CORRECTED: Advertisers support product placement in UK

11 January 2010

LONDON: Coca-Cola and Sony Ericsson are among the major advertisers that would consider including product placement in their UK marketing strategies if the current regulations in the country are updated.

The possibility of switching from fee-free prop placement to a paid-for model has been the subject of a government consultation in the country.

Advocates suggest this move could help increase customer recognition of branded products, as well as alleviating the steep decline in many broadcasters' advertising revenues caused by the economic downturn and migration of viewers to the internet.

"For TV, you want to use products that are used by normal people: a watch, a phone, a razor," advised Cesare Valli, the head of PR firm Hill & Knowlton's Italian operations.

Cathryn Sleight, marketing director for Coca-Cola in the UK and Ireland, argued "product placement certainly presents marketers with opportunities to reach audiences in different ways, as we've seen in other countries."

"We welcome more flexibility, but our starting point is responsibility. This means ensuring that any product placement we agree to is relevant, adds value and upholds the quality of the programming."

"At this stage we have no firm plans, but we would consider it, as we do with all our marketing activity, if it works for our brands and our consumers."

Aldo Liguori, head of corporate communications at Sony Ericsson, also indicated the firm would "review" placing products on UK TV should such a change be adopted.

According to analysis from Alistair Roberts, head of corporate development at Endemol, a production house responsible for global hits including the reality show Big Brother, TV advertising revenues fell by as much 15% in the UK during 2009.

However, Roberts also believes product placement could generate an extra $223m (€155m, £140m) per year if the current regulations are updated.

Such payments are already allowed for films, music videos and TV in many countries, with product placement thought to be worth around $2.7bn (€1.9bn, £1.7bn) annually in the US alone.

ITV, Britain's largest domestic commercial broadcaster, suffered an 11% decline in its advertising sales for the first nine months of last year.

"No one is pretending [product placement] would be transformative, but it could be an incremental revenue stream that we consider will be important for us," Ruth Settle, director of corporate communications at the company, said.

Data sourced from Bloomberg; additional content by Warc staff