British TV will host product placement in 2011

Product placement in British films, TV series, entertainment shows and sports programmes is set to become a reality, when Ofcom unveils plans to legalise the practice in its Broadcast Code in the coming days.

According to sources, new commercial opportunities will be created for brands to appear on TV screens in 2011 when Ofcom reveals a more relaxed approach to product placement; something already commonplace in other major TV markets.

The regulator is set to combat many of the concerns surrounding product placement by safeguarding children's and news programmes, and UK-produced current affairs, consumer affairs and religious programmes.

There will also be outright bans on tobacco products, alcohol, gambling and foods or drinks that are high in fat, salt or sugar, medicines and baby milk.

In addition, editorial independence from product placement is likely to be stipulated, along with no undue prominence to products or direct response activity allowed.

Also, the regulator is expected to announce that viewers should be alerted to the presence of  paying brands through 'signalling' at the beginning and end of a programme, as well after an advertising break. This is likely to lead to a new ‘P’ symbol being adopted by commercial broadcasters.

The anticipated green light comes little more than a year after a consultation process led by the former Labour government's culture minister Ben Bradshaw. It came just months after his predecessor, Andy Burnham, had ruled out allowing product placement.

At the time, Viviane Reding, European commissioner for information, society and media, said she "did not understand the logic of the UK Government", and warned it was "punishing UK production companies by not letting them have this revenue they heavily need to survive".

The review in autumn 2009 came as commercial broadcasters in the UK were in the grip of the recession, fighting double-digit falls in TV adspend. ITV alone announced half-yearly losses of £105m after advertising revenue tumbled 15%.

But television has been the biggest benefactor of returning adspend this year, according to GroupM’s latest report, with annual growth of 14% expected in 2010.

Media agencies suggest product placement could make up around 5% of all TV spend within the next five years, and generate as much as £200m a year. TV sponsorship deals are currently worth around £200m, according to television body Thinkbox.

Broadcasters have already started to discuss product placement with media agencies. One TV trader said ITV was trying to take a "leadership position" in the genre as it seeks to diversify revenues.

A revitalised Channel 4 under David Abraham is also exploring possibilities product placement will offer their current clients.

Among the front runners on the production side is the Peter Bazalgette-led MirriAd service, which boasts a quick and efficient way of adding brands into programmes already made.

However, one media agency exec warned there is not going to be "a gold rush" as soon as product placement is cleared, because the industry is yet to agree a standard metric for measuring its impact.

At the beginning of the year, the Incorporated Society of British Advertisers made the surprise move of arguing against product placement amid fears it would lead to a "double disadvantage" for advertisers and viewers.

ISBA argued that the current system of unpaid prop placement, where programme makers seek out branded products to use within shows, serves both groups better than a paid system.

Changing to a paid system would raise costs for advertisers and make viewers more likely to complain, ISBA said, highlighting the fact that no viewer complaints have been upheld in the past 25 years.

This was later rebuffed by broadcasters, including ITV, who said it is more likely to follow the US example, where both product placement and prop placement happily co-exist.

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