From February 28th this year, TV shows will be allowed to cash-in on displaying product logos in their content, following new rules from Ofcom. Roger Llewellyn, CEO at Kognitio, looks at the benefits for TV and the knock-on effect for video-on-demand services.
Ofcom’s recent announcement giving the go-ahead for product placement on British TV is a huge opportunity for marketers, who will have new commercial opportunities for their brands to appear on TV screens – something which is already commonplace in the US. In the past, the UK has done things differently to other countries, with Ofcom preventing paid-for content in TV shows and advertising as the only acceptable outlet.
The Benefits of Product Placement
As viewers of TV and video on demand become savvier in the ways in which to avoid commercials, advertising becomes less reliable. Product placement is, quite naturally, seen as an alternative for companies to ensure that their brands are given an audience. So gone are the days of Judges’ drinks bottles bearing censored logos on American Idol, and soap characters simply buying generic bread and beans. This holds huge potential for marketers, who can use this opportunity to publicise their products in innovative ways. However, they must ensure that product placement isn’t simply treated as an extension of advertising – it has its own rules and should therefore be treated as a separate strategy.
The Rules of Product Placement
When embarking on the use of product placement, businesses first need to understand the boundaries. For example, Ofcom’s logo will need to appear for a minimum of 3 seconds at the start and end of a programme, so that viewers are made aware that product placement is present throughout the show. Also, while product placement can be used in films, TV series, entertainment and sports shows, the use of product placement is prohibited in all children’s and news programmes, as well as current affairs, religious and consumer programmes. Product placement for alcohol or drugs, and unhealthy food products that are high in salt or fat are also prohibited.
Since the rules are very relaxed, the main concern should be ensuring that product placement is memorable and doesn’t alienate customers. For example, Coca Cola might pay to have a lead character in Coronation Street ordering a coke at the Rover’s Return, rather than a huge banner outside the pub advertising the brand. Marketers need to view product placement more as a marketing medium akin to editorial rather than advertorial, as their success will stem from the seemingly independent use of their products in TV shows rather than overt exposure.
Knowledge is Power
Most importantly, businesses choosing to use product placement will need to have a greater insight into customer behaviour. With advertising, in the age of digital transmission it is relatively simple to discover if an advert has been seen and then track to see what effect this has on purchasing patterns. For example TRA, a media and marketing research company in the US, helps organisations to monitor the value of advertising by matching the advertisements received in a given home via TV and DVRs with buying behaviour at the retail checkout counter. This enables businesses to measure the true value of their advertising investment.
With product placement, many other factors come into play: is the placement overt or subtle? Was it at a point in the programme where fewer viewers were likely to see, or to be paying attention? Would product placement work best during moments of high drama or during a lull? Was the product presented in a positive, neutral or even negative light? Does product placement have a long-term impact or does it just increase impulse buying? With analytics, businesses can answer these questions, removing the ‘perhaps’ from product placement.
Whether product placement becomes a success with marketers or not is determined by how it is used, and how businesses adapt product placement based on the analysis of the information they have access to. They can use such analytics to sift through what will be a greatly increased pool of data compared to the days of advertising in order to determine the success, or otherwise, of the strategies they implement, and assess whether it is worth investing in.
While there are always going to be both challenges and rewards involved in product placement, businesses won’t know whether it is a success unless it is thoroughly investigated. Only by maximising all the available resources for analysis, can businesses fully grasp the impact that product placement has on their brands.
By Roger Llewellyn