Product Placement in the UK: A Progress Report

Product Placement in the UK: A Progress Report

Commissioned by BrandChannel

On 9th February 2010 the UK Government announced that paid for product placement would be permitted; Ofcom, the regulator, undertook its consultation and published new guidelines which allow limited and restricted “paid for” placement from 28th February 2011.

So four months later what grass roots changes are occurring? Is “paid for” product placement changing the commercial arrangements of product placement? What effect has it had on the established free prop product placement?

Free prop supply and “paid for” product placement both offer the same thing; it’s just with “paid for” you get to pick the programme you are in and have the option to develop off-screen promotional opportunities at your own cost.

Ofcom’s Product Placement Guidelines hold the broadcaster responsible to ensure no undue brand prominence; maintain complete editorial integrity without interference from brands; avoid surreptitious advertising; and no promotion of the featured brand.

Ofcom’s Guidelines are explicit, and some would say, conservative, so it is surprising that some of the proposals on offer, prima facie, seem to breach the guidelines. Proposals have included a guaranteed number of brand appearances and brand exclusivity which conflict with preserving editorial integrity and undue prominence; offers to show posters which conflicts with the surreptitious advertising prohibition designed to ensure that licensees do not increase their advertising quotas by a back door route.  It’s a serious matter since Ofcom can fine licensees up to 5% of their qualifying revenue for breaching guidelines. (In 1994 Granada TV was fined £500k by ITC, Ofcom’s predecessor, for undue prominence on its show “This Morning” and in 2001 LWT was fined £100k for product placement.)

One might think that these restrictions would have created a soft pricing approach? Pricing, however, seems to be opportunistic with a guide £100k minimum for a brand placement in a short series, up to £3m for a year’s exposure in a soap with activation rights.

So let’s benchmark “paid for” pricing. Rough and ready, but what else could a client looking for these associations buy?

Free prop supply product placement is the obvious first port of call. Free prop placement has been around 27 years since NMG Product Placement established the formal UK market. A great number of big brands have embraced free prop for many years, similar Ofcom restrictions apply, and methods of evaluating payback and reporting results are well established.

In NMG’s case our clients have helped create and evolve our evaluation system Tracker™,  contributing insight from the brand owners’ point of view, and comment and help from their media agencies.

So what would £100k spent on free prop placement services buy you? Depending on brands and brief, a year’s worth of work, maybe two years. And placement in 20 to 50 separate productions, placement on BBC TV which is not open to “paid for” deals and placement in say, 10 feature films.

What about £3million for the soap exclusivity I mentioned above? You could just buy 260 x 30 second advertising spots, guaranteed exposure, and guaranteed message.

Or buy into a blockbuster movie? Around £100k to £600k gets you control of the script, time to plan tie in promotions, and incredible imagery, association with real “A” list stars and no regulatory interference – and you pay when you see the onscreen result.

Two interesting trends are emerging due to this apparent over pricing of opportunities, given that the brand cannot have any direct editorial control and the restrictive guidelines designed to actively minimise brand exposure.

Two of NMG’s clients are taking time out from “paid for”. They see no reason to create a market whereby their entry itself would support inflated pricing and encourage programme makers to play competitive brands off against each other. We also have “own goals” from programme makers.

“Paid for” opportunities are offered too late, at too high a fee, a few weeks later become free prop supply projects with the production staff contacting NMG desperate to source the same products as props, but this time for with no expectation of any payment!

The way forward? For the embryonic “paid for” product placement market to grow it needs to relate to the well established free prop supply business.

Free prop product placement has an existing value chain, with major clients experienced in using our established evaluation techniques. Free prop has 27 years’ experience of introducing brands into content and of operating within Ofcom guidelines. NMG has never had a single regulatory complaint, ever.

This vital experience is there to be shared. Yet, no one from the broadcasters has accepted NMG’s offers to share this knowledge and open up our brand databases. Perhaps, before re-inventing the wheel, it might be worth talking to the people who designed and built it in the first place?

References:

UK Government Announcement: http://webarchive.nationalarchives.gov.uk/+/http:/www.culture.gov.uk/reference_library/minister_speeches/6624.aspx

OfCom Guidance Section Nine of the Broadcasting Code (2011) Commercial references in television programming: http://stakeholders.ofcom.org.uk/binaries/broadcast/guidance/831193/section9.pdf

This report first appeared on BrandChannel on 14th July 2011: http://www.brandchannel.com/brand_speak.asp?bs_id=290

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