Product placement is allowed on UK television from today, but what does it mean for brands, agencies and producers? Madigan Cluff's Peter Jones and Deloitte's James Bates provide an opening salvo.
Peter Jones, partner at Madigan Cluff
After years of debate, placement is finally with us. From today, UK commercial TV stations will start to run ads designed to alert us to the imminent arrival of placement.
The introduction of a logo, in the form of a giant "P", will bookmark any UK-made programme in which brands have paid to be present.
Now, there hasn’t yet been an awful lot of noise in the marketing world about this new channel of communication.
That’s partly down to a degree of confusion as to who ‘owns’ it within the agency groups. Is this something for the brand agency? Or the media agency? Or someone else altogether?
No one is quite sure yet.
Furthermore, one has to factor in the fact that relationships between the agency world and the production companies that create the TV programming remain few and far between - and certainly not embedded.
And when people think about placement, they tend to conjure up a vision of Simon Cowell in America’s Got Talent with a supersize and heavily branded cup of Coca-Cola on the desk in front of him.
But that’s not even half the story. Sophisticated UK marketers have long understood that the key to success for their brands is about much more than mere awareness.
It’s about engagement, the creation of genuine empathy with consumers. ESP’s (as in ‘emotional selling propositions'), not USP’s. Relationship building.
So how much better to spend X to become an integral part of 55 minutes worth of programming that your audience can really identify with, than spend X multiplied by Y on the production and airing of a 40 second commercial that will, in all probability, not be focused on by the viewer.
Brand owners should be really excited about the opportunities here.
They get to create real connections with their audiences, via vehicles that have a lifetime way beyond the ad-break, in a way that allows for tight targeting and little wastage. With placement, plenty of smaller brands can be TV brands.
They can associate their brands with real characters, or ‘heroic’ action, or empathetic attitudes. And they can do this in context, not wedged between ads for World of Leather and DFS.
They can demonstrate core attributes and values in a leisured and interesting environment.
And they can take advantage of opportunities to link in with other marketing activity, such as promotions, competitions or social media.
But this is not just about the brands.
Placement will represent an entirely new funding stream for the production industry, whether the independents or the broadcasters.
As much as £200m of new money for the sector a year - 5% of UK advertising total. That’s not insignificant.
The benefits extend beyond the financial; brands add real authenticity to a plotline. Just think about the way that Apple signifies a certain type of personality.
Now brands can be used as clear signposts and to add credibility to a programme (as brands do in the real world), with the added benefit for the production company that the brand gets to pay.
So, this is a new opportunity that intelligent, strategic brand-owners will embrace as a central element of a channel neutral, integrated communications programme. And it will offer producers/broadcasters new funding streams and the chance to pep up their programme strategies.
Last but not least - what about accountability?
The good news is that placement can be planned strategically in similar ways to conventional advertising. And it can also be audited, both in terms of classic effectiveness measures, and in terms of media value.
In summary, placement has been so long in coming that it has crept up on us somewhat.
But it’s here now. And there’s going to be real first entrant advantage to be gained by brands, agencies, and producers alike.
It won’t be so much "who dares wins", rather, "who thinks about it strategically and then proceeds with intelligence wins". On all sides of the debate.
The prizes will be considerable - and enduring.
James Bates, media partner at Deloitte
Most viewers are willing to accept product placement (60%)* if it means they could get more television for free.
However, the introduction of product placement could present the television industry with some challenges. In particular, spending on television advertising could be cannibalised.
Estimates suggest that product placement could net UK broadcasters up to £150m a year, however it is not clear what impact this will have on overall television advertising spend.
A critical success factor for the industry will be to identify appropriate responsibilities and benefits between broadcasters and producers.
Broadcasters are likely to take responsibility for longer term higher value deals on their most valuable programmes and independent production companies will take responsibility for securing smaller scale deals direct with media agencies.
There are no firm answers and the industry has some work to do before an acceptable formula is found. What is certain though, is that commercial messages will soon be a lot harder to ignore.