Product Placement

Product Placement Legislation on UK Television

Paid-for references to brands and services will be permitted in UK commercial programmes airing from March 2011 and producers will be able to offer guaranteed levels of exposure.

Product placement will be allowed in:

Films (including dramas and non-news based documentaries)
TV series (including soaps)
Entertainment Shows and most ‘factual entertainments’
Sports programmes

Restrictions on product placement:

However, it will be prohibited in all children’s and news programmes and in UK-produced current affairs, religious programmes and consumer affairs (like C5’s ‘The Gadget Show).

The product placement of tobacco, alcohol, gambling, foods or drinks that are high in fat, salt or sugar (HFSS), medicines and baby milk is banned by UK legislation.

HFSS products include: butters, oils, chocolate & sweets, sugared fizzy drinks, crisps and pizzas. These HFSS restrictions are a major point of difference with US TV product placement legislation.

The rules state that product placement must not impair broadcasters’ editorial independence and must always be editorially justified. This means that programmes cannot be created or distorted so that they become vehicles for the purposes of featuring product placement.

European and UK legislation also requires that placed products and services cannot be promoted or endorsed, or be featured in an unduly prominent way within programmes. So, the features on a Blackberry mobile phone might ‘enable’ elements of a plot or entertainment format but nobody on the show could say “Blackberry is the best ….”.

Making it Happen

Overview
These changes in product placement legislation will lead to fewer ‘free’ placements opportunities – brokered by PR agencies and prop houses – as TV production companies realise the potential of formal relationships with brands. For brands it’s a new era of pre-planned, better controlled and guaranteed placement opportunities.

Broadcaster Driven Opportunities
Broadcasters that fully fund their own flagship shows (like Coronation Street and Hollyoaks) will of course take the reins on publicising related product placement opportunities – perhaps tied to larger sponsorship deals. These are likely to be pre-packaged and costed opportunities often valued in excess of £100,000. Benefits to brands would include the rights to use a channel’s own “as seen on” logo within its marketing activities (illustration – by way of example, artworks have yet to be finalised). The programme producers who will be integrating the brands into narrative and scenes hope to receive up to 50% of this new revenue. It could be much less.

Producer Driven Opportunities
In the majority of cases product placement opportunities will be driven by production companies rather than broadcaster ad-sales and sponsorship teams. Deal packages could start at as little as £20,000.

The logic behind this firm belief is based on our understanding and experience of how TV shows are funded and what parties own the rights for its commercial exploitation. Most non-BBC programming isn’t fully funded by a single broadcaster and is the result of often complex international deals brokered by production companies that retain their rights.

These production companies see relationships with brands working in three ways:

1) Brands as ‘deficit funding’ stakeholders in the creation of the programming – for which they could be offered placements, potentially as part of a wider package of intellectual property rights that would help leverage the off-screen brand association to the show, it’s cast and/or presenters.
2) Offering brands a placement deal that included a specific presenter/star as an off-screen brand ambassador/advocate.
3) ‘Advertiser Funded Programming’ – where brands fully fund programming in return for the sponsorship banners, placements, part ownership of the content and often a share in international sales and other intellectual properties. (The new legislation now allows brands to place their brands within shows that they sponsor).

“We think that it [product placement] will probably have the biggest effect in promoting advertiser-funded programmes within which a brand could have an appropriate presence or in amplifying the effectiveness of spots or sponsorships.” THINKBOX

Guideline for Costing

Overview
UK models and metrics for product placement are still in their infancy – it’s unlikely to be a universally ‘rate-cardable’ activity because it’s open to so many variables. Effecting factors would include whether the brand placement was verbal and/or visual, its prominence and interaction with celebrities and to what extent that association could be used/activated off-screen.

The base-line for costing will be the 30 second TV spot – the worth of the placement’s equivalent ad-space.

Whether the placement was valued at above or below the baseline would depend on the level of exposure:

Passive Brand Exposure
When a brand’s logo appears within programming but the product or service is neither ‘seen in action’ or referenced verbally. Analysts currently consider that this should be valued at 30% of the worth of equivalent spot advertising.

Active Product Branded Integration
This is considered to be the most valuable form of placement. The use/consumption of the branded product is integrated into the program and referenced verbally. Analysts currently value this at 200% of the worth of equivalent spot advertising.

Useful Links:

BBC Licence Fee Funded Television Services and Product Placement