Product placement is about to become bigger than ever before

JUST THIS month TV3 held a seminar for advertisers — one that may well turn out to be a watershed in the history of broadcasting in this country.

This conference emphasised how brands could showcase their wares using a relatively new concept to Irish broadcasting — product placement — and offered advertisers a tailor-made vehicle for it.

After a slow start in this country — it was prohibited in domestically-produced programmes here until 2011 — it seems that product placement, which is when a company pays a TV channel or a programme-maker to include its products or brands in a programme, is about to hit the ground running.

The vehicle?

A home-grown soap to be launched by TV3 early next year.

The station is already in negotiations about what is being seen by many in the sector as an unprecedented opportunity in Irish broadcasting for advertisers to incorporate their brands into a soap’s storyline from the get-go.

Product placement is about to become bigger than ever before

Product placement is already the norm on many international TV shows. Samsung tablets and phones have been a common sight in the X-Factor, while the blitz of brands on the Netflix drama House of Cards led to the quip by the Los Angeles Times, that the show was ‘more like House of Product Placement’.

Even Mad Men, which features real brands and accounts at the ad agency, uses it.

When asked whether brands mentioned on the show were paid placements, AMC president and general manager Charlie Collier was coy: “We absolutely have product integration on the show, but you shouldn’t know which ones are paid and which ones aren’t.”

It’s certainly a multi-billion dollar business internationally — in 2012, for example, brands spent more than €8 billion on product placement — and it’s predicted that this will double in the next five years.

Product placement is about to become bigger than ever before

Irish viewers are not entirely unfamiliar with the concept on some home-grown programmes — TV3 had the first product placement breakthrough in this country with the branded Kenco mugs on its Midday programme in 2011, while viewers of the TV3 show The Great Irish Bake-off, will be familiar with the Odlum’s branding — and let’s not forget the Spar shop, now a regular feature of RTÉ’s Fair City soap thanks to a €900,000 deal with the state broadcaster.

Yet the march of product placement in locally-produced shows here in Ireland has, overall, been slow.

This may be partly because the technique got the all-clear in the middle of the recession when marketing budgets were at a low ebb.

A highly focused system of product placement will be a feature of the TV3’s new multi-million-euro series, set in a Co Dublin coastal town.

The programme, whose working title is Red Rock, is not due to launch until January, but preparations are already underway to allow a group of carefully-selected brands display their products on the set; think everything from ATM machines to household products.

Red Rock is a whole new ball-game, says TV3 Group Commercial Director Pat Kiely.

This is a series which from the very beginning offers certain brands a brave new world of product placement opportunities.

Product placement is about to become bigger than ever before

“We’re in discussions with advertisers on the opportunities to be part of this.

“We’ll be going for quality over quantity, so we’ll be providing a small number of opportunities for quality products.”

Selected brands will command “quality placement” in the show, says Kiely who adds:

“We’ll be very considered about this. Everything will look real and natural — it’s very exciting.”

But that’s not all.

TV3 is so serious about the potential of product placement as a revenue-spinner that it’s established a special unit, TV3 Brand Solutions, to manage how the station incorporates brands into its shows.

Product placement is a unique selling point for the station, Kiely believes — and it will grow along with a predicted increase in the amount of home-grown content being broadcast by the station.

To date, locally-produced programmes at TV3 have increased from 23% to 50% of total content.

In addition, the station’s reliance on spot-advertising, or ad breaks has reduced in the past five years from 90% to 70% as other forms of revenue, including product placement, come to the fore.

Product placement is about to become bigger than ever before

“The future of product placement in Ireland will be about having Irish content,” says Kiely.

However, he believes the new kid on the block will not replace the traditional ad break — it can’t give the viewer information such as price or availability, for example, so a mix of the two is best he says.

In fact while there may be an assumption that product placement is the way to go to reach viewers who are supposedly increasingly skipping the ad breaks, figures show that around 90% of Irish viewers watch them — so the ad break is still a very crucial source of revenue to brands.

Furthermore, product placement is not always relevant to every brand or programme:

“There is a natural fit for product placement on some shows, but not every show would be suitable and not every brand would see product placement as an appropriate platform,” says Kiely.

Product placement is a small but growing trend in Irish broadcasting, acknowledges Jill Robinson, head of TV and Digital Investment at the advertising agency Mindshare, but she says, there are some obstacles which need to be overcome before it really goes mainstream.

“The amount of shows that are available in Ireland is one issue — there aren’t that many, and the product has to be editorially relevant,” she explains.

Given developments at TV3, however, that situation could change radically over the next few years.

Brands and broadcasters are still somewhat cautious about the concept of product placement, believes Robinson — they know the Irish viewer is not used to it and may be sceptical about it.

Product placement has plenty of potential, says Fiona Fagan, broadcast manager with the advertising agency Vizeum, but she too points to issues that must be addressed:

“There’s still debate about how much value it adds to your brand,” she points out, adding that while the value to an advertiser of a double-page-spread in a particular magazine could be calculated on the basis of circulation figures, there is as yet, no industry-accepted way of assessing the worth of exposure in a product placement on a TV show.

“The value of exposure you get from product placement in a show is still debatable, and it’s an ongoing conversation between agencies and suppliers.”

Yes, she acknowledges, it’s hugely popular in the States — but, Fagan points out, big global advertisers not only have multi-million dollar budgets, they know their product placement will be watched by an audience of millions.

That’s not necessarily going to be the situation here — it’s worth remembering she says, that in Ireland, marketers may not have similarly huge budgets — and, funds that are channelled into product placement, may be revenue that has to be diverted from other, traditional channels of advertising, such as billboards. There’s a perceived risk involved.

“They know what billboards do because billboards have been around for ever and have been tried and tested but with product placement it is still very new.

“However that is not to say that product placement is not very effective as a way of advertising.

However it needs to be studied and researched more — its effectiveness on the viewer needs to be assessed further.”

While Vizeum has specialised software to evaluate product placement, there is as yet, no industry-wide accepted benchmark for it — and this is needed, she believes.

It makes sense for clients to use product placement as another route for engaging with viewers, believes Eddie O’Mahony, Chief Trading Officer with Core Media, the company which was involved in the unprecedented Spar product placement deal with RTE.

But for RTÉ’s Group Commercial Director, Willie O’Reilly, the ad-break is still very much where it’s at.

“There is some interest in product placement but it’s not huge — there are a lot of rules and regulations around it and all the programmes that can have it, need to be identified in advance.

“We’ve had it in the Afternoon show with Daithi and Maura, but product placement is a fraction of the advertising revenue in Ireland — spot advertising is more important to us.”

Product placement requires careful consideration and planning if it is to work, Fagan emphasises.

Not only must the product being showcased have an affinity with both programme and viewer, she says, its presentation must satisfy the broadcaster and the client.

“There’d be no point in putting an advertisement for life assurance, for example, into a young person’s programme such as Home & Away — you have to match the brand with the viewer to ensure a natural affinity.

There is a — very justifiable – concern in the industry that inappropriate or blatant product placement could be a major turn-off for viewers.

“Product placement must be very carefully thought out,” warns Fagan, adding that on no account must it appear contrived because it will annoy the viewer.

It’s a concern which has also been voiced by ITV’s commercial director Gary Knight, who told The Guardian recently that if viewers believed product placement to be “false or weird” they would reject it.

Another very new technique, once confined to Hollywood movies, is ‘digital insertion’ which quite literally involves the insertion of ‘virtual’ logos or products onto a show — for example a billboard or poster — into the background of, for example, a drama programme.

Although this is still seen as too technically tricky in the Irish broadcasting sector to become mainstream just yet, it’s something that may become more commonly used in the future.

For the moment however, domestic TV stations are becoming increasingly aware of the opportunities offered by product placement — and, say industry sources, are working closely with agencies to uncover possible partnerships.

The verdict — they just have to be careful about how they use it.


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