Product placement, which launched in the UK on 28 February 2011, has been around for years.
Ray-Ban built its brand on the back of placing them on Tom Cruise - Wayfarers in Risky Business and Aviators in Top Gun three years later; Sex and the City is flooded with examples; The Apprentice star’s transformation from Sir Alan to Lord Sugar was no doubt boosted by it; and we all knew what was behind the ridiculous blurring on American Idol.
Product placement revenues are forecast to rise from the ‘low tens of millions’ in the first year to about £100m ‘eventually’.
This may sound a lot but it’s only 3% of TV advertising and less than 1% of total UK advertising; not really a needle-mover.
There are also many restrictions inhibiting its use. Most of us know by now that it can’t be used in news or children’s programmes, or religious, current affairs and consumer advice programmes made for UK audiences. Baby milk, prescription medicines, gambling, cigarette, alcohol and food and drink brands high in fat, salt or sugar also can’t be used.
There must be editorial justification, undue prominence can’t be given, and the product placement logo must be shown before and after the programme and at either end of any breaks. Oh, and the BBC can’t use it in any license fee funded service.
Product placement can be a very effective marketing tool. It resonates well with three key drivers of brand value: awareness, relevance and understanding.
There are many examples of the effectiveness of both paid and unpaid product placements, from helping to build the Ray-Ban brand in the US market, to Merlot dipping 2% following its derision in Oscar-winning film Sideways and Pinot Noir’s increase of 16% following its exaltation.
I can also see how using it in conjunction with a spot in the adjacent commercial break could have an amplifying effect.
PR amplifies TV product placement still further, which Nescafé leveraged cleverly by being the first paid-for product placement on UK TV with its Dolce Gusto coffee machine on ITV1’s This Morning.
The placement itself, NMG Product Placement found, was seen 110 times over the first 14 days, valued at £125,000 with an ROI of 5:1. The PR value probably exceeds this.
Consumer attitudes towards product placement have also softened, with younger consumers the most receptive.
According to Lightspeed Research, 20% of 18-34-year-olds now say they would be more likely to buy a product if they saw it on TV as part of a programme, compared to 16% in 2010.
Recall, however, is predictably low, with 87% unable to remember seeing any brand on a TV programme in the previous month.
TV is still a major advertising channel with a 28% share, and anything that gives brands greater prominence within this is a welcome addition to helping build brand value.
Yes, paid-for TV product placement is long overdue but let’s not get too excited, it’s just another marketing tool to add to the mix - albeit a new and effective one.
William Grobel, marketing director of Intangible Business
This article was first published on brandrepublic.com