UK communications regulator Ofcom has delivered guidelines for product placement to advertise within programs, ruling that viewers must be alerted by a black-and-white “P” displayed for three seconds at the start and end, as well as after commercial breaks. Ofcom has also decreed that ads for alcohol, medicines, cigarettes, gambling services, baby milk, weapons and salty or fatty foods cannot be placed.
Europe has been divided over product placement, with some countries, including Germany, reluctant to embrace it — unlike in the United States, where it accounts for about 5 percent of the total TV advertising market, or about $2 billion a year on the basis of various estimates. Some analysts predict that UK product placement within programs could quickly attain a similar 5 percent of the TV advertising market there, or up to £150 million (about €178 million) a year. However, product-placement spending may be at the expense of traditional spot advertising.
Ofcom has largely followed guidelines specified by the European Union in its Audiovisual Media Services Directive, following the EU stipulation that product placement should not be allowed within children’s programs, documentaries or news. However, the directive reflected divergent views within the European Union in some respects, for example, allowing individual member states to decide which products should not be allowed.
Product placement involves showing or mentioning a product or brand during a program, usually in return for payment to the broadcaster or content producer. If the product is highly valuable, however, it may be ruled to have been placed even if no money changes hands. Most European countries are relaxing rules on product placement under pressure from commercial broadcasters suffering from long-term decline in traditional advertising. Product placement is seen as a way of rejuvenating advertising by encouraging brand involvement in content and ultimately perhaps in funding production.
France has been the leading the European march toward product placement and will remain the largest market at least until 2014, when it will be worth about €207 million there, according to research firm PQ Media.