Published on April 20th, 2011 | by Ebiquity Team

Ebiquity Opinion: The future for product placement

The first in a series of papers intended to create debate and discussion. Ebiquity share the key findings from the Madigan Cluff/ Ebiquity roundtable on Product Placement.

So where are we now?

Placement went live in the UK on February 28th when a coffee machine was a paid placement in ITVs’ “This Morning”. This is part of a wider change in the legislation across Europe which has seen paid placement become available in almost all European markets.

The general belief in the UK is that commercial stations are letting the market develop slowly. This both reflects concerns that too much placement happening on screens may lead to a negative reaction from audiences, but also the fact that some broadcasters are trying to create placement as a premium opportunity while seeking to avoid cannibalisation of existing revenues.

The major stations are keen to be seen as the gateway to booking placement, although it is clear that production companies are wary that this may lead to a bias in favour of in-house production and a diminution in the total available revenues.

ITV have laid down principles with the major production companies which are as follows:-

1. Broadcasters and producers have agreed a mutual right of veto on any deal. Both ITV and the producer can each decide that the deal does not make sense to them.

2. ITV wished to position themselves as the point of go-to-market. They will be sending out fliers to all interested parties (potentially media agencies, creative agencies, PR companies, placement agencies) listing out the available opportunities in programmes. They will then enter into discussion with any of these parties to do a deal.

3. ITV has set out broad terms of trade. A base fee will be agreed against a detailed itinerary of where and how the brand will appear in the programme. Should the programme be repeated within 6 months, then ITV will charge an additional 50%. Further repeats and any exports will be free. 50% of the fee will be payable on signature and 50% following transmission and agreed evaluation procedures.

“The general belief in the UK is that commercial stations are letting the market develop slowly”

Regulation

The regulation of placement is controlled by Ofcom. Stations will be liable under their broadcast licenses for any failure to observe regulations and can be liable to fines. Regulation is set around a broad set of principles:

1. Editorial independence
2. No undue prominence
3. No thematic placement
4. No placement of alcohol, high-fat foods (UK only), or gambling
5. No placement in news, children’s or specialist factual programming

There is a lack of detail within the regulations and therefore it is likely that what is really allowable on screen will effectively develop as broadcasters try out concepts.

In the UK a small P must appear on screen in the programme indents at the start end and commercial breaks of programmes. This is broadly in line with other European practice, where there is either a small or near invisible signal that placement is inside the programme.

Programme concepts and what could become available?

Production companies are at pains to be clear that they still very much value the prop placement business where products are provided free in return for being seen. They wish this to continue as it is a significant cost reducer for production budgets.

In practice

Episodes (Hat Trick) the Matt Le Blanc comedy recently shown on BBC2 is a joint production with ShowTime in The US. A second series which has been recently commissioned will be filmed in two versions – a UK version which will carry no placement and a US/ export version which is available for placement and on the sales record of Series One is likely to be seen in 100 plus countries worldwide.

Facejacker (Hat Trick) Kayvan Novak the comedian who takes on disguises was used to create a series of clips for Microsoft’s Bing search engine to be used as part of a viral campaign.

Big Brother (Edemol) Recently confirmed as returning to a TV screen near you from Five, Big Brother is an example of a programme with major opportunities for placement from food, through to any number of household items. In addition some programmes (for instance Endemol’s Million Pound Drop) feature an app played by viewers in parallel with the programme. Although there may be limited opportunities for the programme to carry placement, the app is not restricted by broadcast restrictions on placement and therefore has the potential to carry brand communication.

Secret Diary of a Call Girl (Tiger Aspect) Because of the change in regulations Tiger Aspect had hoped to be able to run placement within the series, but the broadcast timing did not make this possible. A detailed concept had been worked through where Belle’s (Billie Piper) lingerie in certain scenes would be from a specific brand. The brand would have marketing and promotional rights to the program in outside promotions and the target was to have the placement
appear in the episodes around Valentines Day to maximise impact. The programme
has a strong 16-34 profile for both men and women. Again it was intended to shoot two versions with different brands to allow the placement to be sold with brands relevant to the major markets within which the programme plays.

Wipeout (Endemol) This format, although produced by Endemol for the BBC in the UK, is a major hit around the world with editions being produced for markets worldwide across 3 sets in Argentina working around the clock. In India brands are shown on the objects which contestants are bouncing and falling off. This has very quickly proved a very popular opportunity for brands.

US Model: integrated and part of a storyline

According to Nielsen IAG research, US Screenings of 24 recorded one of the highest consumer recall rates for product placements for primetime. It’s information like this that advertisers such as Hyundai would have looked at before committing to product integration in the show.

Placement was rife through all series, the entire first episode of the second series 24 was sponsored by car giant Ford and shown without advertising breaks. The deal, similar to ones struck in the early days of TV when one company sponsored an entire programme, saw the drama’s star Keifer Sutherland driving a Ford Expedition in the first episode.

“24 records one of the highest consumer recall rates for product placements in primetime”

Technology

The requirement for physical product and uncertainty over whether the exposure will make the final cut can both be rendered irrelevant through technological solutions. Not only can on screen presence be added after filming is complete, its presence can be tracked and verified at all times.

• Insertion of brands post-production. Mirriad, a UK based technology business, have developed processes which allow brands to be placed into programmes post -production. Their system takes an image of the brand and can place a realistic representation image of the product either in the foreground or background of the programme. This can be done either within existing programmes or within prepared slots that are left in programmes during production.
This gives not only the opportunity to add brands, but also the ability to update the brand image to the latest model and/or to the correct packaging or brand name for the broadcast country.

• In order to facilitate this process Mirriad have developed a set of tools which allow the whole process of placement to run efficiently:-

o A process which scans programmes and can locate specific points where brand images could be featured. They can then create this as a catalogue which can be published by the broadcaster. This can be linked to common scenes or a particular character in a drama so that the appearance of the brand logically fits the action of a desired connection.
o If a brand likes the particular opportunity in a scene then a demo of how the outcome will look can be created.
o The system allows access from the production company, broadcaster or agency to view the scene pre-broadcast, allowing all parties a clear sign-off procedure.
o The system creates a log of all placements which run along with a formula-based value of the placement.

UK Opportunities

Amongst other applications talked about was the placement of posters into the background of soaps. Using post production, the poster for this week’s film release can be placed in the programme. In general there are quite a range of potential opportunities beyond the simple on screen presence of the product including:-

• Jointly run promotion between brands and programmes
• Client website gains rich media from material in programme
• Direct promotion – i.e. on digital (red button) ‘book a test drive of the car you have just seen‘
• Direct sales – buy the hero’s shirt
• Link to in store – brands can plan promotions to link with programme (e.g. cookery shows)
• Twin screening – using social media applications to run competitions and promotions on mobile and digital formats.

Challenges

Contracting of key actors. If the placement involves a major actor, where is the crossover between what his contract with the production company requires him or her to do and what might be required for placement? The general feelings from production companies were:-

• If the placement was part of the script, then all contractual issues are covered in the agreement between the production company and the actor.
• If the advertiser wants to use the actor’s image or presence in parallel promotions or other activity, there would need to be an additional contract.
• Advertisers need to be aware that some actors will already have contracts with brands for advertising and promotions, and will not be able to do anything which conflicts with these agreements.
• The lead-time for a fully integrated placement is likely to be a minimum of 9 months and probably longer. Technology means that it may be possible to place a brand in the programme after filming if allowance has already been made for where it will appear (see next section).

Issues for advertisers

From the discussion, it is clear that this is a very new world for advertisers. Some of the immediate issues which came up included:-

Where to go for deals?

Broadcasters clearly have a role to play. Programmes can be developed or concepts influenced to make them valuable to advertisers. However there is a need for advertisers and/or their representatives to be able to talk to production companies directly. There currently does not seem to be any clearing house or information point where this could happen.

Who does the business for advertisers?

Several of advertisers’ advisors may well see and want to act on placement opportunities. Each will have only some of the skills required to make this successful. Issues picked up included:-

• Media agencies will have the knowledge of communications value and demographics but not the wider marketing knowledge required to maximise the off-screen opportunities.

• Creative agencies are closer to the communication objective but do not have the resource (e.g. to dress a set in combination with the production company).

• Existing prop placement companies do not necessarily have the communications expertise, though equally there is less skill involved in placing as buying power is not required.

One major advertiser indicated that they had decided that, following a pitch of prop placement agencies, all placement business will go through their prop placement agency. Therefore their newly appointed agency would be the clearing house for all proposals.

Value

It is clear that ITV and probably other broadcasters are looking to add resource to be able to at least price the value of on-screen presence for brands. It’s likely to be formulaic with very large elements of judgement within the formulae.

Break vs. programme audience. Zapping out of breaks continues to increase with even popular programmes such as X Factor seeing 20% lower ratings in the break vs. the programme itself. In some cases break ratings can be only half those of the surrounding programme.

The challenge for advertisers is to sort the ‘wheat from the chaff’. Which opportunities are cost effective against the brand audience and communication objectives? This is both a numeric media question of audience size and visibility on screen. Content will need to be in-line within the emotional framework of what a particular programme/character/scene will communicate about the brand. Finally, there is a need to look at the payback available from using the programme visibility within brand promotions.

Summary

Overall there was a conclusion that the market is likely to divide into two types of placement:

1) Major placement packages where there is a strong association between the brand and the programme with considerable off-screen promotion helping the brand secure additional sales volume for the activity. It is likely that the required detail and commitment required for this will mean that only one or two brands make this connection for any major programme.

2) Technology will mean that many brands both current TV brands and brands not currently on TV will make it onto screen, and that incidental placement will effectively become an extension to conventional advertising. It may even be planned and reported by similar methods to TV airtime buys. The challenge here for advertisers is to have simple measures in place of the value they receive against their communication objectives.

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