Odds Still Good on Product Placement

Michael Hedges January 13, 2010 Follow on Twitter

For television producers, product placement is like having your cake and eating it too. Widely considered financial salvation, the fine art of sticking a branded product in a TV show has more critics. But even advertising people are wary.

The UK Ministry of Culture recently completed (January 7) the public consultation on product placement. Needless to say, every side to the question got its airing. Culture Minister Ben Bradshaw favors changing the current laws. Others – from medical associations and childrens’ rights groups to consumer protection organizations, the Church of England and drinks marketers oppose.

Advertisers, too, are cool to product placement. “Advertisers paying more to place their products might then naturally expect to see them placed more prominently, and it is this greater visibility that may well increase complaints from viewers,” said Incorporated Society of British Advertisers (ISBA) spokesperson Bob Wootton.

Poland’s Ministry of Culture also favors legal product placement. Poland’s newspaper publishers fear more ad spending will shift away from their pages. “Television already has half the advertising market,” said Press Publishers Association director Maciej Hoffman to Gazeta Prawna (January 10), “and now it will have even more opportunities. Publishers are in a much more difficult situation.”

Poland and the UK, like all EU Member States are under pressure to bring media rules into compliance with the EU’s Audiovisual Media Services Directive (AVMS), part of the Lisbon Treaty. Commissioner Reding casually mentioned (December 21) the possibility of infringement proceedings for those not moving quickly to comply. At the end of the year only three Member States had fully adopted rules in harmony with AVMS – Belgium, Romania and Slovakia. The two most contentious regulations are the 12-minute per hour limit for ads on TV and authorization of product placement.

“Two years ago, industry and consumers were already waiting impatiently for new, more flexible EU rules that remove outdated bureaucratic red tape and take account of new technological developments,” said Commissioner Reding in a statement. “We updated the EU TV rules to make Europe’s audiovisual industry more competitive. I urgently call on EU countries to adapt their national laws to ensure that new advertising techniques enabled by the AVMS Directive are also possible – there can be no excuse for any more delay with their implementation. The Commission will not shy away from using its powers under the Treaty to ensure this happens effectively”.

When the European Commission revised cross border television rules, product placement figured prominently. DG Info Society and Media Commissioner Viviane Reding supported changes in EU law to allow, with certain reservations, television producers to take money for placing branded products in dramas and comedies. The final draft, after arduous negotiation, came into effect with more restrictions, giving Member States complete latitude to take or refuse the money.

The most vociferous critics of product placement traditionally have been those concerned about blurred lines between advertising and ‘editorial’ content, particularly when money changes hands. Swiss Parliament member Christoph Mörgelirecently (January 10) questioned Swiss German public television (Schweizer Fernsehen -SF) when a fish import company featured prominently in a documentary about life on the Mekong Delta of Vietnam. Everything was on the up and up, said a SF spokesperson, and no money changed hands. 

“We’re very excited about the possibilities,” said Endemol’s Alistair Roberts to Product Placement News (January 8). “It’s not the answer to all the ills of the industry but the TV market is under pressure because of the recession.” Reality TV shows in the United Stated are product placement magnets. Any given episode of “American Idol,” according to Nielsen, can have more than 400 products shown. 

Estimates for product placement spending in the UK range from £50 million to £150 million annually. In the US product placement is a US$2 billion business. Everybody would like to get a piece of that.

In truth, producing television is expensive, more so every day for those interested in attracting or holding audiences. American television network NBC tried to save money by moving a late night talk/variety show to prime time. Talk shows are very, er, cost effective. It was a dismal failure.

Despite criticism bets are on product placement reaching European television screens. Irish on-line book-maker Paddy Power was even giving odds (January 4) on the first brand marketer to reach UK audiences by placing products or logos. By 2 to 1 odds, McDonalds could take the cake.

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