Product placement in films is becoming increasingly common in recent times. This form of indirect advertising is quite advantageous, as it provides an opportunity to communicate to a captive audience, which is in a receptive mood. This is in sharp contrast to conventional advertising, where there is massive overload and clutter, and the audience tries to avoid advertisements. Product placement is well-established in Hollywood films, where it has reached a stage of maturity. Closer home in India, product placement in films is gaining ground and is heralding a change in entertainment economics.

Product placement is in effect an indirect form of advertis ing, wherein a real commercial product (or service) is placed in a movie, television serial or other medium; and such placement is usually paid or compensated for in some manner by a sponsor.

Wikipedia provides a very clear explanation about product placement: "Product placement, or embedded marketing is a type of advertising in which promotional advertisements are placed by marketers using real commercial products and services in media, where the presence of a particular brand is the result of an economic exchange. It is also known as product integration, especially when the product becomes integral to the plot. When a product is not a part of an economic exchange, it is called a product plug."

The compensation for product placement could take various forms. Some firms get product placement at no cost by supplying their products to the film production company. For instance, Nike does not pay to find a place in films; but instead provides shoes, bags, jackets, etc.

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