Product placement ads, where manufacturers pay to have
their particular product used in particular TV shows and films, are
common in US programmes.
They are generally banned in all European countries, except
Austria, unless an imported show is being aired. Desperate
Housewives and 24 were among the popular US series that pioneered
successful product placement.
According to the European Commission, however, the discrepancy
is leading to legal uncertainty and is putting the European
industry at a disadvantage in comparison with the US market. In
December it therefore set out proposals to relax the rules,
explicitly defining product placement for the first time, and
setting the use of the ads in a clear legal framework.
Shortly after, UK telecommunications regulator Ofcom launched a
consultation on the issue. The consultation period ends today.
According to Ofcom, developments in the television market,
audience fragmentation and video on demand have challenged the
value of traditional spot-advertising. Future funding of
programming is therefore a legitimate concern to commercial
broadcasters, and product placement, cautiously introduced, may be
the solution.
The NCC does not agree.
“We recognise that changes in the broadcast sector and in the
way consumers use digital technology raise uncertainties about the
future funding of television, but product placement is neither an
acceptable, nor practical answer to those challenges. It is a
stealth advertising tactic too far,” said Sue Dibb, author of NCC’s
submission to Ofcom.
“Prominent product placement has scant support from the public
and, on US experience, will boost traditional advertising spend by
less than one percent hardly a viable alternative source of
television funding,” she added.
According to the NCC, evidence from Ofcom’s own research shows
there is little public support to move beyond the existing rules
allowing unpaid-for ‘props’ to add realism to programmes.
The NCC’s submission also points out that product placement
would blur the 50-year old line between advertising and programme
material, reaffirmed last year in Ofcom’s new Broadcasting Code. In
the watchdog’s view, for Ofcom to allow product placement would be
to sacrifice its own broadcasting and consumer protection
principles for no significant benefits for viewers, broadcasters or
advertisers.
