No need to switch channel yet

Changes in the way we watch TV are expected to undermine the power of the traditional ad spot, but while alternatives are developed, the tried-and-trusted methods remain vital. By David Benady

Television advertising is facing a steady decline after 50 years as the main marketing tool for UK brands. Over the next decade, the way brands promote their messages to audiences will change dramatically as television itself is transformed by technology.

With the increasing penetration of personal video recorders, which permit ad-skipping, and the launch of hundreds of television channels causing audiences to fragment, the traditional ad break, which interrupts programmes for commercial messages, is losing its power. TV spot advertising no longer reaches the huge audiences it once did and unless an ad can offer strong entertainment value, viewers will use whatever technology lies at their disposal to screen it out.

Add in the advent of broadband internet television and the switch to digital-only broadcasting, and it is clear that brands will have to seriously re-think their approach to television advertising .

However, some of the small-screen alternatives to traditional commercials such as advertiser-funded content, interactive TV ads and product placement have much to prove in terms of effectiveness and popularity with viewers.

According to sponsorship media agency Drum, UK brands spend a mere &£12m to &£15m a year on producing and airing branded content, which is a minuscule sum compared to the &£3bn-plus spent on television advertising. At the same time, some &£110m is spent on sponsorships and about 6% of television ad budgets go on direct-response television advertising, some &£180m a year.

Many top brands have experimented with using interactive TV to promote products. For instance, interactive television advertising runs on BSkyB, and viewers can click through from an ad to a dedicated section supplying more information about the brand. But the medium is still considered to be slow and “clunky” and some say it can prove expensive and provides uncertain results.

Backing for placement

Meanwhile, product placement is prohibited under European and hence UK law. However, talks on an updated “Television Without Frontiers” European television directive are under way and UK media regulator the Office of Communications (Ofcom) has carried out a consultation to test views on product placement in the UK. Ofcom supports a cautious expansion of product placement, though in Europe the medium is unlikely to ever reach the levels seen in the US.

Additionally brand owners’ enthusiasm for experimenting with new ways of promoting products remains undiminished. In the run up to this year’s World Cup, Unilever’s Sure and sports brand Adidas funded documentaries on UK television. Meanwhile, Audi has its own TV station on the Sky platform, as does Thomas Cook. But brand-operated television stations are heavily regulated by Ofcom and it is hard for the brands to present their products in the best possible light through these media.

This is why brand owners are still in the thrall of paid-for ads. They offer a chance to put over a message under complete control of the brand owner. By contrast, there is much less power to dictate the direction of funded content.

In the face of these limitations, some brand owners have tried out long-form direct response commercials, which can last more than 15 minutes. Generally the domain of slicer dicers and exercise equipment, these “infomercials” give significant opportunities to push messages and they are increasingly being used by mainstream advertisers. Channel 4 created one for Film 4, NTL has used a similar technique to sell broadband and ActionAid recently became the first UK charity to use them to recruit new donors.

Mike Colling, managing director of Mike Colling & Company (MC&C), says they are one of the most underused and under-priced opportunities on television.

He says: “These long commercials work well – anyone who sits through an entire 15-minute commercial will have a good understanding of the brand, and a very high propensity to buy. As this is an immature medium, market airtime rates are very low.”

Blurring boundaries

However, these long-form ads blur into television home-shopping which has a poor reputation. So it seems there are still too few desirable alternatives to the 30-second TV spot and some believe brands must look at adapting the traditional commercial.

Arthur Parshotam, executive creative director at Draft London, says programmes have become so specific and specialised that they enable brands to accurately target their audiences.

He adds: “You can add last- minute information to your commercial or even update the ad while the programmes are running. Try giving it the Pop Idol or Big Brother treatment, where people can influence the outcome of a commercial.” He adds that cut-down versions of ads are useful as constant reminders and there are even three-second “blipverts” that can pop up as a constant reminder.

In reality, Ofcom jangles the keys to the future. For marketing to thrive, it needs to loosen restrictions and allow branded content to convey promotional messages and permit more product placement. Only then will brands be able to fully exploit these media. In the meantime, the 30-second ad spot remains the UK’s primary form of brand promotion.