Latest NMG Research – Hollyoaks
Channel 4/Lime Pictures seek £12m of “paid for” product placement deals
Since “paid for” product placement was permitted on 28th February 2011 NMG Product Placement has undertaken a number of research studies. Our goal is to encourage, intelligent, open debate and an exchange of information to encourage the stable, profitable growth of this new market.
Clearly, there are new challenges. The “paid for” market will have to co-exist with the established free prop supply one. Thus whilst there will be some cannibalisation, many of the trends, experiences and practices established over 27 years of free prop supply, are highly relevant to the new “paid for” market. For example, OfCom’s rules of no promotion, nor undue prominence and preserving editorial integrity apply equally to both “paid for” and free prop placement.
Product placement measurement, by the very definition of tracking popular brands appearing in content is not about absolute values. NMG’s Tracker™ system represents industry best practice and provides census data. Tracker’s™ value is in determining trends, analysing competitive performance using share of voice analysis, and for defining the brand opportunity universe within a production.
The Hollyoak’s proposal includes activation and licensing rights as part of the “paid for” placement fee without attributing an amount for those rights. Likewise, the inherent worth of these rights will vary from brand to brand, and sector to sector. Hollyoaks utilises total audience data including repeats; NMG’s Tracker™ uses first run audience data only. Thus, strict comparison between the Hollyoaks proposed fees and NMG’s Tracker™ media values would be unfair, but taken with the recorded number of actual placements and their on-screen secondage, a lot can be learned
NMG’s Tracker™ data on Charts 1 and 2 shows the branding featured in Hollyoaks over the 12 months to 15 June 2011. The paradox we examine in this report is given OfCom’s strict rules against brands interfering with content, how can Hollyoaks deliver results worthy of £12m?
The C4/Lime proposal highlights up to £12 million worth of product placement opportunities. It attributes values to six brand categories and following sealed bids, envisages signed contracts by 8th July. The wish list covers: Fashion (£ 1.5- £2m), Technology & Telecoms (£750k-£2m), Health and Beauty (£1.5m- £2m), Retail Finance (£500k-900k), Coffee & Retail (£1.5m- £2m) and Film & Music events (£500-900k). It is expected that the first brands will appear on-screen in August or September. C4/Lime’s ‘Product Placement Prospectus’ includes off-screen licences and promotional rights; e.g. using Hollyoaks cast personalities as a PR tool and tie in competitions.
NMG Chart 1 shows the branding actually appearing in the show over the last 12 months, as closely as possible correlated to Hollyoaks’ categories.
Technology and telecoms boasts the current highest number of placements – 51 over the year. However, the C4/Lime proposal offers 49 featured placements, each month, a total of 588 in a year with recognisable branding and on-screen usage. Existing onscreen mobile phone usage has hitherto been limited to cheaper models with few Smartphones:
Taking another sector, Health and Beauty, The Hollyoaks Spa – Cinergy – is one of the most heavily used sets. This category, available for up to £2m, offers 240 brand appearances, including home and retail. However, NMG research showed that only 30 placements appeared in the last 12 months, media value £26.3k of which “Love me Naked” was the predominant brand:
The expectation of good results for say, coffee, versus a historic lack of exposure, may rest in Hollyoaks official website which reveals that a coffee shop will open in the Hollyoaks Community College Campus later this year which could be a strategy to create placement opportunities.
Likewise, the absence of results in retail finance lies in the unbranded cash point machine currently used, which would be branded, a second one installed, and branded point of purchase terminals used.
NMG Chart 2 demonstrates where Hollyoaks does deliver branding – in particular the alcohol sector, where “paid for” placement is not allowed. Hollyoaks target audience is primarily young adults and teenagers, however between June 15th 2010 and June 15th 2011, accumulative brand appearances for alcohol totalled almost 17 minutes of on-screen time, mainly in the soap’s local pub ‘The Dog in The Pond’ and Student Union Bar.
(NMG Product Placement does not supply alcohol products to Hollyoaks in accordance with our client’s marketing guidelines and industry practice).
Thus we encounter another paradox, the brands which are frequently used to create real life realism: alcohol, snacks, confectionery appear frequently and seemlessly, but cannot be sold as “paid for” placements. The brands which are allowed to be sold are often ones which appear quite infrequently, and can be more difficult to integrate.
In summary, many industry commentators do not expect “paid for” placement to generate significant funds in the near future.
Of course Hollyoaks has the potential to draw brands but David Charlesworth (Head of C4 Sponsorship, Placement & Funded content) warned in Broadcast (2 June) that bids may not achieve the value guide and that it would be more realistic to expect approximately £3 million for product placement in the first year.
Commenting on NMG’s research Paul Herbert of Goodman Derrick LLP, a specialist in media law and regulation, said: “The high levels of brand exposure offered by C4/Lime will create interesting challenges for the editorial team because of the prohibitions on undue prominence and promotional references and also the need to safeguard editorial integrity.
Additional sensitivities will also arise because of the off-screen promotional opportunities offered. Where those involve, for instance, members of the cast promoting products with which they interact in the programme, there is a danger that this could be regarded as an endorsement of the product by the character, which is a form of promotional reference.”
Michael Cluff, Partner at Madigan Cluff commented “It is to be welcomed that Channel4/ Lime Pictures recognise that paid product placement will have – and needs to have – much higher return on investment through wide scale brand activation. Yet Channel 4 appear to want to deal solely with the media agency, when the advertiser will need to use the skill base across their agency roster including prop, PR, promotional and digital agencies if they are to maximise their return through activation. For this to work, advertisers signing deals will need to be clear on which of their agencies has leadership and accountability for this activity”
John Barnard, NMG Product Placement’s Chairman, said: “The concept in business that you have to look back to move forward is a valid one. C4/Lime Pictures have a difficult task ahead, taking the existing level and pattern of branding which OfCom will no doubt use as their editorial reference point, and growing new branding opportunities without distancing the viewer.
Initially, The Government suggested that “paid for” placement could deliver up to £150m of much needed incremental programme finance, the OfCom Guidelines that resulted from their consultation actively restrict programme makers abilities to maximise this income. The paradoxes continue, as the pricing of “paid for” opportunities by the industry as a whole, with restrictive guidelines has encouraged brands to continue to invest in free prop supply, with no revenue stream to producers.”
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Tracker™ 2011 records and evaluates over 6000 brand appearances each year from over 1135 programmes on over 21 TV channels. Each brand appearance is measured to the nearest second and categorised into 5 levels of saliency. Brands are further segregated into over 110 product categories.
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