Feature: Product placement - A place for PR?

With product placement now allowed on commercial TV, Kate Magee looks at how the PR industry can muscle in on this lucrative opportunity.

This Morning: Nestle's coffee machine, seen on the window ledge, features on the programme for three months [Pic Rex Features]
This Morning: Nestle's coffee machine, seen on the window ledge, features on the programme for three months [Pic Rex Features]

On 28 February, the appearance of Nestle's coffee machine on ITV's This Morning was the first tangible sign of a major shake-up in commercial TV: Ofcom now allows product placement in programmes made for UK audiences.

The PR industry has a huge opportunity to help shape this new section of the market. Some agencies have already grasped its potential. Ptarmigan Bell Pottinger is launching a product placement service, called Brand Story, in May to operate across the Bell Pottinger Group.

Director Nathan Lane says: 'We have had a great deal of interest from our existing clients and believe this sector is set for explosive growth.'

But anecdotal evidence suggests the industry as a whole is already behind.

It was media agency Mindshare that negotiated the Nestle deal, while advertising agency Mother and media planning agency Trinity Communications struck a deal with Channel 4 and retailer New Look to create the first programme funded by product placement.

Of course, PR professionals are no strangers to placing products in the media for free in exchange for exposure, also known as prop placement. Borkowski founder Mark Borkowski went further, brokering a deal with pantomime producers Qdos Entertainment to put Churchill Insurance's dog mascot in its Christmas shows in 2009, and at Pontins holiday parks during 2010.

Negotiating experience

There is stiff competition for this new section of the market. Media and advertising agencies have the experience of negotiating financial deals for media space, and the 13 prop placement agencies such as Weber Shandwick's Rogers & Cowan have the contacts.

But there are opportunities. Although Channel 4's head of sponsorship placement and funded content David Charlesworth, who set up the New Look deal, believes he will deal directly with media agencies (see box), he also says the creative idea could come from any marketing discipline.

Ben Devlin, a former programme maker for ITV and Channel 4 and founder of BrandsonTV.com, which brokers placement deals for production firms, agrees: 'It's territory that hasn't been claimed yet, but PR people are well positioned because they understand the nature of editorial.'

'PR advantage'

PR's understanding of editorial is a huge advantage when the new rules demand that placements are editorially justifiable.

Being able to build an off-screen strategy around a placement and tie it into a brand's overall comms strategy is also crucial if brands are to maximise their investment.

'A placement will only be successful if it is believable. Brands need to think about what conversations they want to have with viewers and the placement activation needs to captivate audiences,' says Exposure's director of comms Maneeze Chowdhury. And conversation is PR's territory. 'The debate around who owns social media will start with product placement. Product placement needs to be considered by PR agencies as another tool in the armoury,' she says.

Borkowski agrees: 'It's a big opportunity for the PR industry, but also a big dogfight and it is bloody. It's the classic case that PR agencies will have to work harder to persuade clients of their ideas than an advertising or media agency,' he says.

What are the opportunities?

While, initially, most of the big-money placements are being handled by broadcasters, there will be opportunities to work directly with production firms.

Devlin says this is in PR's favour: 'The industry has much better pre-existing relationships with production companies, which don't often talk to media agencies.'

Chowdhury advises PR agencies that do not already talk to programme producers to widen their networks and start building relationships with production teams.

Now that programme makers can provide guarantees - when the product will air, how long it will be on camera - brands will be able to build campaigns around placements.

'Product placement deals may become where the brand pays the sum of X in return for placement and footage. Brands may be given the footage of the placement before the show airs so they can seed it on social networks,' says Chowdhury.

Fertile programmes for placements are likely to include cookery, celebrity-based reality or makeover shows. According to the Nielsen Company, the global measurement firm, the most effective product placements in the US for brand opinion in 2010 included firms featured in Undercover Boss and a retailer featured in Extreme Makeover: Home Edition.

American Idol, The Jay Leno Show, Celebrity Apprentice, The Biggest Loser and Extreme Makeover had the most placements.

Rogers & Cowan account director Kate Kelly offers a word of warning: 'Brands may be submitting revenue, but it does not give them the power to be scriptwriters. They have to work with the production team to highlight credible placements. Consumers want to enjoy the show they are watching.'

Chowdhury says PROs will find it increasingly challenging to get products on programmes for free as producers look to monetise the opportunities. But Kelly argues that prop placement will still be an important part of the TV landscape for brands that are banned from using placements (see box) and for shows on the BBC.

How much is a placement worth?

As Kelly says: 'Every agency has its own way of measuring it, weighing up how prominent it is on screen, whether it's branded, how long that clip is on screen, the time of day it is on and audience figures.'

Generally, the base metric is to relate it to the worth of an equivalent ad space - a 30-second TV spot ad. Analysts currently believe that if a product is not seen in use or referenced verbally, it is worth 30 per cent less than an equivalent ad. But it is worth 200 per cent of the ad if use of the product is integrated into the programme and referenced verbally.

'There is one truth emerging. No-one wants to get into product placement for deals worth less than £25,000,' says Devlin. 'It requires too much paperwork and conversation to do it for less. ITV/C4 are going to market with £100,000 options that are often bound into sponsorship packages.'

But beware: there are separate fees for celebrity endorsement off-screen.


A Guide to Ofcom's Product Placement Rules

Top Tips

Product placement - How I See It:
David Charlesworth, head of sponsorship, placement and funded content, Channel 4



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