And Now, a Plot Line From Your Sponsor

Are we becoming a society bombarded with advertising wherever we turn? That's a sci-fi theory, but it might soon become fact. Product placement is alive and well, and has quite likely made an appearance in your living room. A recent The New York Times article implied that it's becoming more prevalent -- and more insidious. Is this a masterful strategy or a surefire way to turn off viewers?

The Times article pointed out the tendency to weave products into TV storylines. Consider the Campbell Soup essay-writing contest that was written into the plot of the show American Dreams. I also wrote about a name-drop of A9.com, Amazon.com's (NASDAQ:AMZN) search engine, on The O.C. not too long ago, and longtime Fool Rick Munarriz mused about product placement last spring. One might wonder whether 2006 will be the year that makes -- or breaks -- such advertising.

Advertisers will surely keep doing this; they know masterful product placement can work in some cases, as I wrote about in this commentary. Some brands' cultural-icon status makes them easy to add to storylines without straining viewers' disbelief -- Starbucks (NASDAQ:SBUX), Apple's (NASDAQ:AAPL) iPod and its Macintosh product line, and TiVo (NASDAQ:TIVO) all spring to mind.

However, it's easy to see how this placement may make the public more jaded than ever. The popularity of digital video recorders like TiVo clearly underlines viewers' growing distaste for ads. That's why advertisers are thinking of new ways to get through to people. For example, take this recent rumor that Procter & Gamble (NYSE:PG) is allocating more money than ever for product placements.

Even Apple's new video-enabled iPod -- complemented by a new version of iTunes that allows people to download hit shows from Disney's (NYSE:DIS) ABC network commercial-free -- may underscore the threat. I know a few people who have given up on television altogether, substituting Netflix (NASDAQ:NFLX) for cable, to remove advertising from their viewing experience.

It's pretty obvious that advertisers know what's up. PQ Media said that the product-placement market grew by 30.5% in 2004, to $3.46 billion, and believes that it will increase by 22.7% this year, to $4.24 billion. Quite tellingly, television-related product placement skyrocketed by 46.4% to $1.87 billion last year.

Given increased interest in this kind of advertising, we'll almost certainly find examples of klutzy, tasteless, or intelligence-insulting product placement on the airwaves. Fox's hit show 24 and its heavy-handed Cisco plugs drew attention last spring, for example. (See Fool contributor Rich Smith's take on that subject here.)

As you can tell, I have mixed feelings about the coming days of increased product placement. It's not hard to imagine tons of people becoming more averse to advertising than ever before. Though advertisers hope to gain more loyalty by weaving their products into storylines, they'd better be clever and creative -- because they run a very high risk of alienating the very folks they're trying to tempt.

Netflix, Amazon, and TiVo are Motley Fool Stock Advisor picks. To find out what other companies David and Tom Gardner have recommended since the service's advent in 2002, take a 30-day free trial here.