défilé du 8e Battalion (Girel, 1896), a wheelbarrow displaying the Sunlight Soap
logo and accompanied by a tuxedoed Lavanchy-Clarke is placed in the foreground
between the camera and the parade. The business of product placement had begun.

Product Placement in Edison Films, 1897 and Beyond

Although the first documented appearance of a product placement occurred in

Lumière Brothers films, it was Thomas Edison who turned product placement into
an ongoing business that provided twin benefits of reducing out-of-pocket produc-
tion expenses while providing promotional services for customers of his industrial
businesses. Edison’s film crews were provided transportation by the same rail lines
that purchased railroad equipment from Edison’s manufacturing division. The films
in turn promoted the consumer purchase of rail tickets in the competitive passenger
market. Transportation services of little direct use by the audience were rarely
shown. Of the 52 Edison films featuring trains, only two trains were freights, and
one of those freight trains displayed a banner promoting the freight service. Edison
films also were not beyond self-promotion. The 1905 Streetcar Chivalry takes place
in a commuter car placarded with posters for Edison products such as phonographs
(Edison, 1905).
Some Edison films integrated advertising messages that were more akin to commer-
cials than product placements. For example, in July 1897, his Black Maria studio was
the setting for perhaps the first advertising film: 50 seconds of men smoking in front of
an Admiral Cigarettes billboard (Musser, 1997). But although some of the Edison films
were overt offers of products and services, product placements as subtle efforts to in-
fluence audience attitude and behavior became a specialty of Edison’s. His catalog
listed hundreds of travelogues, such as trips to the Far West, Niagara Falls, and Ha-
waii, along with dozens of railroad films. The travel films were popular with the work-
ing class audience, and just as important, their production costs were subsidized in
part by the transportation companies. For example, a few months after Lumière exhib-
ited Wash Day in New York, Edison film producers James Henry White and William
Heise, accompanied by executives of the Lehigh Valley Railroad, filmed one of the
railroad’s fast passenger trains, The Black Diamond Express, passing the camera. Ac-
cording to news reports, the film crew was transported in a private railcar provided by
the railroad (Musser, 1991). Similarly, the Pennsylvania Railroad provided a special
photography car for a later film, A Ride Through the Pack Saddle Mountains (1899),
and was credited in the catalog (Musser, 1997). The Edison film A Romance of the Rail
 Newell et al./PRODUCT PLACEMENT, 1896–1982 581

(Porter, 1903) mirrored the Erie–Lackawanna’s promotional campaign for cleaner-

burning anthracite coal with a love story of a couple who meet on a train, the future
bride’s clothes unsullied by smoke.

The Interconnection Between Art and Commerce

in Films

That the commercial sphere was interested in using motion pictures as advertising
would have come as no surprise to Edison. At least one proposal to bring products to
audiences via motion pictures was made in the peephole era, with theatrical pro-
ducer W. D. Mann publicizing his plan to combine Edison’s peephole kinetoscope
with the Edison phonograph to create a sound film that would promote his play in the
weeks prior to the show’s opening (“Theatrical Gossip,” 1894). By the turn of the cen-
tury, industrial films were a popular form of entertainment in the United Kingdom
(Toulmin, 2001). For example, the English cookie maker Peek Frean created a
20-minute featurette that followed the baking process from the arrival of the raw ma-
terials at the factory to the delivery of the cookies by wagons with Peek Frean biscuit
banners (Cricks & Martin, 1906).
In the United States, cinematic art and commerce intertwined in the 1910s and
1920s as manufacturers and government-distributed advertising films that combined
drama and commerce to the small-town circuit. Producers of these films included In-
ternational Harvester, the U.S. Department of Agriculture, and the YMCA. From 1914
to 1921, Ford Motor Company created a series of newsreels titled Ford Animated
Weekly and Ford Educational Weekly. A typical serial included Model T races and
news footage that sometimes incorporated Henry Ford meeting with government offi-
cials. These advertising films were distributed at low cost to exhibitors and found an
early acceptance in small towns, with Ford claiming a viewership of 3 million per
week (Fuller, 1996).
American films initiated worldwide trade in American products. A Brazilian lumber
baron adopted the use of an American continuous band-saw blade in his mill after
seeing it in a Perils of Pauline–type serial. He observed that the band saw produced
fewer chips and sawdust than his rotary blade and would be better for cutting light-
weight balsa. In Java, sales of foot-operated sewing machines increased after local
women saw the machines in the closing segment of a Western (Freeman, 1920). By
1915, films were viewed as an opportunity to do more than demonstrate the product
in action—they exhibited the positive effects of the using the product. In France, an
advertising film for Remington typewriters tells the story of a young woman who saves
her family by opening a typing business after her father’s death (Dench, 1916). By the
end of the 1910s, Commerce secretary William C. Redfield testified before Congress
in an effort to obtain funds to purchase film projectors for use by overseas trade mis-
sions to present motion pictures to stimulate consumption of American-made goods
(Moving Pictures, 1919). The Department of Commerce argued to Congress that
582 Journal of Broadcasting & Electronic Media/December 2006

“trade follows the film” (Klein, 1926). On-screen product promotion was not limited
to hard goods. Some of the earliest, and certainly most subtle, product placements
were for California real estate. Before there was a Hollywood, Los Angeles real estate
magnate Harry Culver donated parcels of land for the construction of film studios,
correctly predicting that the on-screen exposure of southern California’s pleasures,
combined with the housing needs of film industry workers, would make his remain-
ing holdings more valuable (May, 1980).

Marketing Pictures While Selling Products:

The Tie-Ups Begin

Although the earliest product placements, such as those in the Edison films, were
most often a method of reducing the cost of production, a second rationale saw in-
creased use beginning in the 1920s: cooperative promotional arrangements between
outside manufacturers and movie makers, in which on-screen product appearances
or star endorsements were traded for advertising and promotions paid by the manu-
facturer. It was seen as a winning arrangement for both parties, as the motion picture
industry benefitted from increased ticket sales due to enhanced advertising for their
pictures while manufacturers obtained screen exposure for their products and a mar-
keting edge by connecting their products to celebrities (Barry & Sargeant, 1927).
Typically, a tie-up would result in the national manufacturer creating ads that fea-
tured the product and the motion picture as well as window displays for local distrib-
utors of the product. The local movie theater operators would then work with the lo-
cal distributor to create in-theater promotions for both the product and the movie
(Hendricks & Waugh, 1937). By 1931, tie-ups were a common industry practice. Film
Daily’s Jack Harrower trumpeted:

The merchandising tie-ups have been placed on a scientific basis. Working right with
the manufacturers of a given product, complete and exhaustive campaigns are avail-
able on any big feature that ties the exhibitors show up directly and compellingly with
the nationally advertised product right in the theater-man’s own home town. The im-
petus and prestige of million dollar national manufacturer campaigns are at the exhib-
itors’ disposal. He can come in on the ground floor, and cash in by intelligent co-oper-
ation with the local dealers on any given tie-up. (Harrower, 1932, p. 105)

The range of tie-ups was immense. Metro-Goldwyn-Mayer’s Dinner at Eight

(Selznick & Cukor, 1934) was promoted at thousands of Coca-Cola outlets with post-
ers that featured Jean Harlow and other cast members drinking Coca-Cola during
breaks in filming (Staples and Charles, 1995). Buick automobiles were used exclu-
sively in 10 Warner Brothers pictures, each of which was then promoted in Buick ads.
Other automobile manufacturers followed, as well as cosmetic companies (Helena
Rubinstein), shoes (Walkover), and foods (Armour; Eckert, 1978). Lever Bros, Swift &
Co., Jergens, Libby McNeill & Libby, Standard Brands, and Shell Oil appeared in Our
 Newell et al./PRODUCT PLACEMENT, 1896–1982 583

Gang comedies in placements engineered by J. Walter Thompson and, in turn, pro-

moted the serial (Lears, 1994). The DeBeers diamond cartel, working through N. W.
Ayer Advertising, provided gems used in movies and their movie stars, with the con-
spicuous presentation and display of diamonds as romantic gifts to strategically in-
crease diamond purchases in post-Depression America (Epstein, 1982).
Tie-ins routinely featured tobacco products: A scene in the Fred Astaire and Rita
Hayworth musical You’ll Never Get Rich (Bischoff & Lanfield, 1941) shows Astaire
conducting an elaborate tap dance sequence while smoking a cigarette, and the
movie was then supported by national tobacco advertising featuring the two stars pro-
moting Chesterfield’s manufacturing process (“Outstanding Film Campaigns,” 1942).
The General Cigar Company budgeted $250,000 for advertising to promote Paul
Muni as having smoked Owl Cigars in Scarface (1931) even though he smoked a dif-
ferent brand on-screen (Quarberg, 1931). Children were not exempted from tie-ups.
By 1932, Disney’s Mickey Mouse Club claimed 1 million members in the United
States. Children would sign up for the club at a department store’s toy section and
would then meet at the local movie theater (deCordova, 1994).

Complexity in Tie-Ups: It (1927)

An example of the intricacy of the connection between silent film moviemaking

and the commercial sphere was the romantic comedy It (Badger, 1926). The movie, a
story of a department store ribbon clerk who wins the heart of the store manager, was
credited with ensuring the stardom of Clara Bow. Released in February 1927, the mo-
tion picture was one of the year’s top-grossing pictures for distributor Paramount and
was connected by title and timing to a two-part Cosmopolitan magazine story by
Elinor Glyn, who earlier had achieved notoriety for her romance novel Three Weeks
and had been brought from England to Hollywood in 1920 to write screenplays for
Adolph Zukor’s Famous Players–Lasky film production company (Franke, 1994). In
the opening scene the department store manager’s companion, played by William
Austin, waves a copy of Cosmopolitan and a says that “everyone has been reading It
in Cosmopolitan.” He carries the magazine through the following sequences. Later in
the movie, another group of characters discuss the Cosmopolitan story, and author
Elinor Glyn, playing herself, appears in a nightclub scene to define the combination of
youth and sexual attraction that is “It.”
The sophistication of the tie-up is seen in the timing and content. The motion pic-
ture It was released in January 1927, coinciding with the publication of the two-part
Glyn serial that began in the February 1927 Cosmopolitan. Glyn, who was paid
$50,000 for the screenplay (It, 1927), was the author of the print serial, but the two
pieces share only the title and the definition of “It.” Advertising to movie exhibitors in
Variety left unmentioned the gap between the two stories, bannering It as “Elinor
Glyn’s IT/Cosmopolitan Magazine Story.” Glyn (1927) noted the differences between
the screenplay and the print story in the preface to the novel by the same title, pub-
584 Journal of Broadcasting & Electronic Media/December 2006

lished later that year. In the years to come, many magazine articles would become
movies, but few became movies simultaneously with their publication.

The Business of Tie-Ups

The use of tie-ups was regularized throughout the 1930s. The Walter E. Kline
Agency in Beverly Hills provided studio executives with multiple-page lists of prod-
ucts available for on-screen use in motion pictures, including Remington typewrit-
ers, IBM tabulating machines, Singer sewing machines, and appliances from Gen-
eral Electric. Products were offered rent free in return for publicity stills for use in
manufacturer’s advertising (Kline, 1931). A second agency, the Stanley-Murphy Ser-
vice Agency, offered a similar props-for-plugs arrangement, and C. E. Hooper
added tracking of on-screen advertising to its radio service, with the addition of a
full-time researcher in the New York office who screened motion pictures for plugs
(“Firms Get Free Ads,” 1939). Carpet manufacturers offered to weave rugs specifi-
cally for use on movie sets, asking for no on-screen credit but the opportunity to
create ads based on the picture for their 45,000 dealers (Horne, 1932). By the end
of the 1940s there arose a name for the product placement specialist at public rela-
tions firms and advertising agencies: the exploitation agent. The New York Daily
News’s Hollywood correspondent, Darr Smith (1949), wrote of exploitation agent
Ted Lewis, who claimed to have placed brand-name candies, athletic equipment,
kitchen utensils, and even branded sacks of animal feed in movies such as The
Men, Honeymoon for Five, and The Iron Cage. The Motion Picture Herald esti-
mated that by the end of the 1940s at least two dozen pictures in current release or
production featured on-screen cameos of products in return for the opportunity to
run offscreen advertising, including Ronson lighters in Woman of Distinction, Dic-
taphone in Bing Crosby’s Top of the Morning, and New Haven clocks in Guilty By-
stander (Spires, 1949).

Product Placement on Radio and Television

The clothier Browning King created the first sponsored program on radio around
the Browning King Orchestra and thus integrated advertising with the program name
(Barnouw, 1978). In radio especially, program talent would do double duty by shifting
roles from entertainers to pitchmen for their sponsor’s products. Subtle product men-
tions were not infrequent. For example, radio scriptwriter Irna Phillips routinely in-
cluded her sponsor’s products in speculative scripts for programs such as Today’s
Children (Lears, 1994).
However, the sponsored nature of radio and television in the United States created
a different environment for product placement from motion pictures, and with the
successful diffusion of television into American homes, product placement became
an adversarial encounter between the networks and paid sponsors on one side and
product promoters on the other. There were three primary reasons that radio and tele-
 Newell et al./PRODUCT PLACEMENT, 1896–1982 585

vision networks were antagonistic to product placement. The first was that the broad-
cast networks had agreed to limits on the amount of commercial time, and product
placement, even unpaid, could be counted as in-program advertising and thus reduce
the amount of advertising time available for sale. The second was that the essential
revenue stream for broadcast networks was the sale of commercial time to advertisers.
Product placements gave nonadvertisers free access to what network clients were
buying. The third reason for the negative response to product placement was that the
benefits offered to movie studios by product placement, such as offscreen publicity
and free props, were less valuable in the limited-competition and low-production
cost arena of television and radio.
Although the Broadcast Advertising Bureau recommended that program producers
avoid all trade references (“Tie-In Advertising,” 1951), publicity agents worked with
writers to plant product appearances or mentions, with occasional reports of writers
accepting bribes for the inclusion of product names in scripts. One public relations
firm in Los Angeles charged $250 per insertion to manufacturers for products such as
Paper Mate pens, Tabasco sauce, and Life Savers candy in shows by Milton Berle, Jack
Benny, and Bob Hope. A reported $100 went to the programs’ writers (Christopher,
1956). Agricultural products such as prunes and artichokes had their own agent in
Hollywood making placements, whereas other companies such as Pan American Air-
ways and Trailways busses continued the motion picture tradition of providing trans-
portation for on-screen appearances (Esterly, 1978). For the most part, product place-
ments in television were under-the-table arrangements between product promoters
and program talent and scriptwriters, in which on-screen appearances were traded for
cash payments to talent.
Skirmishes between networks and product promoters were noted throughout the
1950s in NBC’s Continuity Acceptance Reports (CART), first weekly and then
monthly memoranda from the network’s standards and practices department, the
group that functioned as the network censors for both programming and advertis-
ing. The memoranda, written by NBC’s manager of continuity acceptance, Stockton
Helffrich, began in 1948. Concerns about taste in programming and advertising
predominate, with topics that included sexuality, alcohol, crime, racial stereotyp-
ing, violence, juvenile delinquency, religion, profanity, and advertising credibility
(Pondillo, 2003). Product placement, as both plugs that were deleted from scripts
and those aired after slipping by the censors, was an ongoing issue in CART reports.
The first mention of brand names being cut from programming appeared in 1949
with a mention of Southern Comfort being deleted from a comedy show. Rumors of
comedy writers being compensated by publicity agents for salting scripts with prod-
uct mentions were the subject of a skit on Phil Silvers’s Arrow Show, and the continu-
ity clearance department listed the time devoted to product mentions as commercial
inventory (Helffrich, 1949a). The following year there were near weekly instances of
trade names being clipped from scripts, with CART reports commenting that the plugs
that slipped through the censoring system were drawing complaints from rival manu-
facturers of products. NBC responded by mandating the use of prop bottles and con-
tainers with the labels steamed off (Helffrich, 1950). Manufacturers complained di-
586 Journal of Broadcasting & Electronic Media/December 2006

rectly to their local NBC stations, with product appearances causing “tremendous
resentment from NBC stations” (Helffrich, 1951d).

NBC Continuity Acceptance Versus Hadacol

An example of the skirmishing over product placement occurred with product

mentions on both radio and television on NBC of Hadacol, a patent medicine con-
cocted by former Louisiana state senator Dudley LeBlanc. Containing a mixture of vi-
tamins, minerals, and alcohol, Hadacol spent heavily on advertising and events, and
by 1950 it claimed sales of 2 million bottles per month (“Medicine: Dietary Supple-
ment,” 1950). LeBlanc promoted Hadacol with a traveling show that featured Holly-
wood celebrities, including the host of NBC’s Texaco Star Theater, Milton Berle
(Brigham & Kenyon, 1976). Hadacol mentions or skits showed up in scripts for The
Spiedel Show, The Jack Carson Show (Helffrich, 1951b), and The Martin and Lewis
Show (Helffrich, 1951c). A CART report pegs the payment from Hadacol to its Los An-
geles publicity agent of $900 for each on-air mention (Helffrich, 1951a), yet the net-
work approved for radio air a Jane Wyman and Jimmy Durante novelty song that fea-
tured Hadacol as a mixer (Helffrich, 1951f).
But it was the quantity of product plugs in one program, the Texaco Star Theater
with Milton Berle, that attracted the most frequent attention from NBC’s censors.
CART reports list instances of Berle plugging Kleenex (Helffrich, 1949b, 1951g); li-
quor brands (Helffrich, 1951e); and, in one show, 17 different brand names (Helffrich,
1951c). Helffrich quoted an unnamed Long Island newspaper:

Radio and TV gagwriters have found a new way to make a buck if they can get away
with it. The gimmick is to mention a commercial product in a gig. Standard price is
$250 a mention. On Berle’s show the other night, Joey Fay had a five-minute bit in
which he mentioned five products. That was a quick $1,250 some writer made on the
deal. (Helffrich, 1951h, p. 2)

The reluctance to incorporate brand names into NBC programs was not absolute.
An NBC attorney, Gerald Adler, suggested that if an identifiable product was needed
as a prop, the show producer should consult the list of manufacturers already adver-
tising on NBC rather than a competing, and non-NBC advertised, product (Helffrich,
1954b). The standards and practices department reminded producers of this in multi-
ple instances. In one instance, Helffrich (1954a) chastised an unnamed production for
using the brand name Coke in the dialogue in a scene that included a Pepsi machine,
borrowed from a Pepsi distributor in New York, as a prop.

Negative Reaction to Product Placement

The use of trademarked merchandise on screen has been controversial almost from
the start. In the 1910s European theater owners were accused of obliterating the trade-
 Newell et al./PRODUCT PLACEMENT, 1896–1982 587

marks of American products seen in films (Tichenor, 1926). Even within the motion
picture community, there was not full agreement on the use of product placement.
The movie exhibitor newsletter Harrison’s Reports railed against the use of on-screen
advertising for products such as Kellogg’s Toasted Corn Flakes and Corona typewrit-
ers, arguing that “the act of a person who steals your screen is no different than the act
of a person who steals your watch” (Harrison, 1925, p. 1). United Artists advertising
chief Hal Horne defended the use of actors to promote products for tie-ups to studio
head Howard Hughes by arguing that “no matter where the picture plays you will find
exhibitors using the faces of our stars in all sorts of local tie-ups. … [Tie-ups have] be-
come part of the fabric and custom of picture exploitation” (Horne, 1931, p. 1). The
dispute about product placement spilled into the public arena with a New York Times
editorial that accused advertisers of

sneaking onto the screen in dark and devious ways. Articles for advertising are offered
to films in the making. Automobile makers graciously offer the use of high-priced cars
by studios … for kitchen scenes the manufacturers of nationally advertised food prod-
ucts willingly fill cupboard shelves. (“Topics of the Times,” 1929, p. 8)

The Hays Office, source of the Production Code drawn up in 1927 to forestall na-
tional regulation of motion pictures, did not specifically restrict the use of trade names
in motion pictures (Belton, 1996). But as a lightning rod for any grievance about mov-
ies, the Hays Office files contain multiple complaints from companies whose compet-
itors had received screen time. The Hays Office routinely advised producers to avoid
the use of trade names in motion pictures. When settings were impractical to fabri-
cate, such as an airplane exterior, the Hays Office asked that the shots of aircraft not
highlight the airline’s logo (Moley, 1945). Notwithstanding the complaints, the tie-ups
continued because of their ability to bring no-cost props to the producers, additional
advertising to motion picture distributors, and the association with Hollywood to
manufacturers of sometime mundane products. However, negative reactions to prod-
uct placements from theater owners, foreign distributors, and motion picture critics
seemed to drive underground the practice of product placement.

Product Placement as Revenue Generator

The value of tie-ups was in the reciprocal promotion of movies and merchandise,
not in the creation of a profit center for the moviemaker. However, at least one picture
did charge for placement—the Marx Brothers final feature film, Love Happy (Cowan
& Miller, 1949). Producer Lester Cowan had financing trouble throughout the produc-
tion, which culminated in his running out of money before the completion of princi-
pal photography (Arce, 1979). Chico Marx, who coproduced the feature, devised a
closing chase sequence above a replica of New York’s Times Square that required
Harpo Marx to scamper from one animated billboard to another. The signage rights
were sold in advance to Socony for $25,000 (Cowan, 1949b), Curtiss Baby Ruth for
$25,000 (Lahon, 1949), and Bulova Watches for $4,500 plus $150,000 in advertising
588 Journal of Broadcasting & Electronic Media/December 2006

(Cowan, 1949a). Gruen Watches had initially been offered the placement that even-
tually went to Bulova, and Fisk tires paid $2,000 for a momentary appearance (Smith,
1949). In a 4-minute, two-part sequence that is the climax of the film, Harpo, with a
string of stolen diamonds in his pocket, rides the Mobil Oil mascot Pegasus, swings
from a gigantic Bulova clock pendulum, and is thrown into the mouth of a smoking
Kool penguin, only to emerge blowing smoke himself.

The Routinization of Product Placement

The extent to which product placements had become a regular feature of the mo-
tion picture production process by the 1950s and 1960s can been seen in a confiden-
tial Columbia Pictures contact list for “Tie-up Merchandise.” The list contains prod-
ucts, names, and addresses from 43 companies, including Zenith televisions,
Dictaphone, Ekco housewares, and General Electric appliances. About half of the
companies were represented in Hollywood by public relations firms, with Hill and
Knowlton the most frequently appearing source. Advertising agencies were a minority
presence on the list: J. Walter Thompson’s Los Angeles office continued a movie
tie-up campaign that began in the 1920s for Lux soap, and D’Arcy offered Budweiser
for on-set use. The remainder of the companies provided contacts for their in-house
marketing or advertising departments. From the notations on the list, the use of trade-
marked products in motion pictures was an ongoing process: Food company Wonder
Bread kept dummy loaves in stock, and other companies promise that they could de-
liver trademarked props to sets on 3 hours’ notice (Columbia Pictures, 1959).
Motion picture producers continued to see product placement as a method of re-
ducing production cost and increasing promotion. An example is the house that prod-
uct placement built for Columbia Pictures’s Strangers When We Meet (Quine, 1960),
the story of an architect (Kirk Douglas) who has an affair with a married neighbor (Kim
Novak). A subplot involved Douglas’s construction of a spectacular house in the hills
above Los Angeles for a best-selling author, played by Ernie Kovacs. Rather than erect
a set for the motion picture, producer/director Richard Quine envisioned building a
real house in Bel Air and filming scenes before, during, and after construction. The
construction cost would be reduced through product placements that would generate
publicity for the building supply companies while tie-in advertising would promote
the movie. Throughout 1959 and part of 1960, Columbia publicist Marty Weiser
worked to create a cascade of tie-ins among housing manufacturing companies,
meeting with representatives of 37 companies, including Weyerhauser, National Oak
Flooring, and Mohawk Carpets. According to internal Columbia memos, the compa-
nies were promised, explicitly and implicitly, that their goods would be shown both in
the movie and in a featurette on the construction of the house, narrated by Ernie
Kovacs. In addition, the stars of the movie would pose for advertising shots with the
products. Weiser succeeding in obtaining $100,000 worth of product from 14 manu-
facturers and trade associations, including RCA television sets and phonographs,
NuTone intercoms, Simmons mattresses, Anderson Windows, Paddock Pools, and
 Newell et al./PRODUCT PLACEMENT, 1896–1982 589

Schlage locks. Although few of the products were identified in the motion picture,
nearly all of the manufacturers purchased advertising for their products in magazines
such as House Beautiful and Sunset. The featurette was produced and shown at home
shows in California (Weiser, 1960).
By the 1970s, product placement had been regularized to the point that at least one
company, Robert Kovoloff’s Associated Film Promotions, operated a warehouse
stocked with ready-to-go brand-name props. The company claimed to have placed
Fisher stereos in Hot Stuff (1980), Stetson cowboy hats in The Electric Horseman
(1979), and Budweiser in Urban Cowboy (1980) and North Dallas Forty (1979).
Anheuser-Busch had even developed a line of historical beer cans for use in period
pictures (“New Sophistication,” 1979). But the business of product placement was a
quiet one, until a hit movie in 1982 made a star of product placement.

E.T. the Extra-Terrestrial

The story resembled a Hollywood behind-the-scenes melodrama: With the cam-

eras already rolling, producers conducted backroom negotiations that replaced the
troublesome leading lady with a sweet young thing. The film was a smash, and the in-
genue became a new sensation. In this case, the ingenue was the candy Reese’s
Pieces, the established star M&M’s, and the movie, the top-grossing film of the 1980s
(National Association of Theater Owners, 2001), E.T. the Extra-Terrestrial (Kennedy &
Spielberg, 1982). The script had called for E.T., a little alien, to follow a trail of the
Mars Company’s M&M’s, but the publicity-shy company declined to participate. E.T.
coproducer Kathleen Kennedy negotiated the rights to use Reese’s Pieces with Her-
shey marketing executive Jack Dowd during a daylong session with the motion pic-
ture already in production. Dowd agreed to spend $1 million in a campaign to pro-
mote both the candy, which had entered national distribution only 2 years earlier, and
E.T. From Dowd’s standpoint, the deal was so speculative that he did not submit an
expense report to Hershey’s for the trip (Brenner, 1999).
When the motion picture opened in 1982, Reese’s Pieces were seen in a 90-second
segment in which a young boy drops a trail of Reese’s Pieces leading to his house, but
not before swallowing a few himself, and then again in a 4-minute sequence in which
the alien returns some of the Reese’s Pieces to the boy, then follows a new trail of
Reese’s Pieces into the house. Reese’s Pieces was not the only brand appearing in the
movie. E.T. drinks Coors beer, builds a space communicator using Reynolds Wrap,
and is offered a Coke, while Skippy, Pizza Hut, Raid, and Fresca all make cameos. But
as product placement, Reese’s Pieces was the star. Hundreds of theaters began selling
Reese’s Pieces at the concession counter, with some running contests to guess the
number of Reese’s Pieces in a jar. Per agreement, Hershey’s purchased $1 million of
promotion and advertising, creating posters and stickers to promote Reese’s Pieces as
E.T.’s favorite candy. The placement of Reese’s Pieces in E.T. was credited with tempo-
rarily tripling sales (Van Biema, 1982), but for Hershey’s, there was some bitter with
the sweet. A novelization of the movie depicted E.T. following a trail of rival Mars
590 Journal of Broadcasting & Electronic Media/December 2006

Company’s M&M’s (Kotzwinkle & Mathison, 1982), and Herb Caen’s (1982) review
in the San Francisco Chronicle made the same mistake. But there was no mistaking
the effect of the product placement on Reese’s Pieces. Hershey’s Jack Dowd remem-
bers the placement as “the biggest marketing coup in history. We got immediate rec-
ognition for our product, the kind of recognition we would normally have to pay fif-
teen or twenty million bucks for. It ended up as a cheap ride” (Brenner, 1999, p. 278).
The success of the product placement of Reese’s Pieces in E.T. the Extra-Terrestrial
can be viewed as a typical product placement arrangement that delivered atypical re-
sults. No payment was made by Hershey’s to Universal Pictures, and the producers
did not pay Hershey’s for the right to use a trademarked item. Instead all parties shared
in the benefits of the tie-up: Potential E.T. ticket buyers saw offscreen promotions paid
for by Hershey’s, and viewers were exposed to the on-screen use of the product. As
with tie-ups that began in the era of silent movies, the appearance of Reese’s Pieces in
E.T. was traded for offscreen advertising and promotion. The costs of promotion were
thus reduced for the filmmakers, and the manufacturer received an on-screen appear-
ance and the new candy firmly linked to a crowd-pleasing picture.

Implications for Product Placement Practice

For all the growth in product placement activity that followed the success of Reese’s
Pieces in E.T., the practice of intertwining advertising and program content originated
with some of the first films projected to a paying audience. The process began with
the first appearances of brands in Lumière films in 1896, acquired an ongoing busi-
ness rationale with Edison’s cooperative arrangements with railroads in 1897, and
then developed in span and sophistication with the widespread use of tie-ups from the
1920s onward. Although the generation of advertising revenue from product place-
ments was attempted at least as early as the 1950s, most product placement deals
were cash-free arrangements, and in this respect, E.T. was no different.
The reciprocal arrangements of motion picture appearances in return for props and
outside advertising made for a problematic translation to advertiser-supported televi-
sion. For television, trading appearance for anything but cash was seen as a threat to
the existing revenue stream, and in the 1950s, instances of product placement were
seen as falling outside of network-accepted practices.
Regardless of whether the deals were driven by producers seeking to reduce pro-
duction cost by acquiring free props or services, studios and manufacturers willing to
create cooperative marketing arrangements that simultaneously sought to move prod-
uct and sell tickets, producers seeking to raise revenue in a pay-for-show advertising
model, or even television program staffers willing to accept outside income, the busi-
ness of product placement has been an integral and active portion of mass media for
more than a century. Over that time the business operation of product placement de-
veloped somewhere between advertising and public relations (Balasubramanian,
1994), in which program producers, studios, and production talent worked with, and
 Newell et al./PRODUCT PLACEMENT, 1896–1982 591

sometimes against, advertising agencies, public relation firms, manufacturers, and

product placement specialists to take advantage of opportunities for on-screen adver-
tising. The competing cultures created a “cumbersome and confusing” structure
(Stanley, 2004), in which the path to seeing a product placement on screen was any-
thing but clear.
An understanding of the long-term development of product placement as essen-
tially a barter system is beneficial in navigating the confused landscape of current
brand integration practices, where in a single program one product’s on-screen ap-
pearance can be the result of cash payment, other products receive airtime in return
for reciprocal advertising, whereas other products are included to save money on the
purchase of props. The current multibillion dollar product placement business is built
on the practices begun over 100 years ago, and the echoes of past dealings reverber-
ate through current operations.

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