An Explorative Study of Virtual Product Placement INTRODUCTION Over the years, the rapid technical advances in video coding and broadband network delivery have led a huge amount of video content distribution. In addition, with dramatically boosted online video services, people can easily create, share, and watch tremendous videos in their daily lives. Either the traditional broadcasting or webcasting, the con- siderable population of the audiences brings forth great advertising boom indeed. Therefore, it has created phenomenal opportunities for advertisers and content owners to seek to monetize the video assets of the media industry and online video services. The multimedia advertising dramati- cally draws a lot of attention due to its potential commercial benefits (Hua et al., 2008; Wang, X. et al., 2009; Wang, J. et al., 2008, 2009). In the field of advertising and marketing, lots of advertising strategies (Moriarty, 1991) were developed and widely adopted in practice based on the advertising theory and psychology. There are various media for conveying the advertising message to people, for example, texts, images, and videos. In order to grab and keep audiences' atten- tion in a pleasing manner, advertisers usually bring together creativity into advertisements according to the principle of design and the applied media aesthetics (Zettl, 1999). Traditionally, product placement and the 30-second commercials are commonly used in well-organized TV programs or movies. Product placement is a paid advertis- ing message aimed at influencing audiences by bringing branded products or images into videos in a planned and unobtrusive way. On the other hand, the 30-second commercials are usually placed in the breaks of TV programs. The traditional advertising model for broadcast videos is based mainly on the 30-second com- mercials. In order to watch the videos without missing the highlights, most audiences may find some of these commercials, which regularly interrupt video programs, boring and intrusive, but they were forced to endure them. With the growing popularity of IPTV and the advent of intelligent digital video recorder (DVR), video viewers are no longer passive audiences. Users can not only fast-forward through the videos but can also easily skip all or most of the commercials with the introduction of DVR technology. Such uncontrollable ability of gaining more technical power for users to avoid advertisements decreases the effectiveness of the 30-second commercials in videos. The advertising messages would not easily be delivered to the consumers unless the advertisements are very impressive or attractive to them. Facing diminished passive audiences, advertisers have to revise or reinvent their ad- vertising strategies and promote their products in other ways. Therefore, product placement receives more and more attention and its importance rises in recent years. According to the essential characteristic of ad- vertising media, the advertisements can be divided into two categories: the physical advertisement and the virtual advertisement. By taking sports videos as an example, the trademarks or slogans which appeared on the billboards or printed on the court in reality are physical advertisements. On the other hand, the virtual advertisements are those which are inserted fictionally into videos by using computer-aided blending techniques. For example, the overlaid logos on the screen or the virtually projected logos on the court in the tennis videos are virtual advertisements (Yu et al., 2006, 2007, 2009). Generally, since physical ad- vertisements originally appeared on the billboard at the fringes of the court, audiences do not feel disturbed while watching sports videos. However, with fixed content and locations of advertising, people usually adapt to the presence of physical advertisements and easily filter them out of their vision, which is the so-called ad-blindness effect. Thus, the advertising effectiveness produced in this way is limited. In contrast, the virtual advertise- ment is paid more attention due to its capability of permitting dynamic and switchable content for advertising. Since the additional contents, 123