Product placement is coming soon…but not as soon as you think

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Commercial TV revenues will ultimately be bolstered by brands exploring product placement following Ofcom’s announcement to allow paid-for-references on UK TV programmes next year, but take up will be slow.

The UK market looks unlikely to be as lucrative as the initial forecast of £150m reported by product placement company MirriAd – Ofcom estimates the figure is more likely to be closer to £30m.

The revision could suggest brands may be waiting for their competitors to trial product placement before they jump in the deep end.

A Virgin Media spokeswoman told Marketing Week the company is “interested in future opportunities for product placement” but admitted it has a slightly more difficult sell as its business is services, broadband and TV, rather than products.

Ian Barber, director of communications at the Advertising Association, however, says the new legislation will broaden the scope of products viewers will see on programmes.

He says: “People are used to seeing car brands on television for example, but now viewers will see many different and perhaps new types of product – it offers greater flexibility.”

Ed Taylor, a spokesperson for Ofcom, believes it will take time for programme makers to become aware of the opportunities product placement presents but soon viewers could see different formats of shows.

He says: “A venue could now sponsor a programme, so the cast of Hollyoaks could visit Thorpe Park for the day or you could see Topman sponsoring the clothes on X Factor.”

ITV has said it will now start working closely with clients and producers to implement product placement next year but a spokeswoman told Marketing Week she believes it will be a bigger opportunity in 2012 as some productions have longer lead times or have already been filmed.

The ITV spokeswoman says: “People are getting very excited about how much money the product placement market is going to be worth but nobody really knows yet. There is no direct comparison in other territories as even the US does not operate under the same regulations.”

Commercial broadcasters are currently working together on a universal audience awareness TV advert campaign which will run at peak viewing times from January 2011 onwards.

The campaign will not only raise awareness among viewers but also to marketers as a new opportunity to promote their brands and services.

Faced with the challenge of viewers increasingly switching off during traditional TV adverts and skipping through Video on Demand in order to get to their desired programmes, product placement presents marketers with a new way make viewers pay attention to their brand.

But with advertisers unsure about how overt to make their paid-for-references, with effectiveness difficult to measure and with no direct comparison in other territories, the new medium of advertising presents just as many hurdles to overcome.

It is unlikely that 2011 will be the year we see the cast of Corrie sipping on Coca-Colas at the Rover’s Return, but 2012 seems a much more plausible date for product placement as marketers take their time to get their heads around the new format.

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