Media: All about ... TV product placement

Rules allowing the practice are set to come into force.

So, at last, it's all systems go on television product placement. Not before time. Since the practice was first mooted, seemingly an aeon ago, as commercial television's next surefire goldmine, it feels as if whole battalions of broadcast sales directors have cashed in their chips and retired to the golf course.

Now we're almost there. As of 28 February, product placement will be allowed under new Ofcom guidelines - but not until broadcasters have run a mandatory campaign explaining to viewers what they can expect when this scary new phenomenon hits their screens.

The big news last week was that ITV Creative has been handed a brief to create the spot. And most of the UK's mainstream broadcasters, including ITV, Channel 4, UKTV and various channels represented by Sky Media, have agreed, in principle, to run it when it's ready. Channel 5 has yet to commit.

There are, unfortunately, a couple of little hurdles to be negotiated. For instance, one of the primary goals of the promo will be to explain to viewers that a programme including product placement will be flagged at its start with a prominent onscreen logo. The problem is that the logo in question has yet to be unveiled by Ofcom - though we believe that it is likely to take the form of a big letter P.

So the promo may not quite be ready to hit our screens at the end of February. When it does, however, the plan is to run it in peaktime programming for around two weeks, thus ensuring that most sentient beings will see it at least once.

And actually, the marketplace is beginning to realise that there's probably no real rush. There are lots of people (from various broadcasters, production companies, media agencies and advertisers) talking to each other across town - but nothing concrete, it appears, is imminent.

In fact, we're only beginning to realise what a fiddly old business product placement is likely to be. The hurdles here are proving more difficult to negotiate than many had anticipated. When we'll see some products placed in programmes is currently anyone's guess.

1. The new Ofcom rules will formalise and clarify what has been, for decades, a rather grey area. Advertisers of more glamorous or big-ticket products (for instance, car companies and, more recently, mobile phone and computer hardware manufacturers) have always employed specialist agencies to offer products to production companies, to be used as onscreen "props". This market is worth more than £25 million a year in nominal media value (though the convention has always been to pretend that no hard cash changes hands).

2. Product placement, in contrast, will involve a brand being more formally and overtly woven into a production - and it is expected that the first instances will appear in dramas, probably soaps such as Coronation Street, Emmerdale or Hollyoaks.

3. The new Ofcom code was published in December 2010, following years of lobbying from broadcasters - not least ITV, which has argued that it needs new sources of revenue if it is to meet the various demands of its public-service programming remit.

4. Ofcom rules restrict the way in which products can be integrated: placement must always be "editorially justified"; programmes cannot be created or distorted so that they become vehicles for brands; and products cannot be featured in an unduly prominent way.

5. There is a blanket ban on the placement of alcoholic drinks and foods high in fat, sugar and salt; and programme categories where placement will be excluded include children's programmes and news bulletins plus UK-produced current affairs, consumer affairs and religious programmes.

6. In culturally comparable countries with a mature product placement market - the US, for instance - product placement accounts for around 5 per cent of the TV revenue total. In the UK, that might equate to something between, say, £150 million and £170 million - in other words, roughly the size of the UK's current sponsorship market. But the UK restrictions banning alcohol and foods high in fat, sugar and salt will reduce the sector's potential, so we're probably looking at a market that will top out, based on current prices, at somewhere around £120 million. At the pessimistic end of the spectrum, however, some observers reckon this is a market that will struggle to reach £5 million a year.



- They've been begging for this new revenue opportunity for donkey's years. Now they face the (seemingly daunting, initially at least) task of actually making it happen.

- David Charlesworth, the head of sponsorship at Channel 4, says: "Everyone is talking to everyone else - broadcasters, independent producers, media agencies. There are more people involved than in sponsorship - but the broadcaster really does have to be involved right at inception, not least because we are the ones regulated by Ofcom. We have to be sure we're compliant."


- Media agencies have long had specialist content divisions - this is a new opportunity for them to shine. Chris Lockwood, the head of invention at Mindshare, comments: "Our branded content specialists for TV, film and digital within our invention department will work closely with programme producers and broadcasters to bring the opportunity to life for our clients."

- It is expected that budgets will be found, not from the traditional spot airtime pot but from incremental content, engagement and experiential allocations. Neither broadcasters nor media agencies will seek to include this spend in yearly agency deal negotiations.


- Once the obvious existing properties - the mainstream soaps - have been co-opted, the most creative new ideas in this area may well come from the sorts of independent production companies that have been working with media agencies to develop advertiser-funded programming initiatives. In fact, Mark Wood, a founder of the AFP sales agency Krempelwood, says: "AFP and product placement may now develop in a mutually beneficial way."