It’s not an outside product placement, but RKO’s 1946 “It’s a Wonderful Life” has a scene where George Bailey runs past a movie theater that’s playing RKO’s earlier hit film, “The Bells of St. Mary’s”.
It happens in more than a few movies that I’ve seen, but in The Women (a great movie from 1939) there’s a 15 minute fashion show for some designer that I have forgotten. It doesn’t really advance the plot, it isn’t really necessary, it could have been worked around…but there it is. Pure, shameless product placement.
That was one of the most blatant – they ran low on money, so went to advertisers who were willing to pay to have their trademarks in the final sequence.
That was Adrian, resident MGM designer who did all of the clothes for that movie. Not sure if that counts as product placement though, since AFAIK those particular outfits weren’t for sale. It may have been more of a “placement” for Technicolor than for Adrian.
It did bring the movie to a screeching halt, though.