Advertising within the content of a film is very distracting for me, especially as a TV/film major. If it were up to me, I would create my own line of fake products for my productions.
I say, if an advertiser wants to support a film, they get the same brand visibility as before. The catch is, they can't use their own products. No billboards, either. The brand has to be tied intentionally to a non-existent product (i.e. Coca-Cola vacuum cleaners, Intel orange-flavored vodka, Kellogg's latex-base paint). This should especially be the case for fake products an advertiser has made for its client company (Clorox's wall-breaching Formula 410).
The company must also agree to never make the product in question (as I would imagine a large beer or cigarette producer would be more than happy to do).
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Exceptions to the rule are when the writer wishes to parody an ad or campaign. I'd pay to see a man enjoying the "fresh summer feeling" of a nice douche.
What's so bad about product placements? I think it adds realism to a film if the characters drink Cokes or Budweisers or drive a Ram Charger or whatever. I much prefer product placements over plain old fashion commercials. I find phoney products in movies far more of a distraction because it conflicts with the real world.
Depends on the placement, really. Sometimes, it's incidental, practically overlooked, like how sports teams wear the same brand. Other times it's "place product in clear view, face brand to audience, hold shot for five seconds" bad. Anytime you're "forced" to see a brand or logo, you are sold to advertisers. I'm looking at this from the filmmaker's pov, one who doesn't want such obvert intrusions.