In a dramatic U-turn, Culture Secretary Ben Bradshaw is expected to announce changes this week that could lead to the introduction of paid-for product placement by next year.
Sony products are already highly visible in Sony Pictures films, but Carl Pring, the company's head of brand and advertising, is sceptical about the benefits of product placement in third-party programming.
'With general entertainment such as Coronation Street and The X Factor, it is much harder to gauge the return on investment, because we just don't know what visibility the products will receive,' he said.
Molson Coors Brewing Company marketing director Simon Davies cast further doubt on the value of this type of advertising. 'With a TV ad, you have those 30 seconds all for yourself,' he said.
Jonathan Moore, interim marketing director at Sara Lee Household & Body Care, cautioned media owners that they would have 'to justify to advertisers that it is worthwhile'.
While some brands, including Asda and Coca-Cola , have welcomed the development, others have already ruled out using product placement.
Marc Sands, marketing director at The Guardian, said broadcasters were scraping the 'bottom of the barrel in terms of opening up editorial content to product placement'.
Media agencies and advertisers have been quick to play down predictions that product placement could bring in £100m in ad revenue.
'We estimated it will generate around £30m, which is a small amount to sell your soul for,' said Sands.
Rather than driving additional marketing spend, it appears that funds for product placement will come from existing marketing budgets.
Simon Ritterband, director of product-placement agency Seesaw Media, sought to allay fears that funds will be diverted from sponsorship. 'They don't want to see revenues flow from one area to another,' he said.
Brands' views on product placement
‘We always welcome innovation in TV advertising; take our recent use of contextual advertising around Hollyoaks where storylines from the show were weaved into ads for our new Load & Go Visa card. As with all brand communications, product placements must be relevant for the end consumer and not alienating through overt, in-your-face placement. To work it would need to be subtle and pertinent to viewers and a cost effective way of delivering a message for us.' -Sally Cowdry, marketing director, O2
‘We welcome innovation in the industry and await to hear any news from government in this area. Product placement certainly presents marketers with opportunities to reach audiences in different ways, as we've seen in other countries. We would need to ensure that what we do is relevant and responsible, that we're adding value and upholding the quality of programming. Ultimately we would consider it, as we do with all our marketing activity, if it works for our brands and our consumers.' - Cathryn Sleight, marketing director, Coca-Cola Great Britain and Ireland
‘We welcome product placement as it adds another string to our bow in effective marketing. Britvic takes a flexible approach to the media mix we use for each brand including TV advertising, AFP and PR- product placement could certainly play a role in marketing our brands. Product placement serves a very different purpose to TV advertising so it will complement, rather than replace, existing methods. We can't really comment on cost as we're still in the very early stages but no doubt it will cover a broad spectrum, just as ad spots do.' - Simon Stewart, marketing director, Britvic
‘Product placement in commercial viewing has been in existence for some time. From the more obvious examples in movies such as James Bond to more subtle but still noticeable TV placements.
In the right programme certain products can gain significant brand equity from association with either the actors or programme brand. Good examples might include youth products aligned to programming such as C4's ‘Skins' or consumer tech devices with lifestyle programming or drama. The essence of success here lies in the balance between content integrity vs. commercial inclusion.
A soap opera packed with obvious product placements from drinks brands through to cleaning products could easily denigrate the programmes integrity and distract from the viewing experience. A carefully worked series of product placements that add to both the storyline and character definition will benefit the viewer and brand owner.
As per current TV sponsorship, these should be limited and valued accordingly with appropriate guidelines on usage. If this approach were taken, I don't see this lessening revenue from with TV sponsorship or spot advertising but offering brands an opportunity to build on these and get closer to actor character and programme brands to build further equity.'- Mikah Martin-Cruz, marketing director, Samsung Electronics
‘When done well, it is an effective means of promoting your product, when done badly (and there are famous examples such as Ford/James Bond and FedEx/Tom Hanks movie) then it might be worse than doing nothing.
The key is when the programme creative idea and brand positioning and/or product message align. So positioning a bottle of Radox on the shelf of the garage in 'Pimp my Ride' may not drive brand awareness or purchase intention like placing it in the bathroom of Emmerdale in a story line about coming in from ploughing the fields and being exhausted (not that Emmerdale carries such mundane story lines any more).
Hence the challenge is how to align creatively, four options exist:
1. programme makers develop creative ideas and then look for appropriate products/brands
2. programme makers develop creative ideas with an idea of which brands they would like to attract built into them
3. Co-creation of material between brands and programme makers
4. Brand story to squeeze into programme creative ideas (in effect, asking for plot and script direction)
All four are possible, and no.3 seems like the most likely to start with, given the relative inexperience of both sides at this stage
If we spent our media money on this it would either come from existing budgets, or, if incremental, it would have to be self funding. This isn't a recipe for media owners to make a quick additional buck without being able to justify to advertisers that it is worth our while too. But if there is a win-win situation that can be developed then that's great.
Like all new channels, it has potential and is relatively uncertain and unknown. In the early days we should therefore expect to see both product placement that is brilliant in its concept and effect, as well as some disastrous examples, both creatively and in effectiveness. All of us will be trying to be the former and not the latter. - Jonathan Moore, Interim Marketing Director, Sara Lee H&BC.
‘It lacks integrity when it comes to marketing. For some brands it might be appropriate but not for the Guardian or the Observer. It's a slippery slope for broadcasters. It's the bottom of the barrel in terms of opening up editorial content to product placement. The moment it is paid for it will be open to abuse, I feel really uncomfortable about it.
It opens up a whole avenue in relation to integrity and risks flouting what ever guidelines are put in place. There is no benefit to the viewer. Any money generated will go straight to the share holders. We estimated it will generate around £30m which is about 2% of total revenue, this is a small amount to sell your soul for. They have a lot more to loose than they have to gain. We frequently allow the titles to be used as props for free, but we wouldn't pay.'- - Marc Sands, marketing director at The Guardian
‘We have no plans at the moment to use paid for placement. We will look at how it develops.' -David Walker, Kellogg's marketing operations controller.
‘Will brands pay for products in Corrie rather than a TV ad spot? No. Will some pay for products in Corrie as well as their usual TV ad spot? Yes.
Product placement is a channel like any other, and like any other the key to successfully marketing a product using that channel is relevancy. If it is relevant for a brand to be placed in a suitable TV programme, then a good agency will do that. If it's not relevant, then they shouldn't.
As with the recent glut of brands wanting "a social media campaign" we can be sure that some brands will now approach their agencies and want their products placed in TV programmes. This is the point that will sort the wheat from the chaff.
If it's relevant, a good agency will do it. Less good agencies will place their clients brands without strategic thinking and we'll end up in a similar situation to the social media world: irrelevant, ill-conceived campaigns that make it difficult to see the strategically relevant campaigns that truly add value to a brand.
The intricacies of this channel will play a vital part of the success of campaigns. Will brands have control over how the placement works? What about how overt the placement is? Will there be a number of agency representatives when Corrie is filmed and will they have a say in how a specific scene is shot? And what of the psychological and moral implications of promoting a brand in this way? Will it only be Corrie, or will factual programmes be used too?
These issues will be ironed out as the channel matures, but they'll be ironed out in public, with an expectant audience.' - Mark Hadfield, planning director, NexusH
‘Reckitt Benckiser welcomes the expected news that limited product placement is to be allowed on UK commercial channels. We see it as a complementary media vehicle to our normal advertising, but not a replacement. It will be mainly useful in driving brand awareness, though we will continue to focus on our normal advertising to deliver the depth of brand communication.
We will be exploring the possibilities for placing our brands in relevant onscreen situations (such as using Finish tablet in a dishwasher in Emmerdale), but be taking care to ensure that any placement will be in keeping with the programme environment and not detract from viewers' entertainment. We feel that that overtly prominent product placement could be a risk, as any negative impact on viewer enjoyment and so ratings could reduce the effectiveness of our normal spot advertising.' Phil Thomas, UK marketing manager, household and personal care, Reckitt Benckiser
‘Kleenex is for product placement as long as there is a clear rationale for the product being there, i.e. a box of tissues on a living room table during cold and flu season makes absolute sense - in any case we are often asked by television companies to provide tissues. if it is too blatant it will turn consumers off and manufactures will stop doing it as it will not yield the return on investment required.
Ultimately it will probably come from existing budgets and will be a case of marketers deciding which media channel delivers them the biggest bang for their buck. - Marc Zander, Kleenex marketing manager UK & Ireland
‘It's not worth anywhere near £100m, if there was this amount of money floating around ready to be invested we would be able to see it. This figure is just crackers. No one knows how much it will be worth yet. This estimation comes out of what it is worth in the US but that is an established market. In the UK I would hope it would be more subtle and integrated. I'd estimate it's worth a third of what's being estimated.
I'd guess it would cost more than a 30sec ad spot - it does in the US, but hard questions will need to be asked about what it is worth. When it comes to ROI the issue is increasingly complex.' Rhys McLachlan, head of broadcast implementation, MediaCom
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