Angel investor Ron Conway made a bold prediction to the overflowing audience at TechCrunch50 last Monday: product placement will become the next multi-billion dollar industry. Online video creators rejoiced, but Jim Armstrong, Managing Director for Clearstone Venture Partners, is not convinced.
One problem with product placement, Armstrong says, is knowing knowing when enough is enough: Product placement that is too blatant makes consumers suspicious and ends up having the same effectiveness of an ad. His larger, overarching concern, however, is that many entrepreneurs don’t have a thorough enough understanding of budgets and buying behaviors in today’s market.
"There’s a little bit of an ‘if we build it, they will come’ mentality,
and I realize that did happen in keyword search with Google and
Overture…[but] there needs to be the keyword buying market like there was in the click world, something for the brand world," he says.
Still, he says venture capitalists should be investing in product placement, and that he expects it will be a big business.
Armstrong also shared his thoughts on trends he’s noticed among start-ups today, like an increase in distributable content models rather than destination sites.
Clearstone Venture Partners was a sponsor for the TechCrunch50 event.
—Kelsey Blodget, Associate Producer