The Short-run Effects of Product Placements in Blockbuster Movies

Aktas, Osman (2015) The Short-run Effects of Product Placements in Blockbuster Movies.

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Abstract:Due to the developments of the weakening effectiveness of commercials, firms are more aiming on movie product placements to popularize their products. Previous researchers focused on the effect of product placements on consumers’ brand awareness, attitude, and purchase intention. The economic worth of product placements for firms are not studied well. Therefore, this study investigates the short-run product placements effects of 18 blockbuster movies from 2005 until 2013 in Hollywood that have reached an opening-weekend box office revenue of more than $200-million. The study contributes to the empirical evidence concerning product placements and explores movie-advertising strategies. The main difference with existing studies is the focus on short-term market effects of product placement as opposed to a longer horizon effects. The event study methodology of 163 product placements in 18 movies provided insignificant positive movements in firm market values during the movies’ opening. Four Twilight, three Iron Man and two Transformers movies were a part of the sample and did not provide any evidence that sequels have a positive effect on firm market values despite the fact that sequels realized higher box office revenues. Furthermore, the findings provide evidence that firms in consumer goods industry generates higher abnormal returns after the release of the movies. Overall, movie product placements have a positive economic effect on firm values but are statistically not significant. In the final part the results and limitations are discussed comprehensively.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/66904
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