UK product placement – NMG predictions 2013/14
In February 2011 Ofcom permitted limited liberalisation of UK paid for product placement. This was perhaps the biggest shakeup in the product placement market since 1984 when NMG introduced formalised free prop provision to an unstructured marketplace. So a little over two years since Ofcom’s changes, where can we see market trends going? NMG offers its predictions…
Prop Provision
Arguably, the major investment by ITV and Sky with ‘roadshows’ coupled with high powered presentations to launch paid for product placement, has educated marketers on the benefits of products in content faster – and more thoroughly – than independent placement agencies with limited resources and access could ever have managed.
At NMG we are seeing an increase in enquiries and new business from clients enthused by the benefits of product placement who had previously not considered this communications tool. However, they are looking at prop provision for its lower costs, wider exposure spread, managed risk and access to other TV channels as well as major movies.
NMG prediction:
The prop provision market will grow as clients assess the benefits of free prop provision versus paid for.
The universe of placements will increase, fuelled by reducing production budgets, greater awareness and the increasing demand for quality content.
Agency Shakedown
There are about 12 independent product placement agencies that not only face the strictures of the six-year old recession, but also the additional demands that an increasingly educated market brings.
Smaller agencies will find it difficult, if not impossible, to deliver the service levels demanded by well-informed clients and also by productions who often now expect products to be delivered same day.
NMG’s Chairman and Founder is a Fellow of the Institute of Chartered Accountants who ensures that we have a rock solid financial base and are fully resourced. NMG has made a profit in each and every one of its 29 years.
NMG prediction:
NMG understands that one established agency has already closed its doors and we predict there will be more agency shakedown – maybe another two or three agencies will close or ‘merge’.
Ofcom Guidelines
These guidelines seek to avoid undue prominence, protect editorial integrity and brands and broadcasters using product placement as a ‘backdoor’ route to gaining additional advertising secondage on screen.
So far, in the two-year period building experience and case studies, it has been vital for Commercial TV. However, NMG can foresee Ofcom being faced with viewer complaints that it will have to investigate. These can come from pressure groups but it is not impossible that competitive brands might instigate a complaint.
NMG prediction:
Ofcom will be required to formally assess brand exposure against the guidelines. Given that fines for contravention can be large, ITV’s This Morning programme was fined £500,000 in 1994 for breaching similar guidelines – this will temper the paid for market.
Market Growth
NMG believes that whilst both prop provision and paid for product placement will grow, the real incremental market growth will come from movies. An increasing number of big movies are being shot in the UK. For example, NMG recently changed offices at Pinewood Studios to make room for Disney’s multi-million dollar move to Pinewood.
Latest global figures from PQ Media showed a 11.7% increase in 2012 in product placement spend, with films like Great Gatsby 3D leading the charge.
Movies offer global audiences, low or no upfront fees, editorial influence, regulation free and lead times to plan fully integrated PR and promotions.
NMG prediction:
UK marketers – educated in part by UK commercial TV – whose brief falls outside of UK soaps, will increasingly consider UK and US movies as a dynamic solution.