Interbrand Brand Channel - We chatted with Holtzman about his Apple breakthrough, why to never pay for product placement, Millennials, who’s doing it right these days and a few anecdotes.

Before Dell and Lenovo became common onscreen stars, Apple was pioneering product placement in Hollywood films. But before the brand was a frequent winner of brandchannel’s annual Product Placement Awards and before it had its own section in the Wikipedia entry for “product placement,” Apple was just another brand trying to generate some buzz. That’s when an Apple marketing manager named Jon Holtzman pitched a gambit to tie the brand’s new PowerBook laptop into a little Hollywood reboot titled Mission Impossible in a then-landmark cross-promotional and product placement deal with Paramount.

That was 1996. This year Holtzman is celebrating the 20th anniversary of his post-Apple agency, Eclipse Worldwide, a product integration, celebrity seeding and co-promotional opportunity agency. We chatted with Holtzman about his Apple breakthrough, why to never pay for product placement, Millennials, who’s doing it right these days and a few anecdotes.

brandchannel: You were on the cutting edge of placing Apple’s products on the big screen. How did that happen the first time, and did a lightbulb go off after?

Jon Holtzman (right): Apple is a great marketing company. However, for many years during the late 1980s its marketing focused entirely on specific products, like Macintosh, or ingredients or Quicktime. Very little attention was given to the brand of Apple. In fact, in Europe at that time, most people thought Macintosh was its own company, as the ads ended with a Macintosh logo, not an Apple one.

This was due to the decentralizing of regions and product marketing groups. Around 1990, I was part of a new centralized marketing team to help streamline this and put more emphasis on the Apple brand as a whole. I was named Director of Worldwide Brand Marketing. However, I was given very little budget to start this endeavor. So I spent a lot of time thinking about what we could do that could have a huge impact with very limited resources. That’s when the light went off—product placement. You could get hundreds of millions of people to see your brand in action at minimal cost. And nobody in the tech industry was doing it.

All I needed was some product. However, even that was not an easy sell. I was unable to get any (marketing) funding, even for product. So I had to put my thinking cap on. I knew that the PR group loaned lots of equipment to reviewers, who most times sent the product back when they were finished with it. That was usually about 6 months. I made a deal with the PR group to let me take those returned units and use them for product placement. So at first, I was placing six-month-old product into movies that would be released 12-18 months later. Not great, but it was a start. I was able to prove its worth and funding for product appeared. The program grew to be the most successful product placement program in any industry. In fact, when I presented updates to the executive staff, I noted that they only had 10% market share of PCs sold, but I had 90% market share of the silver screen.

bc: You argue that companies should never pay for product placement (reports to the contrary). Why?

Holtzman: Product placements should feel natural, not forced. It should not be blatant or obvious. Any placement that is so in your face that it takes you out of the story, for even a second, reflects poorly on the brand. The problem is that when a company pays for a placement they view it like advertising. They want a specific number of seconds of product and logo exposure for their investment. But that often conflicts with the flow of the production.

For example, take a show like 24, which moved at lightning speed, with cuts every second and multiple screens running at once. Cisco did paid placements on this show about once per season and demanded their ‘seconds’. The result was a fast-paced show that all of a sudden slowed down for a tight shot of a Cisco logo, held it and then moved on. Everyone at Cisco probably cheered when they saw it. However, everyone else watching it said to themselves, “WTF? Cisco just screwed up my show.”

bc: You’re a fan of how product placement can reach millennials. Why is that generation more receptive to product placement?

Holtzman: Millennials don’t watch TV in a traditional fashion – They use technology, whether that is streaming or a DVR. In both cases, they don’t watch or pay attention to commercials. If they are forced to watch them, they mute the sound. As far as being receptive to product placement, I would actually say they are not receptive to the blatant paid product placement I previously described. Just the opposite. But they do like watching what the actors do and say, and subliminally emulate that. What phone does their favorite actor use in the show, what do they wear, what do they drive, what makes them cool? So if products are included in a natural way that makes sense for the script and its characters, product placement works well.

bc: What’s the biggest threat to product placement today? Is it that there’s too much?

Holtzman: The biggest threat is paid product placement. It gives it a bad name. No one wants to see commercials in their favorite shows. Not even me. Certainly, there will be more of it, but it would actually be difficult for it to take the place of advertising revenue for the networks for many reasons. First, it takes a long time to negotiate each paid placement, with scripts going back and forth, major cash with major contracts to review and sign. There is just not enough time to get that done in most circumstances.

Most TV scripts aren’t even finished until a week or two before they shoot, and sometimes not until the day of shooting. Second, even if there was the time, how many paid placements can you do in an hour episode? Compare that to the number of ads that run over the same time. Finally. while the studios like the added income, the production creative teams are artists. They don’t want to be told what to write, even if it is a good idea!

bc: What are a few brands that you think are doing product placement right today?

Holtzman: Well, it’s been 20 years since I ran the Apple program, but I think they are still doing a great job. To my knowledge, they never pay, and while they are seen on lots of shows, they are very particular about what shows and characters use their products, and they don’t insist on specific amounts of time.

I think BMW and VW seem to be doing a great job as well for the same reasons. From what I have seen, their products are naturally integrated into the story and the characters that drive them are reflective of their target markets.

On a side note, we sometimes get approached by companies who want to do product placement, but insist that they will only do it if their logo shows as their product looks very much like all of their competitors. I respond “In that case, you have a lot bigger problems than product placement.”

bc: One final story?

Holtzman: One of the last placements I did at Apple was the Powerbook that saved the world in Independence Day. It was used throughout the movie by Jeff Goldblum, and in the final scene where he inserted a CD into the laptop, communicated wirelessly through space to an alien ship and planted the computer virus that took down the aliens’ defenses and saved the world.

It was a fabulous organic placement, but I did get several calls from the product manager of that particular PowerBook, and he was not happy. At the time the movie was shot, no Apple laptops had built-in CD drives. However, inserting the CD was a key part of the last scene, so the production mocked it up to look like there was one. The product manager was very upset that the product was misrepresented in this manner and went on and on about it. However, nowhere in is rant did he mention the fact that communicating wirelessly though space with an alien spaceship was also not a capability that model possessed! Also of note—by the time the movie came out, that particular PowerBook model was no longer available and the new ones didhave CD drives.