V I D E O • A G E MA R C H/ AP R I L 2 0 1 2 28 BY BOB JENKINS In December 2009, the European Commission (EC), through the “Television Without Frontiers” AVMS (Audiovisual Media Services) Directive, introduced paid-for product placement into mainstream European television for the first time — but you could be forgiven for not having noticed. Product placement has always divided Europe. In some countries, such as Italy, the Netherlands, Romania and Poland, the practice has long been legal and the business of product placement is now a mature one. Whereas, in markets such as the U.K., where the EC directive was not formally introduced until February 28, 2011, and in France, there has always been strong opposition to the idea. Although, as Nancy Lan, Strategic Partnership director at newcast, a company within the ZenithOptimedia Group that specializes in product placement, pointed out, “prior to the EC ruling at the end of 2009 product placement existed in Europe in two forms, ‘prop placement,’ whereby a supplier offered goods to producers, free of charge, to be used as props, thus skirting around the ban on payment, and also in series imported from countries where the practice was legal, especially America.” In Lan’s estimation, “the EC directive on product placement hasn’t made a great impact on any European market, because many of the countries conservative on this issue are navigating the new rules with caution, and in markets where product placement has been common for some time, the ruling hasn’t caused much change.” This is a view shared by Tim Breadin, director of TV Operations, Zodiak UK, Belgium and Netherlands, who believes there are a number of reasons why product placement has been slow to take off in the U.K. “The relationships in a product placement deal, as with other advertiser-funded content propositions, are complicated. Unsurprisingly, U.K. broadcasters guard their relationship with advertisers quite closely, and are not naturally inclined to share them with the wider production community.” As an illustration of this truth, Breadin pointed to the fact that, “in the past year ITV has trialed product placement on two of its in-house productions, This Morning andCoronation Street, but has not permitted product placement with any programs commissioned from external suppliers.” One such supplier, Donald Taffner Jr, president of the U.S.-based DLT Entertainment, was clear that, “product placement has had virtually no impact on our business,” adding, “while it is fine in principle, there can be problems if the parties aren’t careful with it.” He stressed that, “DLT Entertainment, as a company, is cautious about the model. Yes we like the money coming in, and we think that, properly handled it does no harm, but advertisers can try to exert excessive control and that has to be resisted.” Echoing the comments made by Breadin, Philippe Alessandri, CEO of French production house Tele Images said, “French broadcasters are reluctant to develop product placement because they fear it will reduce ad revenues, while advertisers, on the other hand, remain shy of it because there is no proper means for measuring the impact.” Breadin also thinks the “valuation” issue is making it difficult for many product placement deals to get off the ground, commenting, “unrealistic expectations fromboth broadcasters and advertisers have made deals difficult to execute.” But he added, “We can expect this to improve as more deals are done, creating a body of precedent.” Another restraining factor on the development of this business model is the requirement that the product concerned not be given “undue prominence.” The problem this causes is that, as newcast’s Lan explained, “By its very nature product placement is a communication device aimed at delivering a deeper engagement with the audience by showing the product in situ and with a degree of prominence that delivers cut through for the brand, but what constitutes undue prominence is open to interpretation. It is not clear whether it is the size of the brand impact, the length of time it is shown on screen, the degree of editorial input, or some combination of all of these.” And, as Taffner pointed out, the problems product placement creates are not confined to the producer. “Although the money generated by a product placement deal is generally considered to be the producers’, naturally everyone wants a piece of the pie, and there is an argument for broadcasters getting some money because if, for example, a show is sponsored by Coke, they are not going to be able to sell spots to Pepsi.” But, he concluded, “the arguments are still in favor of the producer getting the majority of the money, not least because in these days of ever-shrinking budgets this means the broadcaster will get a better show than they were able to afford.” Despite the problems and the arguments, Taffner, for one, was sanguine about the future of product placement, declaring, “There is a future for product placement in Europe, even if it won’t be the magic elixir some thought it might be.” He went on to suggest one possible way in which technology might be able to boost income streams from product placement: “There is a new technology, not dissimilar to blue screen, that allows you to shoot a product — say a soft drinks dispensing machine — generically. This means that if you sell the product placement to, say, Coke, you can limit the deal by time, and at the end of the period either renew or sell to another advertiser.” Zodiak’s Breadin was also optimistic about the future for this business model in Europe. He believes, “as ‘social networking’and‘clicktobuy’capabilities become fully integrated into domestic viewing habits, the commercial benefits of product placement will increase dramatically. The softer benefits of product association and endorsement may be eclipsed by the commerce, ‘click to buy’ as seen on the screen.” He concluded, “If a direct relationship can be established between product placement and sales, then the sector will grow rapidly.” Unloved And Distrusted: A Shaky Reception in Europe P r o d u c t P l a c e m e n t DLT Entertainment’s Donald Taffner Jr Tele Images’ Philippe Alessandri Zodiak UK’s Tim Breadin
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