An Inside Look at the UK's New Product Placement Rules

On Monday, February 28, audiences in the United Kingdom will begin to see legal product placement in TV and other programming. The allowance follows relaxed rules on the advertising practice by Ofcom, the UK's independent regulator and competition authority for the communications industries. 

If anyone had any doubt that product placement in the UK was about to get serious, it was erased late last year when the NMA Group announced that it would be entering the market there (via a partnership with Bellwood Media).

The Hollywood based NMA is a heavyweight of brand integration and product placement, representing major brands including Dunkin' Donuts, General Motors and Heineken. Its formal entry to the UK market anticipates what's expected to be a £100 million sector.

After the jump, a deeper look into the new rules and an interview with an agency about how things could shake out as Britain warily embraces product placement.

The Ofcom document outlining new laws governing product placement is 11 pages long and fairly straightforward. Paid-for references of branded products and services will be allowed in films, series made for television, sports programing and "light entertainment programs."

Brands like Heineken and Dunkin' Donuts, which have been on a product placement tear in the US., shouldn't get excited.

The rules prohibit product placement of alcoholic drinks, foods or drinks high in fat, salt or sugar ('HFSS'), gambling, infant formula, "all medicinal products," electronic or smokeless cigarettes, cigarette lighters, cigarette and  papers.

Furthermore, product placement of any kind will be prohibited during news and children's programs.

Controversially, the rules also permit digital insertion of branded products into older programs, while some — most notably the Daily Mail tabloid — say it's a slippery slope.

The newspaper recently wrote about the pending introduction of product placement:

It is rife in the United States, where — ironically — there is growing pressure to curtail what has become a multi-billion-dollar and almost unregulated industry. But in a remarkable U-turn, our outgoing Labour government gave in to pressure from commercial broadcasters and abandoned its stance that it was ‘blurring the boundaries’ between advertising and editorial. In the U.S. there is plenty of evidence that those boundaries are being blurred more and more.

Product placement already occurs in U.K.-financed movies, although in the form of props, not paid or brand-arranged placements. For example, recent popular British films Fish Tank (2009) and Made in Dagenham (2010) both featured identifiable products onscreen — the latter because it features characters employed by Ford.

Ofcom's Rule 9.14, requiring the clear identification and labeling of product placement, is the one that has drawn the most attention. It reads:

"Product placement must be signalled clearly, by means of a universal neutral logo, as follows:

a) at the beginning of the programme in which the placement appears;

b) when the programme recommences after commercial breaks; and

c) at the end of the program."

But wait, there's more:

"Sponsorship Note: The universal neutral logo is defined by the criteria set out in Annex 1 to the guidance accompanying Section Nine of the Code.

Acquired programmes and signalling: When a broadcaster acquires a programme containing product placement (i.e. the broadcaster has not produced or commissioned the programme, and it has not been produced or commissioned by a connected person), there is no signalling requirement. However, please note that such programmes must comply with any other relevant Code rules.

If a broadcaster acquires a programme from a third party on the condition that product placement within the programme will be broadcast (subject to compliance with relevant rules), the requirements of Rule 9.3 (surreptitious advertising) should be noted. In such circumstances, Ofcom expects broadcasters to ensure that audiences are made aware that the programme includes product placement."

Got that? There is a lot more in the full document (PDF), including attention to the use of props verses straight paid product placement.

The British arm of the agency Mediavest plans to get itself into product placement, and a spokesperson told us where it plans begin, and the challenges it faces.

Brandchannel: What brands or category of brands do you expect to take advantage of the new product placement rules?

MediaVest: The obvious categories which will sign up to PP first will be automotive, fashion and FMCG brands – products like cars, clothes, cereals, etc. will always be needed for programmes. To a certain extent, they are already involved in programmes from a prop-placement perspective – producers maximising budgets by sourcing free props with editorial justification and no money changing hands is already perfectly legal in the UK.

Getting the more tricky categories working as product placement may take more time — for example, financial services. For this to work, we need to be able to match programming requirement with brand requirement and relevance.

Brandchannel: On the agency side, what is going to be the greatest challenge to convincing brands to sample with this kind of advertising?

MediaVest: Brands who are used to knowing exactly what they are going to get for their investment will be a challenge to convert to PP. It’s such early days. We are still, as an industry, unclear on pricing and how the placement will be sold and tracked. Ultimately, in these difficult financial times, brands want to know what they are getting back in terms of ROI, and with PP you can’t guarantee what exposure you are going to get, in what context, nevermind then being able to quantify afterwards what effect that exposure had on sales for instance.

Product placement may well work best in tandem with normal TV advertising (and indeed it does in the states, according to Neilsen IAG research), so how brands will split out the additional incremental benefits of PP will a work in progress. We can draw on what America has learned, which suggests that TV standard advertising sees an uplift of 22% on brand recall when supported with PP. Vice versa, PP works best with standard TV support, seeing an uplift in recall by 23% (all figures from research by Nielsen IAG).

Brandchannel: The Daily Mail wrote "the problem with product placement, or ‘stealth advertising’ as critics have dubbed it, is that you can never be sure what is an advert and what isn’t." Do you expect British audiences will adapt to assume everything on TV is an advertisement?

MediaVest: From a viewer’s point of view, Nielsen IAG has been tracking programming throughout 2010 and has surveyed UK audiences who have been exposed to US shows involving product placement, and only 2 percent had a lesser opinion of the show as a result of PP. As long as producers do their job in protecting the editorial integrity of their shows, and the industry ensures placements are justified and relevant, then viewers should not turn off. The last thing broadcasters want is falling audience figures. And a world where viewers are cynically presuming everything is an advert, would be a failure for UK broadcasting.

At top: Trailer for the original, Mini Cooper-promoting British version of The Italian Job.