The timing is also ripe for content creators and producers to embrace product placement. Any industry insider will tell you that funding has become increasingly tight for creators and producers, particularly those in the early stages of content development where pilot episodes are often hammered together on shoe-string budgets.
Product placement can help change all of this. Working with ad agencies and the brands they represent, content creators can tap into a source of ‘start-up’ funding to support the development of their shows. Imagine the return that brand owners could achieve by investing a relatively small amount in a start-up show, thereby enabling them to essentially lock down the right of first refusal in product placement versus the investment they would have to make once the programme has gained popularity.
And, if properly structured, these early deals can prove rather lucrative for both the creators of popular shows and the participating brands. Take, for example, the US$60 million that Coke injected into American Idol (which returned up to US$12 million per episode for the brand) , or the US$2 million that brands paid for placement in just one episode of The Apprentice 7. Clearly, there is much money to be made by those savvy content creators who hold popular assets.
I would also argue that product placement catalyses greater creativity in the production process – not by creators rearranging scripts to suit brands – but rather by increasing the level of funding available to content developers which, in turn, will enable creativity and allow pilots to be produced at higher quality.
Indeed, as the economy continues to sputter and producers implement deeper and deeper budget cuts in the development phases of content creation (due, of course, to the downward pressure on advertising revenues), I believe that the timing is right for the television industry to earnestly explore the potential that product placement offers.