The Product Placement Soap to Premiere on UK TV on 28 February 2011

Product placement is where an advertiser pays a programme producer or a broadcaster to have their product, service or logo appear within a television programme. It has been a legal and remunerative form of advertising in the US for years. Maybe because of this, its introduction into European television (particularly in the UK) has been a tortuous process. Since product placement was given the go ahead, at European level in 2007 when it was included in the Audiovisual Media Services Directive, there have been four separate consultations by the UK government and Ofcom. Initially banned, then unbanned, product placement can legally appear on UK television screens from 28 February 2011.

What is product placement?

As noted, it is where the advertiser pays to have its brand or product appear in the programme. It is distinguished from prop placement (which has been previously allowed), where no payment or valuable consideration changes hands and the prop has no tangible value to the producer or broadcaster after it has appeared in the programme. For example, if Ford lend a broadcaster or producer a car to be used in a programme free of charge and it is returned after filming, that is prop placement. If the broadcaster or producer gets to keep the car, that is product placement.

Which programmes can contain product placement?

All films, series, entertainment and sport programmes.

Where can't products be placed?

News and childrens' programmes cannot contain product placement. Where the programme is produced specifically for UK television, the ban extends to religious, current affairs and consumer shows.

What products are banned?

Cigarette and tobacco products and prescription medicines cannot be placed in any programme. Where the programme is produced for UK television, the ban is extended to include:

• alcoholic drinks
• foods or drinks high in fat, salt or sugar
• baby milk
• all medicines
• any product which cannot be advertised on television (such as guns or pornography)

Further Safeguards

To protect viewers from the worst excesses of US-style product placement, the rules also provide that product placement cannot be overly promotional or unduly prominent. So whilst you can see the Ford car on screen, you cannot be told by the actor or presenter how well it handles.

Ofcom is keen to ensure that viewers know when a programme contains product placement. A mandatory P logo (as per image above) must be displayed at the beginning and end of each UK produced programme which contains product placement and after advertising breaks. The logo does not have to be shown in acquired programmes (eg., US series etc.) unless the broadcaster is required to show the product placement. In such circumstances, Ofcom believes this would amount to surreptitious advertising (which is banned) unless the placed products are signalled.

Relaxation of Sponsorship Rules

In a sensible move, Ofcom has also relaxed the sponsorship rules. For the first time broadcasters may show sponsorship credits during the programme. However, such credits will be more restrictive than the traditional bookend credits and can consist only of a brief static neutral visual or oral statement accompanied by the sponsor's name or logo. However, "in programme" sponsor credits will be banned if the sponsor is banned from placing its products within the programme.

What does it all mean?

Initial Ofcom estimates of the value of product placement to broadcasters are around £25-30 million p.a. rising to £100 million p.a. over time. Given some of the unnecessary restrictions that have been placed around product placement, this may be realistic.

But as we move from the traditional broadcast era to an increasing on demand world, product placement together with sponsor credits will be an increasingly important way for advertisers to ensure that their brands and products get seen by television viewers. The fast forward button cannot so easily zap through them as it can with traditional adverts.

Advertiser funded programmes also become a realistic option for the first time. Brand owners can get a "branded" programme on air provided that the undue prominence rules are observed.

However advertisers will be wary that broadcasters and producers do not use the introduction of product placement simply to replace existing prop placement arrangements.

It is obviously good news for those broadcasters (like ITV) who produce a lot of their own programming and where the schedule contains a lot of mass market programmes (eg. X Factor) and dramas. The opportunities for placing products look fertile.

Lawyers Tony Ghee, Adam Rendle