Abstract
This study investigates the effect of PPL (Product Placement) advertisement in Korea on listed firms’ salesgrowth in an empirical way. Most existing literatures argue that PPL advertisement brings negative impacts onsales of PPL products theoretically. It is difficult to find studies of examining the effect of PPL advertisment tosales growth empirically. Thus, from the listed firms’ financial data, this study examines the change on sales preand post PPL advertisement legalization periods in Korea. Korea is selected for the sample of this study, becauseKorea provides a good research setting for watching the PPL effectiveness; PPL advertisement has beenlegislated in Korea since 2010. In the past, the way to advertising through broadcasting was very limited so thatsome advertisements were illegally prevalent, but the PPL legalization allows that the advertisers more freelyexpose their products in various ways. For testing the effectiveness of PPL advertisement after the legalization,unique dataset of listed firms in Korea are collected. As a result, this study supports that there is a significantlynegative association between PPL advertisement legalization and firms’ sales growth rate. This negativeassociation is still robusted when firms increases their advertsiment expenses. This implies customers arepossible to receieve a negative impression from direct exposure of PPL advertisement. This result warns aboutthe riskiness of exposing products indiscrimately through media content.
Highlights
In recent years, Korean media content including TV drama and TV shows has made a cultural boom in overseas countries under the name of “Korean Wave (Chua & Iwabuchi, 2008).” This movement led Korean government supportive interventions on entertainment industry aimed for producing “quality media content” (Kwon & Rhee, 2014)
This study investigates the effect of PPL (Product Placement) advertisement in Korea on listed firms’ sales growth in an empirical way
Actors can wear a genericided brandnew shoes on TV but the logo of the product must be hidden; they usually cover the logo or brand name by carton sealing tape or paper stickers. The those products have been affected on their sales growth; many of those “unintended PPL” products on TV shows has been usually listed in top ranks on search portal sites after the exposure
Summary
Korean media content including TV drama and TV shows has made a cultural boom in overseas countries under the name of “Korean Wave (Chua & Iwabuchi, 2008).” This movement led Korean government supportive interventions on entertainment industry aimed for producing “quality media content” (Kwon & Rhee, 2014). Korean media content including TV drama and TV shows has made a cultural boom in overseas countries under the name of “Korean Wave (Chua & Iwabuchi, 2008).”. This movement led Korean government supportive interventions on entertainment industry aimed for producing “quality media content” (Kwon & Rhee, 2014). Actors can wear a genericided brandnew shoes on TV but the logo of the product must be hidden; they usually cover the logo or brand name by carton sealing tape or paper stickers The those products have been affected on their sales growth; many of those “unintended PPL” products on TV shows has been usually listed in top ranks on search portal sites after the exposure. PPL is marked by unavoidable advertising to the customers because the products place in a quiet way in the contents such as movies or TV shows (Korean Broadcast Advertising Corp., 2005)
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