How does product placement in movies work?

Factual Questions
1

Does the studio send out bid proposals to major product’s advertising consultants?

For example, how did FedEx land their placement in Cast Away? I would think that since their plane crashed in that movie and the products didn’t make it to their destination, that that would actually be bad advertising ?!?

I was just watching another movie and they were drinking Rolling Rock in plain view and another beer that would of been Budweiser, but it wasn’t Budweiser, it was something weird and generic like Vudveiser.

So I took it as Budweiser didn’t want to pay for their beer to be in the movie, but Rolling Rock did?

What gives and how does this work? Who asks who when it comes to advertising in movies?

2

Two nitpicks: First, Fedex was not a paid product placement in Cast Away and second, Rolling Rock is owned by Anheuser-Busch, parent of Budweiser. (Still perhaps the product placement was for only the Rolling Rock brand.)

3

Learn something new everyday. Any other ideas as to how this works, though?

4

I don’t know the answers to everything you asked, but I know a couple.

Generally, the studio lets the advertisers know that there’s a marketing opportunity in a script – say, beer prominently figures in several scenes. Any beer sellers who are interested will line up, take a look at the script and decide whether they want to buy in.

Every once in awhile, the would-be sponsors will line up and offer the studio a zillion billion dollars if only R2D2 and C3PO will wear Nike in the next Star Wars film.

And because major companies generally treat their brands individually, it wouldn’t be unusual for Budweiser to decide to buy into a film, but not Michelob.

Once you get past the basics, everything, and I mean EVERYTHING is negotiated to death.

I was involved in this particular type of marketing once (and only once, for which I’m grateful.) It wasn’t product placement, but having characters endorse a product. Here’s roughly how it went.

The manufacturer saw a natural fit between the characters and their product. In this case, the manufacturer approached the studio and offered to buy a tie-in.

The studio immediately started negotiating as to what level of endorsement they would accept (product in the background, product actually being used, characters endorsing the product, etc.)

Once we got the guidelines hammered out, we had to negotiate with the actors who played the characters, to get the rights to use their actual photos to advertise the product. The actors had their own ideas about what they would and would not allow their faces to be associated with, not to mention whether the endorsement included they, (the actors themselves), personally, or only the character they played.