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Product placement - Challenges hover just off screen 

Clement Chan explores the critical challenges to be overcome for product placement to succeed
Challenges hover just off screen

There are, of course, a number of critical challenges that still need to be overcome. One of the most important – and complex – relates to fee structures and revenue recognition. Simply put, agencies and their clients will need to start to develop a practical equation to reflect the multiple potential outcomes for product placement.What, for instance, happens to the fee structure if the programme goes global or if DVDs are produced? Attached to this are the less recognised but equally important accounting challenges that will come from revenue recognition and reporting, particularly if different brands pay for placement in different markets.

 

The industry will also need to work across the value chain to remove some of the more traditional barriers to successful product placement. In most cases, for example, creators hold their story plots close to the chest for fear of the idea being ‘scooped’ by a rival creator or producer. Advertisers, however, want reasonable assurance that their product will be used in a respectful way in a story line that – at the very least – does not run counter to their brand reputation and value propositions. Clearly, both sides will need to deposit more trust into the transaction to make it work. But changing mind-sets may prove somewhat challenging in the short-term.

 

Trust will be a central challenge across the industry. For one, the industry will need to build trust with the viewing public to reinforce the commitment that product placement prerogatives will not be abused.

 

In much the same way, regulators (particularly OFCOM) will need to build trust with the industry, not only to ensure that rules are complied with, but also to give the industry confidence that the rules will not unduly change down the road. Trust will also need to be built between the agencies working in this area and their clients on both the brand and the production side.

 

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