Product placement gets mixed reviews in UK

17 February 2010

LONDON: Product placement could ultimately be worth more than £150 million ($235m; €172m) to media owners in the UK, but some advertisers are still doubtful about its overall potential.

The UK government recently lifted a ban on all paid-for placement on TV in the country, having begun a consultation on the matter in November last year.

However, companies in the alcoholic drinks, tobacco and gambling industries, and food and drinks brands containing large amounts of fat, salt or sugar, will still be prohibited from utilising this approach.

Despite this, Nick Price, head of content at MPG, the media network, predicted that spending through this channel will grow by around 30% a year going forward, before levelling out at £160m.

This would equate to approximately 5% of the value of the spot market, but would still provide a much-needed boost to the ailing broadcast industry.

"Media agencies will be central to the deals, but due to the nature of content, producers and broadcasters will have to drive the market, and so they will derive the most financial benefit," said Price.

Rupert Howell, managing director of the brand and commercial arm of ITV, the broadcaster, argued sponsorship revenues rose to £100m in five years after a slow start, a trend that could be replicated by product placement.

"We have been inundated with client requests, although much of this is speculative as advertisers don't necessarily have the budgets," he added.

However, David Walker, marketing operations and media controller at Kellogg's, the maker of Corn Flakes and Rice Krispies, remains cautious.

"From a payment point of view the case for product placement has still to be proven. With the restrictions in place, we don't see a big opportunity in this area," he suggested.

Sarah Power, marketing director for Burger King, the fast-food chain, in the UK and Ireland, was more positive, describing product placement as "an interesting opportunity for marketers."

"Certainly in the short term it could help drive incremental revenue for the TV station, as well as product awareness for the marketers," she added.

Data sourced from Media Week; additional content by Warc staff