LONDON: Advertiser-funded content could play a crucial role in the future of the British broadcast industry as ad revenues fall and audiences fragment, and some of the main commercial operators in the country have already begun to experiment with this model.
While advertiser-funded programming (AFP) originated with shows like Procter & Gamble's Guiding Light in the US during the 1930s – which itself was recently cancelled by CBS – direct product placement is currently prohibited the UK.
Last year, however, ITV, the UK's biggest commercially-funded broadcaster, signed an agreement which saw Sage, the software manufacturer, provide the majority of funding behind the relaunch of the Krypton Factor.
Channel Five has also recently announced a tie-up that will see Nintendo, the gaming giant, help finance a new primetime series, Britain's Best Brain, which will go on air later this year.
Other recent examples include Beat: Life on the Street – a case study about which is available here – which was also broadcast on ITV, as well as Channel 4'sVodafone Live Music Awards.
David Brennan, research and strategies manager for Thinkbox, the TV industry's marketing body, argued "total sponsorship is estimated at £200m ($331m; €232m), and AFP is a small subsection of that at the moment, but it will surely grow as brands see the power of association."
One key factor said to be influencing this trend is the growing importance of digital media to both broadcasters and marketers, which can complement more traditional sponsorship executions like "bumpers" run before and after commercial breaks.
For example, a link on the page for the Krypton Factor contained on ITV's website directs users to another online portal run by Sage, which provides mental tests similar to those featured in the series.
Mark Eaves, managing director of Drum PHD, which helped develop the Krypton Factor arrangement between Sage and ITV, argued advertiser-funded material has been "quite marginal" until recently.
"When you get to peak-time terrestrial that's where the commissioning budget has been kept. But everyone is under pressure now so any content with new funding streams is quite welcome," he added.
Similarly, while, "AFP used to begin and end with the programme, now it just begins with the programme," making it more attractive to brands looking to connect with consumers, Eaves continued.
ITV has been long been campaigning for the relaxation of product placement rules in the UK, a move it argues would help fund domestically-made content.
This would also allow it to compete with many US series that are broadcast in Britain, and which feature a large number of brands on such a basis, the company argues.
Data sourced from Media Guardian; additional content by WARC staff