Screenland's dirty little secret.

For the Film Home Alone, Sponsors Paid for No Less Than 42 Mentions of 31 Brand-Name Products

You're settled into your seat in a darkened movie theater, watching Rocky III. Sylvester Stallone and his young son are at the breakfast table, and the camera moves in on a prominent box of Wheaties. "You gotta eat the breakfast of champions if you want to grow up big and strong," says the fatherly Stallone.

Wait a minute. Is this a movie or a commercial? Thanks to the "product placement industry," it's both. Product placement - advertising brand-name goods by inserting them into films or TV shows - is increasingly common, but few viewers are aware that it exists.

Brand-name products have always appeared in movies and TV shows (remember all the Chevys on Bewitched?), though most baby-boomers will recall that in 50s and 60s films, soda cans and cereal boxes usually bore ficticious names or had their brand names strategically obscured on the sets. Until recently, product plugs were the result of an informal barter system between advertisers and movie producers. In return for featuring its brand of soda in a film, for example, a beverage manufacturer would provide a year's worth of free soda to the studio. From an advertiser's perspective, this system was flawed because it offered no guarantees that the product would appear at all, much less in a flattering light.

Paid product placements - like many other forms of marketing excess - were pioneered in the 1980s. Steven Spielberg's 1982 film E.T. is credited with starting the trend. When the lovable alien E.T. gobbled Reese's Pieces onscreen, national sales of the candy soared by 66 percent. Hoping to duplicate these results for their clients, a host of marketers rushed in and a minor industry was born.

Today, some 35 agencies arrange cash deals between filmmakers and corporate sponsors. Typically, a corporation will retain a product placement agency for an annual fee, then pay extra for each placement in a film. Placement fees vary according to the prominence of the plug. In 1989, one agency charged $2,500 for a mere appearance in the background, and $18,000 for "hands-on use" combined with "verbal mention."

Competition for placements can be intense. In The Firm, Mercedes outbid BMW (which was featured in the book) for a role as Tom Cruise's fancy wheels. In Wall Street, Michael Douglas holds aloft a copy of Fortune magazine, calling it "the Bible." Douglas neglects to mention that Fortune outbid Forbes for the privilege of appearing in the film.

Certainly, not every brand-name product in a film represents a paid placement. Directors may employ products to indicate something about a scene or character. But there is a critical distinction between a director using a product in a film for artistic reasons, and an advertiser placing it there with the sole intent of selling more goods.

In fact, when they are promoting their services, product placement agencies tout their ability to manipulate movie scripts to the product's best advantage. As one agency boasts: "[Associated Film Productions] carefully controls the appearance of the client's product in films...Producers and directors frequently ask AFP to recommend ways in which brand-name products can be creatively used to enhance a scene. This has led to many beneficial exposures of products in specially devised scenes that have great brand-name impact."

But the imperative of creating "specially devised scenes" makes for some seriously awful films. Consider, for example, a 1988 flop called Mac and Me, which functions as one long specially devised scene. Mac features an E.T.-like alien who lives on Coca-Cola, and a birthday party at McDonalds where everyone drinks Coke while Ronald McDonald sings the company's theme song.

How much of this kind of thing can the public stand? Unfortunately, the pain threshold might be quite high, since some of the most popular films of recent years also had the most conspicuous product placement. And many viewers still don't realize that when they see Sandra Bullock waving around a FedEx box in the film, The Net, they're watching an ad. But if present trends continue, and films pile on the endorsement and product plugs, moviegoers might vote with their feet.