Arif Durrani: head of media, Campaign
Arif Durrani: head of media, Campaign
A view from Arif Durrani

Product placement on UK TV is not so much a damp squib, more a non-starter

Blink and you might have missed it, which in many ways is rather apt, but last week marked two years of product placement in UK TV programmes. To call it a damp squib would be to underplay the non-starter product placement has so far turned out to be.

It seems almost comical now, but product placement took two full years of lobbying led by our broadcasters, which even managed to overturn an outright rejection of it in March 2009 by the then Culture Secretary, Andy Burnham.

The minister cited "concerns about blurring the boundaries between advertising and editorial", but his remarks, set against a global economic meltdown, were slammed as "perverse" by ITV. Even the European Commissioner, Viviane Reding, was "astonished" by our Government’s decision to "oppose a source of revenue for its creative media".

'It seems almost comical now, but product placement took two years of lobbying led by our broadcasters'

And what a revenue source it has turned out to be. The UK producers’ alliance, Pact, expected it to inject £72 million into the TV sector, while media agencies set their sights on about 5 per cent of the spot ad market, equivalent to around £160 million. Talking to agencies this week, the best guesstimates place the value of product placement last year at £5-10 million tops. That’s the kind of financial gulf even George Osborne would be embarrassed by.

The tentative start by Nescafé flashing its Dolce Gusto machine on ITV’s This Morning set the tone for a cautious exploration in the new space. There have been notable successes, with Samsung said to be delighted with the airtime afforded by X Factor judges using its tablets and Channel 4 tracking "significant shifts in brand perception" after its Hollyoaks partnership with Nokia Lumia. But such examples remain few and far between.

Analysts at KPMG maintain that product placement is a sleeping giant, with the economic downturn and last year’s sporting events distorting the way brands invest. But if product placement is to significantly alter the way UK TV programming is produced, financed and consumed over the next few years, then a major turnaround is required.