For television advertising in the UK, 28 February 2011 represents a significant date with product placement being allowed for the first time on UK television programmes. This offers advertisers a major new opportunity to promote their brands and products and a much needed additional revenue stream for broadcasters and producers alike. It does, however, come with both limitations and risks which must be managed for the placement to be a success.
What is product placement?
There is often confusion over what product placement actually means. In general terms, product placement is where a product or a brand is included or referred to within a programme where the inclusion or reference is for a commercial purpose and is made in return for the product or brand owner making a payment or giving some other form of consideration to the programme producer. For example, a manufacturer of a branded mobile phone might pay a producer to include shots of the mobile phone in its programme in return for the payment of a fee.
Product placement should not be confused with the use of props within programming. Prop placement has long been permitted in the UK and is frequently employed by broadcasters, producers and advertisers. Prop placement usually involves the inclusion in a programme of a product that is not of significant value and there is no payment or other consideration passing hands for its inclusion. It is often more cost-effective for a producer to solicit products needed for a programme rather than buying them a full market price but the products are provided at no or minimal cost to the brand or product owner.
What is the UK's position on product placement and why has it changed?
For many years product placement has been banned on UK television programmes. That's not to say that UK consumers haven't been exposed to product placement. Quite the reverse. Although consumers may not always have been aware of it, product placement in films and international programmes (most noticeably US television shows) has been permitted on UK television for many years.
Recent changes to European broadcasting legislation were a catalyst for the UK government to review its traditional ban on product placement and a number of factors combined to influence its decision to relax the ban. Other European member relaxed their own restrictions, moving more in line with the position in the US and leaving the UK increasingly isolated. New technologies allowing consumers to skip traditional spot advertising and the downturn in broadcasters' traditional advertising revenue and the consequent financial difficulties being faced by commercial broadcasters all combined to influence this change.
Following extensive consultation - and a government U-turn along the way - the Communications Act 2003 was amended in April 2010 to remove the general prohibition on TV product placement. As part of these changes Ofcom was required to put in place a new set of rules to govern product placement. These rules were published in December 2010 and are now included within Ofcom’s Broadcasting Code (the "Code").
So from 28 February 2011 TV programmes that are made for UK audiences may contain product placement provided that they comply with Ofcom's strict rules. These rules will apply to all programmes broadcast on Ofcom licensed channels, including some that are broadcast outside of the UK.
What restrictions will limit product placement?
It's important to be aware that although product placement will now be permitted a ban continues in place over certain products and programmes and strict controls will apply where placement is allowed. Ofcom's product placement rules are strict and govern (a) what type of products can be placed in programmes, (b) what programmes may contain placed products and (d) how those products may be featured within the programme. Ofcom also requires broadcasters to include a specific product placement notice on all programmes containing product placement so that consumers are aware of it presence.
(a) What products may be placed in programmes?
Under the new regime any product may be placed in UK television programmes provided it does not fall within Ofcom’s extensive list of banned products which include:
- cigarettes and other tobacco products;
- alcoholic drinks;
- gambling products;
- food and drinks that are high in fat, salt or sugar, often referred to as HFSS food and drinks;
- baby milk; and, importantly
- any other products that cannot be advertised under current advertising restrictions (including, for example, offensive weapons and escort agencies).
(b) What programmes may contain product placement?
In general, product placement will now be allowed in films (including dramas and documentaries), TV series (including soaps), entertainment shows and sports programmes.
Product placement will not be permitted in any children's programmes (being a programme watched primarily by under 16s), news programmes, UK produced current affairs, consumer affairs and religious programmes. In addition, product placement will not be permitted in programmes produced for the BBC although it will be permitted in programmes acquired by the BBC or in programmes produced or commissioned by the BBC's commercial services.
(c) What controls govern the manner in which the products are portrayed?
Ofcom's rules place strict controls over how a product may be depicted in programming. Above all, broadcasters must maintain their editorial independence and control over programming.
There must be editorial justification for the inclusion of a product or reference to a brand. In practice the product or brand must be relevant to the content of the programme which must not appear to have been created or distorted so as to allow the product or brand to be featured. Equally, the programme should not give any undue prominence to the product or brand. For example, characters in the programme should not express a view as to how good the product is or make an unnecessarily large number of references to it.
Finally, there must always be a distinction between editorial content and advertising so that viewers are protected from surreptitious advertising. With this in mind, broadcasters will be required to display a product placement notice to ensure viewers are aware when product placement occurs.
(d) Use of product placement notification - "P"
Broadcasters must display the product placement notice - a designated "P" logo - for three seconds at the start and end and after any advertising breaks within a programme containing product placement. To maintain the status quo, however, broadcasters don't need to display the notice on programmes that were originally broadcast outside the UK (for example, a US sitcom that is shown in the UK).
Legal and Compliance Issues
All interested parties must be aware of, and ensure they comply with, Ofcom’s rules governing product placement.
Aside from these rules, the issues which affect broadcasters, producers and advertisers are similar to those relating to sponsorship arrangements. Primarily, the broadcaster or producer will want to know that the advertiser has the right to license use of the product or brand and that it will receive payment for such use. In contrast, the advertiser will wish to ensure that its product and/or brand receives the prominence within the programme that it expects. Equally, the advertiser may require some right of review to ensure the programme's content is suitable for an association with its product. The advertiser might also wish to obtain additional usage rights to enable it to use extracts of the programme for its own promotional purposes. These issues - together with a number of ancillary provisions to protect both parties - should form part of any negotiations and product placement agreement entered into by the parties.