Advertising's Next Frontier: Retroactive Product Placement

Universal Music Group will place ads in music videos that have already been filmed. By year's end, the ads are expected to adjust depending on a viewer's demographic and location.

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By Laura Entis

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Welcome to the next frontier of advertising: retroactive product placement in music videos.

Yesterday, Universal Music Group, the world's largest record label, announced that it had teamed up with Mirriad, a U.K. tech firm, and Havas, a multinational advertising agency, to provide its artists with a new revenue stream: ads placed in videos after they've been shot, Billboard reports.

Under the terms, Mirriad's digital product placement technology, which scans through existing videos to identify blank surfaces on which it can insert advertisements or products, will allow Havas clients, such as Dish TV, Grand Marnier and Coca-Cola, to retroactively place ads in Universal artists' music videos airing on TV, online and mobile.

Grand Marnier has already purchased retroactive advertisements in two videos by the Swedish dance music producer Avicii ("Lay Me Down" and "You Make Me"), as well a video by Far East Movement ("Rocketeer"), according to Billboard.

Related: Check Out the 'Living Pictures' That Could Revolutionize the Ad Industry

Universal is touting this deal as an integral way for its artists, who have faced declining music sales as consumers have abandoned CDs for streaming music services and sites, to make more money. "With Mirriad's highly customizable platform, we have the ability to insure that artists' and brands' interests are aligned while we remain focused on presenting fans with the most compelling music experience possible," Lucian Grange, chairman and CEO of UMG, told the outlet. Artists, however, will get to decide whether or not their videos are open to retroactive product placement.

From here, it gets even more sci-fi: Mirriad estimates that, by year's end, it will be able to modify its ads according to a viewer's demographic and location, Billboard reports. So if you're watching a music video in Boise, Idaho, you'd see a local ad on a blank wall in a music video, while your compatriots in Boston watching that same music video might see a Dunkin' Donuts ad.

Related: Marketers Are Taking a Closer Look at Your Tumblr Photos. Here's Why.

Laura Entis
Laura Entis is a reporter for Fortune.com's Venture section.

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