Media: All About ... Product placement legislation

The EU looks set to legitimise this furtive practice, Alasdair Reid writes.

The BBC has come a long way since the mid-60s, when it banned the original version of a Kinks hit for rhyming "Lola" with "Coca-Cola". Blue Peter may still be constructing all manner of modern miracles out of generic "cereal packets" and "washing-up liquid bottles" but the Beeb's adult television output has become a brand-rich environment.

A recent investigation by The Sunday Times into the BBC's penchant for product placement succeeded in drawing attention not only to the extent of BBC involvement but also to the rather furtive nature of this whole business.

Because, of course, it is still illegal in the UK to pay a programme producer or broadcaster to feature your product. Ask Richard and Judy, whose Channel 4 show was fined £5,000 for featuring too much Red Bull in a feature about the benefits of caffeine.

But perhaps change is on the way. Last week, European Union legislators gave the clearest indication yet that amendments to EU broadcast legislation, which is currently being redrafted, would take a more liberal line on the whole question of product placement.

1. Currently, the EU's Broadcasting Without Frontiers Directive (a framework that also determines UK media law) states that branded products such as Red Bull (the market-leading high-energy caffeine drink) cannot be placed in television programmes in exchange for a fee or service.

2. Last week, however, Viviane Reding, the European Union media commissioner acknowledged that product placement had become a fact of life. The issue now, she continued, was not to introduce more Draconian laws but to develop strict yet workable rules governing the practice.

3. This is in tune with thinking at Ofcom. A liberalisation of sponsorship codes back in May contained no new proposals covering product placement (Ofcom's chief executive, Stephen Carter, promised to revisit the issue later this year). However, new guidelines acknowledged that "brands are an integral part of modern society and this will inevitably be reflected on television and radio as it is in other media. Therefore, there is no absolute prohibition on the appearance of, or reference to, brand products and services within programmes."

4. If the US market is any indication, this is about to become a huge business in the UK - if and when the Ofcom codes change. Last year, according to conservative estimates, US advertisers spent $550 million on product placement. That figure is expected to grow to $825 million this year. The number of placements is doubling roughly every six months.

5. According to Nielsen Media Research, which monitors the "integration of product occurrences" in primetime US broadcast network programming, there were 12,867 instances of product placement recorded in the first quarter of 2005. The leading brand was not Red Bull but Coca Cola Classic, with 1,931 appearances. The most brand-rich show was NBC's The Contender, which featured 2,823 product-placement occurrences in the first quarter.

6. Leading product placement agencies active in the UK include 1st Place, which claims to be the market leader, and Brand Exposure. 1st Place has been active in this market since 1991 and boasts a close relationship with WPP agencies, including MindShare and MediaCom. Its client list includes Kellogg, Dyson and VW.

7. Brand Exposure states in its mission statement that it exists to "present" (a carefully chosen word) consumer products and brand names "to TV and film production teams for inclusion in their project to raise brand awareness and provide authenticity to the environments and characters shown on the screen".

8. Changes in the broadcast codes cannot come soon enough for some sectors of the industry. The Inland Revenue is believed to have revived its interest in the legitimacy of "deals" that are deemed to be extremely valuable to advertisers but have no book value for broadcasters or production companies.

Happily, regulators and those policing this area will now be aware that one of the benefits of the market-leading Red Bull energy drink is its ability to stimulate one's metabolism, thus enhancing vigilance.



- Product placement could be seen, alongside sponsorship, as an additional revenue stream. After all, in this age of ad avoidance technologies, broadcasters need all the flexibility they can get.

- But critics argue that widespread product placement could be a short-term fix that the established broadcasters will regret.

- They argue that once advertisers have a legitimate role in one small part of the production process, they'll start seeking to interfere in other, more fundamental ways.


- Advertisers and their agencies tend to tell the sceptics at TV companies to get real. For one thing, they say, this is already big in America, so it will soon be big here. Get used to it.

- They argue that consumers are not easily fooled and won't feel that advertisers are trying to dupe them and that the inclusion of more branded products will merely enhance the contemporary relevance of much TV.

- And yes, with ad avoidance still hovering near the top of the agenda, they are desperate to explore this area.

- Many advertisers feel that broadcasters should be more confident in their ability to manage this situation to everyone's potential benefit.

They are surely grown-up enough to say no to a deal that might damage their interests.

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