AI is ushering in a new era of product placement
Product placement, one of the oldest tricks in advertisers' toolbox, is getting an AI makeover.
New technology has made it easier to place digital, realistic-looking versions of soda cans and shampoo on the tables and walls of videos on YouTube and TikTok. And a growing group of creators and advertisers are seizing the opportunity for an additional income stream.
A recent one TikTok by dancer Melissa Becraft, a poster of Bubly, PepsiCo's sparkling water brand, hung on the wall of her apartment as she shuffled to a Shakira song. A duo known as HiveMind talked about bands as an animated can of Starry soda, another PepsiCo brand, landed on a table between them. And a YouTube video of the “AsianBossGirl” podcast recently showed a table of Garnier hair products.
Virtual product placements have been offered in recent years by startups and streaming services such as Amazon Prime and NBC's Peacock. But a recent wave of it on social media, in which short, animated messages about the sponsorship appear on the videos themselves, is the work of a start-up called Rembrand.
The ads offer a glimpse into one way AI could shape advertising in the future, especially as marketers look to reach younger viewers who tend to skip or ignore standard ads.
Rembrand executives say their technology can transform product placements, which are often used to reduce production costs on larger projects and can take weeks, months or sometimes years to negotiate.
For creators, it's a way to make money from advertisers without physically touching or discussing products.
“This feels like I'm making my own real content, but it doesn't scream like I'm making an ad,” said Ms. Becraft, 28, who has made two TikTok videos with Bubly. “I'm not obliged to talk about it.”
Product placement is estimated to be a nearly $23 billion industry in the United States, according to research firm PQ Media. It has become increasingly attractive to advertisers, who worry about consumers skipping commercials or ads before YouTube videos.
The shifting audience to social platforms and advances in technology have opened a new frontier for this work, taking it beyond getting Coca-Cola cups on the 'American Idol' judges' table or cereal brands in WB- shows.
Rembrand, which has 42 employees and is based in Palo Alto, California, believes it is at the forefront of these changes. Since its founding in 2022, it has raised $14 million in seed funding from companies like Greycroft and the venture capital arms of UTA Ventures and L'Oréal. One of the founders, Omar Tawakol, 55, has worked in programmatic advertising for years and is best known for founding and selling BlueKai — which allowed marketers to track users' online behavior for ad targeting — to Oracle in 2014.
Mr Tawakol said he saw an opportunity to use AI to insert virtual products into influencer videos and make it a quick and easy ad buy.
Rembrand uses a form of generative AI that can “take an existing scene and figure out how to place a product in it,” Mr. Tawakol said. “The product has to look just right – Pepsi will not be forgiving if you tamper with their logo,” he added.
The company “had to train the laws of physics into the network,” Mr. Tawakol said, so that objects would respond well to things like light, camera distance and motion. Rembrand started posting podcasts on YouTube because “they were usually indoors, they usually had fixed cameras and they usually had a table and a wall,” he said.
It then expanded to LinkedIn and TikTok; Instagram is next. (The company said it named it Rembrand — an allusion to the Dutch artist, who spelled it Rembrandt — because it wanted an artistic slant while sounding like an abbreviation for “remember the brand.”)
Rembrand still asks creators like Mrs. Becraft to film indoors while they improve the technology. “The things I'm more known for are dancing outside in the rain and dancing in Times Square,” she said. “They told me if you do that, our technology could have a heart attack.”
The placements are not as subtle as those in TV shows. Starry sky and Bubly cans wiggle before opening videos, and logos float above. The company shared a demo that showed a digitized Tide Pen dancing on a podcast host's shirt and wiping away a stain before disappearing, “Fantasia” style. The company experimented with “what animations were acceptable” after realizing they could draw attention to the products, said Cory Treffiletti, 50, Rembrand's chief marketing officer.
Madison Luscombe, chief marketing officer of the Creator Society, an agency working with Ms Becraft, said that while the use of AI-generated product placement was still in its infancy, the deals could be valuable for “entertainment creators” focused on performances , podcasting or playing games, and are not necessarily approached as often by brands to promote mascara or new snacks to their fans.
Advertisers use Rembrand's marketplace to connect with more than 1,000 creators from agencies they work with. Creators upload their videos to the platform and receive them with product placements within 24 hours. Rembrand has someone check for quality and someone else checks how the brand comes across. Creators then upload the clips and ultimately get paid by the brands based on video views. Rembrand declined to share specific figures on payouts.
The company said it expected to transform into a “self-service platform” by the middle of this year, where any creator or brand could connect and run digital product placement campaigns without Rembrand's involvement.
When asked why YouTube, TikTok and Instagram wouldn't just offer this option directly to creators on their platforms, Mr Tawakol said he would “love” it if they wanted to work with him. “I designed my business to integrate with platforms,” he says. “We want to be the best in the world at this one specific problem.”