ReactS : Advertising Lawyers & Attorneys : Reed Smith Law Firm : Marketing Regulations, Product Placement

Today (Monday, 28th February 2011) sees the introduction in the UK of product placement in television programmes. Of course, product placement is not a new phenomenon here in the UK and has existed in feature films, gaming and certain imported television programmes for many years. Nevertheless, today marks something of a watershed for the UK television industry.

Detractors will point to Ofcom's research which suggests that product placement may only be worth £25m a year. They will also flag the various restrictions contained in the new rules which, for example, prohibit alcohol and products that are high in fat, salt and sugar being used for product placement.

Those in favour of product placement believe that it could be worth as much as £100m a year within the next few years and will point to territories such as Australia and the United States where product placement now accounts for 5% of the total television advertising market. They will also note the development of digital technology which allows products to be placed into programming at the post-production stage which also opens up the possibility of different products being placed into different markets.

In our client alert we examine the new rules in detail.
 

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Ofcom has today, 28 June, opened two consultations on changes to the Ofcom Broadcasting Code (one for television and one for radio) to allow for product placement in UK television programming. The consultations close on 17 September 2010, and we encourage interested parties to respond.

In the television consultation, Ofcom has made a few sensible suggestions and clarifications to the Regulations that came into force in March (see our separate Ad Guide), including allowing single dramas to carry product placement, prohibiting thematic placement and signalling the placement to viewers by way of a universal neutral logo (both visual and audio).

Furthermore, Ofcom has suggested amending the sponsorship rules, to allow programme sponsor's products or services to be referred to in the programme. In essence, this would allow broadcasters to offer full packages to sponsors, prevents conflicts between sponsorship and placement and makes much commercial sense for both broadcasters and advertisers. Ofcom also states that, as a result of the changes to EU law under the Audio Visual Services DIrective which the Product Placement Regulations implement, there is no need for advertising and editorial to be separated, but only that they are distinct from each other: some changes are therefore proposed to this section of the Broadcasting Code.

Notable by its absence, however, is any clarification of what it meant by "undue prominence": under the Regulations, programmes must not give undue prominence to placed products. However, Ofcom has said it intends to issue Guidance as well, so we hope that these address this crucial element.

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The ReACTS breakfast seminar, 'Mad Men or Bad Men?', was held on Thursday 20 May. There was an excellent turn out with delegates from diverse companies, including advertising agencies, production companies and broadcasters. The speakers looked in detail at the opportunities and challenges arising from the recent relaxation of the product placement restrictions and explained the recent and forthcoming changes to the advertising codes and the DEFRA Green Claims.

Thank you to all those who came along. If anyone is interested to obtaining the slides, please do not hesitate to contact us.

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For many years, UK audiences, while watching episodes of American Idol, have been treated to images of Simon Cowell and the other judges sitting behind large red cups with pixellation over the Coca Cola logo. This is because, until now, product placement has been prohibited in UK television programming, but all that is set to change - no doubt to the relief of the technicians who had to spend their days pixellating the logos….

Under new Regulations, UK broadcasters and production companies will soon be allowed to commission and make programmes featuring paid for products. There are some restrictions, such as the fact that the advertiser cannot influence editorial control and that no placement can be given “undue prominence”. This is nonetheless a potentially revolutionary change for viewers and, perhaps, a new source of limited income for broadcasters.

Ofcom has yet to publish detailed guidance on how it will judge what is meant by “undue prominence” and how notification of product placement within the programme will be communicated to viewers. However, you can get up to date with the current changes by reading our Ad Guide.

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