Companies are struggling to find online marketing tools that are more effective than banner ads. Ford Motor's Ford Motor Canada unit, for example, developed an online game to promote its Escape small sport-utility vehicle. Torrey Galida, vice president of marketing at Ford, says the car maker invested in the game because banner ads are no longer "a great investment of our advertising resources."

Any developers out there feel like coming forward about discussions with advertisers? I would think it's almost a certainty that advertisers would approach developers hoping for some product placement. Max Payne killing thugs at McDonalds, or Gordon Freeman wearing his trusty Nike shoes... Would anyone object to this? I wonder if we could get pop-ups in videogames! heh

I cant recall the specific movie, but the earliest significant instance I can remember is a Quake level contracted to promote a movie back in the late 90s.