For most viewers, the “blink and you’ll miss it” changes, introduced this week, to the bumper breaks surrounding their favourite programmes will be of little significance.
But for the marketing industry they are a sign of revolutionary changes in the media landscape.
For the first time, the relaxation of the Independent Television Commission rules will allow sponsors to show their products and contact details in the sponsorship bumpers. Some believe it is the first step in a process that will see sponsorship competing with TV ads as the most effective way to target consumers.
The new code, coupled with the arrival of the latest TV technology – such as TiVo, which puts programming control in the hands of the viewer, rather than the broadcaster – is likely to open the floodgates for a host of advertisers who previously shied away from TV sponsorship because of the stringent guidelines.
“It is going to make a big difference to a lot of brands that previously felt that if they can’t show the product, it’s a weaker medium,” says Martin Lowde, director of sponsorship and marketing at Granada Enterprises.
The TiVo video device, which launches in the UK this month, currently enables viewers to fast-forward through ads, but many advertisers fear the technology may go further and that ad- blocking will eventually become possible (MW October 5).
Replay TV, one of the leading players in the US market, already offers its viewers a “true commercial break” at the press of a button and research has shown that 88 per cent of people who have the system skip the ads.
It is a prospect that will seriously worry marketing directors and will force them to look at ways to reach their target audience other than relying on spot advertising.
Mike Moran, commercial director of Toyota – which signed an &£18m five-year deal three years ago to sponsor all New Year programmes on ITV – does not forecast an immediate rush of sponsors changing their bumper breaks to incorporate the new regulations.
“Initially, advertisers won’t think too much about it but, as we move closer to a TiVo box environment, sponsorship could become increasingly valuable as a way to ensure that you continue to have a dialogue with TV viewers,” he says.
The relaxed rules were brought in partly to reduce the number of inquiries broadcasters were making to the ITC about what was permissible in sponsorships. But one area of the new code is controversial.
The simplified code will bring sponsorship credits closer to spot advertising by allowing sponsors to display their products and website address or phone number – as long as they do not form part of an explicit encouragement to purchase or contact the sponsor and the link between the sponsor and the programme is made clear.
This is where things get complicated because the ITC leaves it up to the broadcaster to decide what the link is.
A spokeswoman for the ITC says: “It is up to the broadcaster to establish that link, but it has to be clear to the viewer that the credit is different from spot advertising and that it is connected to the programme. For example, Cadbury sponsors Coronation Street and the credits show a whole street made of chocolate with chocolate characters. Or Nescafé, which sponsors Friends, and shows a group of friends sitting on a sofa drinking coffee. That replicates the content of the show.
“The two key principles are ensuring editorial integrity and showing that there is a distinction between sponsorship credits and advertising. If you do not link the programme and the sponsorship credit, the viewer will be confused and think it is just another piece of advertising.”
MediaVest head of planning Simon Redican believes the rule is intended to stop “gratuitous sponsorship”, where an “unscrupulous” advertiser invests in sponsorship, rather than spot advertising, simply because it is a cheaper way to buy airtime for a product.
“It is oblique, rather than explicit, but I think the ITC has deliberately left it that way to leave it open to be contested, so that if the link between the programme and the sponsor is not clear, the issue can be debated,” says Redican.
M&C Saatchi Sponsorship chief executive Matthew Patten believes that over the next few years, sponsorship credits will start to resemble spot advertising to such an extent that the two will eventually become indistinguishable.
“The implications that the changing media landscape and the arrival of new technology will have for traditional advertising are really very serious. Five years ago, sponsorship was seen as a way of buying cheaper airtime, but now it is starting to come of age, which is largely due to Channel 4 and high-profile sponsors such as Volkswagen.
“The new regulations don’t go far enough to even approach what you can do in a 30-second ad. Until this changes, advertising will still dominate but I think that in the next three to five years, we will see a situation where broadcast sponsorship is much more like advertising and takes up a much greater share of advertising spend,” says Patten.
New takers for sponsorship
Blair Kremble, managing director of SponsorVision – which has handled high-profile deals such as Cadbury’s sponsorship of Coronation Street – agrees that the relaxation of the rules is likely to make sponsorship more attractive, both to existing sponsors and to newcomers who have not previously considered it an effective medium.
“In terms of volume, it will never surpass advertising because there is a finite number of suitable programmes for sponsorship. But in terms of its appeal to advertisers, I think it is distinctly possible that sponsorship will even be more expensive than advertising at some point in the future.”
In the past, many sponsorships have failed to capitalise on their presence because they lack the creative dynamic of TV commercials and appear to be tacked on to a programme, rather than being an integral part of it.
But used correctly, TV sponsorship can be very effective. Because the credits open and close a programme, viewers are more likely to sit through them and make judgements about their quality and the messages they carry.
“In a commercial break, viewers are very aware that they are being sold to, whereas when you are sponsoring a programme, you are not directly selling to viewers in the same way,” says Kremble. “With sponsorship, the company or brand is aligning itself with the viewer and saying: ‘We are getting behind the programme you like and taking part in bringing it to you.’ It is a very different procedure.”
Patten adds that to be effective, sponsorship should never stand alone, but needs to spill over into other areas of the marketing of a brand, such as in-store and on-pack promotions.
The relaxation of the rules is also likely to make sponsorship more attractive to ad agencies, which used to consider it too limited in terms of creative input.
James Murphy, managing partner at Rainey Kelley Campbell Roalfe/Y&R, says: “Sponsorship credits have been hamstrung for some time in terms of creativity. Hopefully, the changes will allow people to use a much more diverse range of approaches.”
David Prosser, director of sponsorship at Carlton Television, says: “Creatives have to take it on the chin – it’s up to them to decide how they show the product in relation to the programme.”
Martin Hart, ITC’s head of sponsorship, says that while the new rules will provide more creative freedom, bumper breaks will still have to reflect the link between the sponsor and the programme.
“While I think it is a little bit premature to talk about the end of advertising, sponsorship has always had the advantage of being able to build loyalty with viewers who watch a particular programme and who associate it with that brand.
“Most people recognise that when sponsorship works well, it is through a subtle association between the programme – not about blatantly selling the product, which is what advertising is about.”
Sponsorship currently accounts for about two per cent of advertising revenue and experts say it is unlikely ever to account for more than ten per cent because there is a finite number of suitable programmes.
To target audiences more effectively, sponsors are likely to take a more strategic approach by linking their brand to a strand of programmes. BT has already taken the initiative by announcing last month that it is to sponsor three of ITV’s early evening shows in a &£3m deal.
And while the ITC code still prohibits sponsorship of news and current affairs programmes to “protect editorial integrity”, Hart says it is possible the ban will be lifted when the European directive on sponsorship is reviewed next year.
It is a move Patten would welcome: “I find the ITC’s argument that sponsors would undermine editorial integrity insulting. It is not only creating a nanny state but also underestimates the intelligence of viewers, the broadcaster and the sponsor,” he says.
Product placement bonanza?
So are we heading for a world like the film The Truman Show, where clever product placement allows our favourite soap characters or chat show hosts to subtly influence our choice of car, sunglasses or even toothpaste?
Kremble thinks not. “Obviously, advertisers would love it if they could buy space for their products on programmes, but I can’t see the ITC going that far. If it ever did happen, it wouldn’t be for a long time – but I can’t really see it.”
Patten disagrees: “I think product placement is just the next step down the line. It will be a natural progression – maybe not now, but that is definitely the way things are going.”