Why does Sharon Stone use Mitel?

Tech brand owners are like many others in seeing the demise of traditional TV and print advertising. But, says Jo Best, they have some magic dust when it comes to product placement.

Kiefer Sutherland uses a Cisco phone. Sharon Stone prefers Mitel. No coincidence, of course - both companies have invested time and more than a few quid to make sure the right, perfectly manicured fingers are wrapped around their handsets.

With the advent of TiVo and IPTV, traditional advertising formats are starting to get a hammering and advertisers are starting to get savvy about where their marketing dollars go. According to researchers Nielsen Netratings, product placement went up 30 per cent year-on-year and time spent devoted to 'placed' products rose by 21 per cent.

According to Nate Elliott, analyst at JupiterResearch, the advent of PVRs - devices such as the TiVo, which allow individuals to record vast amounts of TV easily to a hard drive - means more and more of us are skipping traditional ads, forcing marketers to find new ways of getting their products into our glazed eyeballs.

He says: "You're seeing companies experiment with different advertising models and product placement is part of that - traditional advertising models are under attack [from ad skipping]."

Product placement can take a number of forms - film and TV is one obvious example. Celebrity 'ambassadors' are another - take Keira Knightley. The Oscar-nominated star doesn't carry the latest Nokia because the nice man at Carphone Warehouse found her a good pay-monthly plan - Nokia gave Knightley the device, hoping some of her glitter would rub off on the brand.

While product placement may remain a relatively niche area of advertising, getting a celebrity on screen with people has it benefits. JupiterResearch's Elliott says: "It may not be the highest level of endorsement but it is the most guaranteed."

Product placement is also cropping up in computer games, on billboards as well as integrated into the fabric of a game - in the game Worms, for example, Red Bull is used as a power-up for the eponymous worms.

Rachel Norman, MD of in-game product placement agency Hive, which has represented brands such as Orange and T-Mobile, said placement is not simply a question of shoehorning an item into some entertainment. She says: "These consumers have paid £40 or £50 for a game experience. If it's not contextually relevant, then we'll annoy them. If it jars, we're in trouble."

While product placement in films and telly attempts to slip under the radar, the relative infancy of in-game placement means it's more noticeable for players. According to Norman, surprisingly, even hardcore gamers don't mind the in-game ads, saying it makes their virtual world a little more life-like.

IP telephony rivals Cisco and Mitel have both adopted product placement as part of their marketing strategies - an interesting choice given that by and large both are enterprise acts, not the consumer players product placement is typically associated with. After all, which square-eyed Joe Public watches Basic Instinct 2 and remembers which handset features when there's a semi-naked Sharon Stone on show?

Simon Gwatkin, VP of strategic marketing at Mitel, told silicon.com why the knicker-shy star used Mitel in her latest film outing: "The reason we did Basic Instinct 2 was because we thought we wanted The Da Vinci Code. I was glad we didn't get it though - there wasn't a single [landline] phone in it!"

Most tech companies that indulge in product placement will typically hire an agency to do the donkey work for them, finding them the right films or series for their products to star in and guarantee appearances for the product - hence Basic Instinct.

According to Simon Jacobson, head of media partnerships at Cisco, initially product placement opportunities were limited due to the products' physical appearance - "lots of boxes with lights". "IP phones changed that," he says.

Jacobsen adds: "We choose the programming to reach the appropriate audience. I don't see Cisco IP phones appearing on Coronation Street for example. Cisco phones have appeared on Waking the Dead, Spooks and 55 degrees North."

Product placement is horses for courses - one company's Street is another's poison. Claire Backhurst, senior communications manger at Nokia, says: "Because we're so popular, we get asked [for phones] all the time. We are asked for products; we don't go to them."

Among those knocking on Nokia's door were the makers of The Apprentice and production companies behind soaps such as Coronation Street and EastEnders.

But there's a limit to how much product placers can get in return for their placement - no influence over the script is expected, for example. However, for some vendors, a little bit of geekery from the production staff can go a long way. For both Cisco and Mitel, when the production company got a handle on what the tech in question could do, it started working its way into the script.

Cisco's Jacobsen says: "Producers come and approach us and when we explain what we can do with the technology, we see it more and more in the programme. They start asking us questions - 'can we do something else with it? Can we put graphics in?'. It moves from a prop to something more tangible... At first it was 'what is this? Who is Cisco?'. Now 18 months or two years later, it's 'can we keep it for the second series?'."

Such added bonuses go a long way to explaining to the advertising sceptics why such moves are necessary to catch the eye. Mitel's Gwatkin told silicon.com: "When it comes to justifying it to [Mitel's] CFO, initially there was scepticism but now there's no argument."