Over the course of January, I’ll be putting out a series on the future of the film industry (Part I, Part II, Part III). The focus will be on the disastrous Summer 2013 season, where fewer than 1 in 5 blockbusters generated enough box office revenue to cover production & marketing costs (leaving the major studios down nearly $750M). One option is to increase product placement/integration: Though Man of Steel’s $668M box office fell short of expectations, nearly half of its $350M+ production & marketing spend was covered by promotional tie-ins. With that in mind, I began researching the effects of a product or brand being strongly associated with popular media and came across a startling (though unquestionably anomalic) case study: Mad Men and Lucky Strike cigarettes.

While the claim that Mad Men could have driven a nearly 50% increase in Lucky Strike sales (representing an additional 10 billion cigarettes) sounds like typical advertising puffery, it’s hard to pin down another driver. After all, industry volumes grew only 2.3% over that same period and at a 136 years old, the brand should be rather ‘long in the tooth’. Lucky Strike did launch new flavors, update packaging and launch “capsule” cigarettes in the five years since Mad Men premiered, but so too did its competitors. The only new country the brand entered was Turkey – and that wasn’t until 2011. Even if one excluded all capsule (2010- ) and “All Natural” (2011-) cigarette sales (which would have been predominantly cannibalized, rather than net new), Lucky Strike would still have grown 12% between 2007 and 2012, five times faster than the industry overall and eight times British American Tobacco (the owner of Lucky Strike). Could it really have been Don Draper?

While Lucky Strike-branded cigarettes dominate Mad Men’s fictional universe, it’s possible that Mad Men dominates Lucky strike’s brand in the real world. The cigarette industry has historically traded on one of the most ethereal concepts known to man: “coolness”. But since the mid-2000s, this feeling (as well as any other) has been firmly outside the reach of the brands themselves. Not only are the majority of cigarette cartons overwhelmed by health advisories, tobacco marketing and advertising is prohibited in more than 175 countries, including the entire European Union and United States. In Mad Men, BAT had a show that epitomized “cool” masculinity and virility and positioned cigarettes as an anytime activity – all without running afoul of a single regulation or ban. This isn’t to say that Mad Men overcame tobacco or cancer stigmas, but it likely helped Lucky Strike become their cigarette of choice among new and high potential smokers. Demographic data seems to conform to this hypothesis: BAT boasts that over 60% of Lucky Strike customers are under 30, suggesting the majority of the brand’s recent growth has come from new smokers.

There’s also another, similar case study that reaffirms these conclusions: Canadian Club whiskey.

In the decade before Mad Men’s release, Canadian Club had not only missed out on 36% industry volume growth, it had actually declined by more than 10%. In fact, the brand was in its 17th consecutive year of declining case sales when Don Draper ordered his first C.C. on the rocks. But only two quarters later, the brand had turned a corner. In the years since (and in part due to Boardwalk Empire, which premiered in 2010), the hundred and fifty year old whiskey has enjoyed 4.3% compound annual growth. Though this is still less than the whiskey market overall (+5.8%), it exceeds the growth rate of Beam’s 15 other whiskies by more than three times.

Though Beam told the Globe & Mail that it does not “attribute all the sales growth” to Mad Men, they acknowledge “It has made a huge impact on the brand… People are talking about it again, and it’s visible to young consumers.” Their highly successful 2008 ad campaign, “Damn Right Your Dad Drank It”, was also quite clearly influenced by the show’. Though advertising regulations on alcohol are less stringent than those imposed on tobacco, Beam would likely have struggled to achieve the effortless cool and brand relevancy offered by Mad Men and Boardwalk Empire.

Product placement is, of course, ubiquitous. According to the Journal of Management and Marketing Research, more than $10B is spent on placements globally, with the US representing more than 50% of that spend (roughly 75% of US primetime television engages in the practice. Few of these investments will drives sales spikes similar to those experienced by Lucky Strike and Canadian Club – in fact, neither of the two were paid placements (most tobacco companies have also made commitments not to participate in product placement). Last month, Priceonomics listed several famous cases (via CNBC):

• In 1982, Ray-Ban sold only 18,000 pairs of Wayfarers and was considering discontinuing the now-iconic brand. A year after they partnered with the 1983 film Risky Business. Tom Cruise’s sporting of the glasses helped increase sales nearly 20x, to 360,000.
• Only three years later, Tom Cruise’s Maverick (Top Gun) helped reinvigorate another staid sunglasses brand, Aviator, whose sales increased 40% after the film’s release
• In 1995, BMW paid $3M to displace Aston Martin as James Bond’s car of choice in Goldeneye and saw a nearly $250M increase in sales as a result
• Not only is Sideways credited with increasing sales of Blackstone Winery’s pinot noir by 150%, Paul Giamatti’s hatred of merlot reportedly drove a 2% reduction in sales volume across the entire United States

Mad Men and Sideways show that striking the right brand-content partnership can have a tremendous impact on sales, even when an audience is slight. It also begs the question: should studios consider taking revenue share agreements for product placement (based in part on “fit”), rather than going with the highest bidder?