In February 2011, OFCOM ruled that product placement was permissible in UK TV content – subject to certain guidelines dictated by OFCOM. Since then, the media sector has done little more than to gently dip its toes in to test the water. However, I believe product placement is the next big thing in UK media.
There are three core reasons for this. Firstly, the way in which we consume media nowadays means that traditional spot advertising simply doesn’t deliver the value it once did.
So much of our media is consumed on-demand and so many viewers leave their seats or surf the net during advert breaks that spot adverts are not eyeballed like they used to be. Furthermore, whereas media content is now digitised (giving it longevity and allowing it to reach overseas audiences), ad content is not typically included.
Product placement on the other hand integrates brands or products directly into the main body of content, thereby maintaining, if not increasing, the eyeball rate and giving better coverage and reach.
Secondly, product placement changes the revenue stream for the value chain. The upfront injection of funds from brand owners gives greater financial stability. This allows production companies to focus on creating better pilots and full-blown content and inevitably helps breed greater creativity in the industry.
Thirdly, I don’t think there will be the kind of audience backlash that the nay-sayers would have had you believe was inevitable once the barriers to product placement were removed.
Product placement has been around for years in the movie and book industry – and no-one has complained. James Bond alone has done more than his fair share to help boost the sales of luxury goods such as watches and sports cars.
I think UK consumers feared that product placement was going to transform our favourite programmes into something like The Truman Show. The reality is very different. I guess very few people have even spotted the first ever product placement in Coronation Street .
I think viewers aren’t going to mind too much once they see what product placement actually entails. Big name brands, logos, infrastructure or even uniforms are everywhere in our day to day lives so having them embedded in media content will serve a complementary purpose, rather than a disruptive one.
Look at it from a different angle; isn’t it more off-putting to see current fictitious brands employed by some programmes or the products turned away from camera so you can’t see the name, even though you know full well what it is?
What that viewer acceptance will herald is the establishment of a multi-million pound industry which will emerge to facilitate joining up the various elements of the broadcasting value chain.
Furthermore, I would suggest that within three years, we shall see the first million pound product placement contract.
If that sounds excessive, ask yourself how great a value Vauxhall or Ford may now place on the BBC’s decision to put DCI Gene Hunt behind the wheel of one of their cars as opposed to Audi’s Quattro in Ashes to Ashes, a programme with an average UK viewing figure of 6.8million which has been exported to 20 countries worldwide.
What the typical viewer won’t see is what will happen behind the scenes in terms of new revenue streams coming into the industry – and how, in time, this should prove beneficial to all industry players and improve content quality.
Media production is a ruthless business. Content is often produced with no guarantee it will ever hit the airwaves. For that reason, many production houses employ virtually all their staff on a freelance basis.
However, if a major brand owner now pays a content producer to feature their products or brands in a forthcoming programme, this upfront funding creates a ‘safer’ environment within which the producer’s creative staff can work and thus produce better content.
The channels will know about this and will squeeze the producers to accept a lower price per episode. The producers can acquiesce, knowing they’re still more profitable than they used to be, thanks to the product placement investment.
The broadcasting platforms will also want a piece of the action and will change their negotiation stance with the channels. Everyone gets a little richer thanks to the brand-owner’s largesse – although it will be several years yet before the effect will be felt as far down as the lower tier broadcasters.
However, the benefit to those brand-owners is obvious as it’s all about the longevity of content in today’s multi-platform digital age. In ten years’ time, today’s spot adverts will be long gone but the product placement deals will live on in satellite channel repeats, exports and DVD sales.
Let’s be clear though; this is not a case of one form of advertising replacing another. Instead, the two will exist side by side for the foreseeable future. TV content still needs natural breaks so unless you’re absolutely hell-bent on finding something else to do for three minutes, you’re going to end up watching some adverts.
What will be fascinating here is the way in which the dynamics of the industry will shift and the way in which deals are creatively constructed.
Product placement will be a hugely competitive arena. In a typical ad break, you could maybe showcase 6-8 products. In a piece of actual broadcast content, there’s going to be just one or two.
That’s why an industry of middle men and brokers is going to spring up. That’s why major broadcasters without much production capacity of their own will soon look to buy their way into the production industry – because the potential new revenue streams look so enticing.
And because the UK public will actually prove a lot more accepting of this than some may have initially thought – that’s why product placement will be the next big thing in UK media for the next decade.