For my birthday, I received one of the best gifts I have ever gotten, a subscription to MasterClass. MasterClass is an online education platform of virtual classes that are taught by experts in various field ranging from film and television to writing to culinary arts. With the receipt of this gift right at the beginning of the COVID closures, I have utilized this platform to dive deep into the culinary arts where I have been studying under Michelin star chefs such as Gordon Ramsey, Thomas Keller and Wolfgang Puck, in addition to superstar Mexican and pastry chefs such as Gabriela Cámara and Dominique Ansel, respectively.

While watching these incredible videos, I could not help but notice the tremendous opportunity at hand for companies to get their products in these classes. It was even noted in Gabriela Cámara’s Mexican cooking class that the only great black beans are from Rancho Gordo, a grower in California. These products for potential use in a MasterClass setting do not need to just be recipes or ingredients. Products for placement could also include plates, silverware and equipment such as cast-iron pans or an immersion circulator for Sous Vide cooking.


Product Placement

At the end of last year, TechCrunch noted that, “Product placement is an increasingly big business in the U.S., raking in some $11.44 billion in 2019, according to data collected by Statista and that figure is up from $4.75 billion in 2012. The same report indicated that roughly 49 percent of Americans took action after seeing product placement in media.”

This is especially important to consider as more and more people move to alternative forms of media through streaming video on demand (SVOD) services such as Netflix, Amazon Prime Video and YouTube that do not have traditional advertisements through commercials. Additionally, in the time of COVID, people are changing their habits, which typically takes around 18 days, particularly around cooking at home. It is crucial that this new wave of home cooks are exposed to new products because, as mentioned in Hollywood Branded if “the decision maker didn’t grow up with your brand, it’s not part of their daily life.”


Cost-Benefit Analysis

With this change in consumer behavior related to increased use SVOD and increased cooking at home, a question to consider is how has marketing and brand strategy shifted? A few thoughts to consider:

  • What type of food business places products?
    • Produce Grower – can place ingredients for the recipes in these videos
    • Restaurant – place recipes or meal kits that are cooked by the best
    • Equipment Manufacturer – place cutlery, dishes, pots/pans that are used during the cooking and plating processes
  • What is the typical cost of product placement?
    • Hollywood Branded states that “costs can range anywhere from $25k to $500k+ if conducted through an agency”, but can mediated through talent, or platforms such as YouTube or Vimeo where videos can be produced using stock video websites and video editing software that is low cost or free.
  • What is the potential audience?
    • In relation to Masterclass, Forbes noted that “since the pandemic, demand for online classes has surged and there are weeks [they] are doing 10X what [they] did last year in revenue.” MasterClass has also raised an additional $100 million in new financing to add new classes and expand their digital presence.
    • In relation to YouTube, Oberlo wrote, “there are two billion users that are logging in every month to watch videos on YouTube, and there is one billion hours of video that is watched every day. Moreover, there is an active market that marketers have the potential to tap into and since a large portion of YouTube users visit the social network on a daily basis; it proves to be a great platform for your digital marketing efforts as 90 percent of people say they discover new brands or products on YouTube. YouTube can also help popularize your product. If you’re trying to get into a new market, or increase exposure of a product, you can make a video of that product showcasing its benefits.”
  • How to assess the data?
    • Large platforms such as MasterClass have the ability to track which accounts are watching specific classes and how many views the videos are obtaining which can be disseminated to personnel and companies that are placing the product.
    • For platforms such as YouTube, the total number of views are tracked in addition which google accounts are subscribed to the account and view the video. This could present an opportunity to conduct an analysis on sales by cross analyzing customer sales reports to the subscribers and viewers of the channel and video that can be utilized to assess the impact of the product placement and target customers for current marketing campaigns or future products.


Conclusion

This growth in digital product placement is only going to increase as the pandemic continues and people continue to move their habits towards viewing content on SVOD services. It only makes sense to review and assess alternative forms of content delivery with respect to new and current products to continue to sustain and grow company’s revenue channels while also expanding brand power and customer interaction.

This applies to all food and beverage businesses from farm to fork and I look forward to assisting companies in thinking of new and alternative approaches to expand their product exposure and analyzing the data.


Interested in how your company can take advantage of this growing trend? Reach out to GHJ’s Food and Beverage Team to learn more.

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Colin Nierenberg

Colin Nierenberg, CPA, has over three years of public accounting experience providing external and internal audit services to clients primarily in manufacturing and distribution for the for-profit sector and private foundations in the nonprofit sector. Colin splits his time between providing…Learn More