Overview: Hollywood Branded’s CEO Stacy Jones is quoted in a study on product placement comparing the US and UK. The firm’s case study on Mad Men and Canadian Club is discussed, however, the report data referencing incorrect pricing quotes.
The Potential Effectiveness Of Product Placement In The UK
June 25, 2011
On February 28th 2011, Ofcom, the UK television regulator relaxed its rules on product placement in the UK. With these changes it has become possible for brands to pay to place their products inside television programs to be displayed and interacted with. As consumers become more aware of traditional advertising and broadcasters look to find new avenues of monetising their programs, embedding advertising into other media avenues is becoming a growing phenomenon.
The product placement industry is well established in the US and relies heavily on trust between the broadcasters, the placement agencies and the brands. This complicated network of relationships depends on each looking to mutually assist the quality of the program with the benefit of increasing profits.
There have been different studies that aim to measure the effectiveness of product placements. These have been challenged by the qualitative and ambiguous nature of placements. By using sophisticated techniques and indistinct perceptions of valuation, research has tried to encapsulate the entirety of the outcomes from product placement in the US.
There are cultural differences between the UK and the US in their propensity to be advertised to. By taking into consideration and understanding these differences, it is possible to apply the studies to the UK audience. This project looks into the potential effectiveness of product placement in the UK and how it should be implemented to ensure it is a success.
This report suggests that there is potential to use product placement in the UK successfully as long as cultural sensitivity is preserved and program quality is maintained. There will be experimentation required to meet the right balance between monetising programming and not alienating viewers. The cultural uniqueness must be accommodated for and further research could be used to explore the deeper effects of product placement in the UK.
1.1 The Purpose of the Project
On February 28th 2011, Ofcom, the UK’s communications regulator, allowed the use of paid for references of products in UK television programs. Therefore the way in which consumers in the UK are advertised to is changing. The consumer exposure to advertising will increase through the medium of product placement as broadcasters look for new ways to profit through television.
This project discusses the implications on the UK audience and marketers with the possibility of product placement in programming. Using the experiences from the US, taking account of cultural differences it is possible to apply other studies and gauge potential success of product placement in the UK.
1.2 Beginnings of Product Placement
Within certain criteria, it is possible to include products inside programming as advertising or as a realism enabling device in the UK whereas before, no branded product could be shown on television programmes governed by Ofcom’s rules for a paid incentive by the brand.
It is argued that product placement has been around since the dawn of film (Newell et al. 2006) but became prevalent in Steven Spielberg’s “ET – The Extra Terrestrial”. It is clear that product placement has become more utilised over the years with an increase in the average product placements (Karrh et al. 2003). The principal has not differed and the delivery has maintained the same, it is only the frequency that has changed.
1.3 The Purpose of Product Placement
Product placement is referred to as “advertainment” (Greenbaum 2003) and is different to conventional or traditional advertising because it is set inside a certain context a viewer has chosen to watch. It is not separate to the entertainment but interacts with the on screen experience.
Balasubramanian (1994) defined the term “benefit-mix” to combine both advertising and publicity. There is a compromise from both the organisation advertising and the media to deliver a product placement. The use of product placement is often seen as advantageous for both companies and entertainment producers, raising awareness and brand image as well as providing realism. Product placement is “the purposeful incorporation of a brand into an entertainment vehicle” (Russel, Belch 2005). The use of product placement occurs from programmer’s monetising on their entertainment, adding realism or not having to avoid the use of products in their story and from advertisers looking for new avenues to expose their products to audiences.
Placement agreements rely on either an exchange of the placement for the use of a product or a placement for financial compensation. This means that a production may use a product or brand to aid realism in the context shown or to enhance the story by using otherwise unobtainable products because of production costs of obtaining it or consent by the brand. This way both the producers of the media and the brand mutually benefit as both gain. The paid for approach places less importance on the creativity of the media producer, a product is used regardless of whether the media could have continued without it or whether it is beneficial to the production in terms of story progression.
The focus on profiting from product placements has slowly increased (Tedesco 2008). With the introduction of recorded TV and the few film advertising breaks, product placement’s integrated advertising gives a unique opportunity to expose products to the audience. Unlike other advertising it cannot be ignored and skipped through but equally cannot be given precedence on screen.
Services such as TiVo, a TV entertainment organiser and recorder and other Personal Video Recorders have enabled consumers to watch TV on demand without having to see them as they are broadcast. This has also given them the ability to fast forward past advertising segments. There is therefore a growing pressure on providers to increase the exposure of advertising in order to profit from them.
One of the only guaranteed ways of exposing products to viewers in a controlled way will be product placement, embedded inside the content the viewer wants to and actively watches. “By intertwining a brand with program content, its vulnerability to being zapped away may be reduced” (Roehm et al. 2004).
The increase in threats to traditional television advertising and the new opportunities posed by product placement has led to more reliance and more focus on embedded brands into entertainment. “The Writers Guild of America, the union representing TV scriptwriters, has complained that members are forced to write advertising copy disguised as storylines” (Leonard 2011). Broadcasters are not only matching products to scenes but also creating scenes to display products, thereby hindering artistic expression. This can affect audience reactions to the broadcast, the integrity of the show and in turn, the products shown. With perhaps an over-reliance on product placement in America it is a “significantly stronger belief today that placement introduces a trade-off between financial and creative considerations” (Karrh et al. 2003). How this saturation and manipulation of storylines affects the advertising potential of placement in the UK is not yet known.
The main benefits to product placement are arguably not its direct impact on sales but more of its intrinsic increase in a product’s brand awareness. It can be seen as a way to infiltrate the lives of consumers with the image of a product. It raises the recognition of a product and this has been known to make consumers more comfortable and affiliated with a product the next time they go to purchase. Lehu and Bresseud (2007) conclude that “The deeper the research delves into its impact and its modalities of usage, the more product and brand placement is revealed as a sophisticated communication technique”.
1.4 External Effects of Product Placement
Celebrity attachment to products lets consumers imagine themselves to be what they aspire to in a celebrity by buying and owning the product. “Consumers connect the world to their own, mapping their aspirations onto the products placed in the film” (DeLorme and Reid 1999).
It also improves firm’s investment worth by seeming a better financial prospect, “increasing the firms residual value” (Wiles, Danielova 2009). The product placement works to increase the exposure of the product, the brand and the company as a whole.
Product placement therefore is a benefit to the brand and the company that makes it. It not only makes a product more memorable, but can make it more desirable and respectable.
Product Placement in the UK
2.1 Current UK Product Placement Influences
The UK has already experienced product placement from American programming being shown in the UK. These programmes do not have to abide by the same rules as domestic UK television. The effect of this has already been seen as Starbucks influences UK consumers through Ally McBeal in the 1990’s (T&T Advertising 2011). This means that not only has the domestic UK market been at a disadvantage to produce its own product placements in programming to those overseas exporting their programmes into the UK, but these placements have been targeted at overseas audiences like the US, even marketing products not available in the UK. This is both unfair to UK entertainment producers and not an effective use of product placement.
2.2 UK Product Placement Case Study
ITV’s “This Morning” programme was the first ever example of UK broadcasters product placement. ITV featured a Dolce Gusto coffee machine in their kitchen space in an advertising deal with Nescafe lasting three months. There is no interaction with the machine and very little exposure to it, but there is an affiliation created with the show. The deal is said to have cost £100,000 (Sweeney 2011) and is an example of how the UK has already taking advantage of the new Ofcom rules. A poll on the Guardian shows that 64% of readers feel it will be a distraction to their enjoyment of television whereas 34% saw it as a necessary way for broadcasters to make money. The camera positioning has changed since the first broadcast and now shows the coffee machine in more “mid-range shots”, whether by request or not isn’t known and whether it affects viewer enjoyment is subjective.
New Media Group recorded the number of appearances and rated their prominence, they state that the three month contract has gained Nescafe up to £500,000 of “tracker media value” using their simulator which estimates return on investment. They mention this is reached by visibility, saliency and prominence based on a five star scale they state that “The cost of these product placement modelling studies is insignificant when compared to the gains” (NMG 2011).
They also mention however, that other brands used in their cookery section on the show featured far more prominence from being used as ingredients. These brands paid no advertising but benefitted from being active props, gaining interaction and verbal mentions.
John Barnard, NMG’s Product Placement Chairman said “I have got to say that when I see the Dolce Gusto machine in its lonely place on the shelf, I think for £100K, don’t you deserve more?” (NMG 2011). This highlights the limitations of product placement and may raise questions of how to increase exposure even at the cost of legitimately placed products. The response from Guardian readers suggests that there may even be a negative association to the inclusion of this product even though other products are frequently mentioned through the natural course of the programme. The result of this may mean that all other products featured on the show lose their credibility as well, despite being included for the benefit of the entertainment.
2.3 Industry Size
Product placement has created its’ own industry respectively, due to it being long established in the US it is a multi-billion dollar industry (Bartlett 2007). From the end of 2011, the UK’s product placement industry is expected to be worth around 5% of all TV advertising or £200 million a year alone (T&T Advertising 2011). The restrictions in the UK however are much stricter than those of overseas and Ofcom value the market at its’ maturity at only £30 million because of that (Ofcom 2010).
Comparing the size and effectiveness of product placement in the US to that of the UK will not be a one to one ratio. “The introduction of product placement to UK TV is unlikely to provide initial success to match that of the US” (T&T Advertising 2011). This is due partly to the differences in the rules as Ofcom’s conservative valuation states but also due to the cultural differences between the two countries. Cultural-sensitivity will need to be taken by the broadcasters for their brands to benefit as well as their own broadcasting trustworthiness in the perception of the viewers.
2.4 Ofcom Restrictions
To maintain the integrity of British broadcasting, strict rules have been imposed to match product placement to the specific culture of the British audience as best as possible.
Ofcom’s rules in the UK are notably strict for the protection of quality programming, “In line with EU and UK legislation, the rules state that product placement must not impair broadcasters’ editorial independence and must always be editorially justified. This means that programmes cannot be created or distorted so that they become vehicles for the purposes of featuring product placement” (Ofcom 2011).
There cannot be any references to how good a product is or any sort of referral. Products must simply be embedded in the picture and not remarked upon in a promotional way. Any programme with product placement in must display a symbol at the beginning, after any advertisement breaks and after the programme unless the programme is not from an Ofcom licensed channel like foreign media.
The reservations of Ofcom balanced with the financial advantages of product placement can be viewed as well placed. It is said to affect consumers “below their level of conscious awareness, so that they are not necessarily able to control their acceptance or rejection of the product placement messages” (Hackley et al. 2008). Hackley continues to question the vastness of the ethical implications of product placement, consumers are now media savvy and regulations are paternalistic. It can be beneficial but it can also be seen as deceptive.
2.5 Product Placement in the Marketing Mix
Agencies sell product placement as a way to find great exposure with little or no associated marketing mix strategy. By integrating a product into a story that reaches the brands demographics and sets the product in a good light. “It doesn’t have to follow any methodology of what the company’s advertising is already about. It can be totally separate, unique” (Russel, Belch 2005). In the UK, it is argued that this will not be as effective as in the US “it should be about engaging the consumer, not just product exposure“(Hall 2007) meaning that product placement should have a part of an overall marketing strategy.
Product placement is of such a sub-conscious nature that it is difficult to target specific aims and it is generally not agreed upon how to achieve them. This may affect the UK market that will want to integrate product placement into their existing campaigns where they are comfortable and can minimise any negative side effects but maximise advertising avenues.
A study by Daugherty and Gangadharbatla comparing the use of product placement to traditional advertising criticises the valuation of brand awareness and instead surveyed 227 individuals on their perception to product placement and advertising. Their results showed that product placement is less effective at raising brand awareness than traditional advertising but “more effective in stimulating interest and generating immediate or short-term product purchase intentions” (Daugherty, Gangadharbatla 2005).
Trust in Product Placement
3.1 The Aims and Credibility of Product Placement
The main concerns around product placement are an over exposure to advertising for the viewer and editorial integrity of the entertainment, the latter being the most conflicting for a content creator. Gary Ruskin states “It’s part of the commercial takeover of every nook and cranny of our lives and culture” (Laswell 2004). In America product placement is often seen to detract from the enjoyment of the broadcast with a focus on profit making rather than entertainment. Potentially even more so with a new UK audience, broadcasters will be faced with an advertising savvy and entertainment sensitive audience. It is important that the product placements aim to enhance realism rather than feature over prominence.
Audiences have been shown to react badly to placements that are over prominent. By being an obvious advert ploy with a subtle basis, the audience reaction is distraction and interruption “a change in meaning principle” (Cowley and Barren 2008). This means that they can feel cheated and irritated by the product. The worsened effect of this is that it affects viewers who enjoy the program more than those with low levels of program liking. This creates a risk for the broadcaster alienating it’s loyal viewership and for the product to come across as an annoyance. Cowley and Barron continue to say “It is only in conditions where explicit memory for the placement is very low that brand attitude after the placement is higher”. If consumers don’t remember the placement, they are more likely to remember the brand and increase their brand attitude.
Careful consideration should be made integrating product placement into the UK where the audience is particularly sensitive to advertising with no prior placement experience. The audience will pick up on placement much more and it may cost the broadcaster. If the story is compromised in their eyes to allow a brand to feature in the programme, they will lose trust with the programme and the broadcaster, “persuading the producers to put your brand into the script 20 times isn’t worth the money. Viewers, it seems, appreciate subtlety.” (Edwards 2006). It will be the broadcasters’ decision as to how much they profit without compromising the trust of their viewers, their integrity and their stories.
This table shows the importance that brands place on product placements. It is clear that they place importance and highlight the advantages of using brands to add familiarity to scenes but accept that it may hinder creativity. They also note that they need to invest in product placement because it will be used more in the future. They agree that product placement is difficult to gauge and their inclusion is based on intuition rather than specific results. This may be due to how agencies act in regard to accounting for their results.
With such a gap between the potential proposed effectiveness of product placement and the actual basis for collecting empirical evidence, it is in the interest of agencies to keep a shroud of mystery over the actual sales results. By selling an ideology and psychological “magic” that few understand, they do not become accountable for actual brand awareness or sales increases.
This questionnaire was taken in 2003 with a distinctive American audience, there is the likelihood that the industry has evolved and this was from a more experimental time. It is difficult to think that a new UK industry would be so open to the idea of testing product placement without supportive quantitative evidence in 2011 after its long time in development.
3.2 The Value of Trust
Placements are often mediated by an agency which goes as an inbetween to the broadcasters and the brands. They will review scripts, find demographics and suggest brands for the broadcasters as well as programmes for the brands. They rely on close relationships and relying on their built up experience, they depend on trust. Trust may be inherited from the US agencies to the UK, but the UK is a new market and agencies will also have to build their own trust with broadcasters.
Advertising agencies have used the trust given to them and the exposure of products in product placement as a justification of the value of product placement. In order to really understand the effectiveness of product placement and to place a value on it, researchers have looked to try and record its effect.
Table 2 shows a study of brand marketers to find the importance companies place on the effects of placements. It is apparent that they place more importance on a viewer being able to see a product in a film rather that the viewer liking the film.
Because of this, there has to be trust between the brand and the broadcaster or agency to do a good job and to fit brands around the storytelling. Many of the product placement agreements are based on relationships between the agencies, brands and broadcasters. “While they don’t have control of their director… they do have control over which brand or product they place in their movie. It’s all about who you know.” (Russel, Belch 2005)
3.3 Benefiting Believability and the Story
In the UK product placement has been used to benefit the entertainment to make it more believable and recognisable by using brands with mutual consent and intent from the producer and the brands themselves. Product placement has only traditionally been used to lower costs to the programmes producers by utilising free props. With the introduction of paid for product placement, the programme producers may need to compromise on what they wanted from the story simply to gain money.
The media must also tailor their story telling to the advantage of the brand. The level to which they do this can affect the story or the realism in both positive and negative ways. “The Writers Guild of America, the union representing TV scriptwriters, has complained that members are forced to write advertising copy disguised as storylines “ (Leonard 2011). Trust is gained through discussion and mutual understanding from both the media and the brands to find a level at which both the story and the placements benefit.
Because the placement must reside within a defined context, with characters and scenes, this reduces the control the brand has over how the product is perceived. Unlike conventional advertising, the impression of the product is dependent on the media and the story. It benefits from this to some degree as it is seen as more credible being shown via the media rather than via the organisation itself (Walton 2010).
Mad Men, a series based on the lives of advertisers in America during the 1960’s is well known for its use of product placements. An example of where they have worked with the brands and the writers is with Canadian Club Whiskey. This product featured in several different locations around a character in the show. The product was tailored to fit into the story and the props department worked with the agency Hollywood Branded to create bottles and boxes appropriate to the time. It showed the whiskey in a good light because of the characters affluence and perceived good taste.
The deal was said to have cost $490,000 for the series and have influenced 36,000 direct sales. (Brands and Films 2011)
Stacy Jones, founder of Hollywood Branded said “We measure the placement values based on the show’s Nielsen ratings, how many times it re-airs, the network’s ad-buy rate for a 30 second spot, the seconds of on screen exposure, whether there were any verbal mentions, and how recognizable the brand was. We do have a database that generates these numbers with a team of media reviewers that value each placement based on their specialized judgment” (Brands and Films 2011).
3.4 Artistic Expression and Broadcasters Profitability
It is the job of the employed agency to match the broadcasters needs with the products. Sometimes it may mean that to compromise on a story or product, neither the brand nor the broadcaster is entirely happy with the placement. It can also be the case that the broadcaster disagrees with a placement as they see it as a distraction from a programme.
A case that highlights this is from Lady Gaga’s “Telephone” music video. The video places heavy prominence on brands such as Virgin Mobile and Coca-Cola. Lady Gaga states in NME (2011) she was making a “Warholian comment on commercialism in America” and that most of the brands were not paid for. In an interview with NME she stated “I can see that it was so overly product-placed, I don’t regret it, I didn’t have the money, but I would never do it again”.
This case highlights the fine line between including a brand for the purpose of entertainment and brands paying to be featured. The artist here is in a position of doing both but not wanting to repeat it. The extent to which the paid for placements undermine the brands used to show her artistic statements can only be measured individually by her fans. It is apparent however that it has had a negative effect on what she was trying to portray.
Measurement Studies and Concepts
4.1 Importance of Measurement
The ambiguous and qualitative nature means product placement’s effectiveness is difficult to measure. So much so, that different implicit and explicit measurements have correlated different results entirely, “The effectiveness of placement depends on how it is measured” (Law, Braun 2000).
Brands will be scrutinising product placements effects in the UK early on, it is important that there is a mechanism to accurately measure the effectiveness and impact of product placement for it to be a success. There have been many studies based in the US gauging the effective of different product placement strategies.
These are used by marketers to understand how to embed advertising effectively and what effect it will have on their marketing blend.
“Advertisers want to know what they are getting for the money. If you don’t have metrics, you can’t measure” (Whitney 2004). Two main different approaches have been used to measure the effectiveness of product placement, monetary effectiveness to consumer recognition. Organisations are competing to find a standard, however, many agencies do not supply or even agree to the practices being measured, often using the video clip of the placement as evidence. This is because it is so difficult to accurately measure the returns made as a direct response to a product placement. Event studies allow an event’s unique contribution to the firm’s future profit performance to be isolated and measured (Hyman and Mathur 2005).
It is possible for a product placement to gain more brand recognition than an advert. Using a product placement and an advert together however decreases the positive brand association or using either separately (Table 3). “Products are seen as a way to create familiarity, and in an indirect way, celebrity endorsements, for their product” (Buss, 1998).
Whether or not product placement has an effect on consumers is widely not in contention, the extent to which they are however has been approached in different ways. Some include quantifiable figures, others report trends of figures and others again report qualitative attitudes and recognition.
As the industry develops and gains more share of the marketing sector and demands bigger budgets, there will need to be a formal way to evaluate “It is critical that a more formalized model be established to allow accountability” (Donaton, 2004). The lack of these things may affect the uptake of companies in the UK to use the new medium. It will be a new experience for them as well as their customers.
4.2 Brand Consumer Memory
The measurement of the consumer memory of a product is often used as the best way to determine the effectiveness of product placement, unsurprisingly, “Research studies investigating product placements reveal effects that are positive for memory” (Cowley, Barron 2008). Product placement results can be seen as subjective and inconclusive (Babin, Carder 1996). This means that other measures have been sought but maybe missing the complex nature of placement by trying to capture it fully.
4.3 Qualitative Measuring Techniques
Figure 1. Assessing Product Placement Efforts Source: Russel, Belch 2005
Fig 1. Shows the more qualitative approach and how it is recorded. Stand-alone placements refer to those independent of an overall strategy, integrated are those that are a specific part of a wider marketing plan. There are many different variables and they are all subjective. The value of each and the potential to build awareness will need to be interpreted by the brand and the consumer individually.
This covers many different aspects that are seemingly subtle, including the value of the length of time on screen and the prominence in visual focus a product is given. It is difficult to accurately interpret these points, how much implication the story of actors give the product for example is subjective and may vary.
4.4 Quantitative Studies on Direct Monetary Returns
In order to measure the full return on investment from a product placement, agencies attempt to quantify and record the screen time, prominence, interaction and positive feelings associated with a paid for product. Some may decide to do this in-house while others prefer to use the Nielson rating system.
The expected monetary return is based on a score through both the increase of brand equity and direct sales which relates to the impression the placement has left on the audience.
The complex associations audiences make with entertainment shows the importance of prominence of the product “by simultaneously considering the effects of product, film, and execution factors, we present a more comprehensive picture of the factors driving placement worth.” (Wiles, Danielova 2009). By correlating reported scores and using experience from other product placements and their successes, a value can be created for a placement.
The task of segregating the sales of a product made through a direct result is difficult and a matter for the experience of the agency and the brand. It is widely considered that product placement increases sales and it is plain to see that it raises brand awareness, however, the extent to which it does this is up to interpretation.
It is therefore possible to try and isolate the effect of product placement on a brand and its subsequent increase in sales to a certain extent. There is however a need to understand that product prominence and integration are important to the effectiveness but it is not an exact science. Lee Gustafson (2006) sums it up, “I tried to explain that calculating exact ROI in this case would be like catching wind in a jar“. The subtle variations and complex mechanisms that allow product placement to work are not entirely predictable. It is not possible to state that a certain amount of screen time, with an amount of actor interaction with a product knowing the audience will result in a defined amount of sales increase. Even if that calculation were possible, the ability to implement them as accurately as needed would be very problematic. Actors and broadcasters set out to tell a story and produce their vision as best they can and not set allocated story integration and product screen time.
For the reason of its ambiguity, despite researchers attempting to empirically justify product placement, it is more of an art form than an exact science. Success will depend on judgement. Further to this, the effects of product placement are not entirely known until after the broadcast is shown. The extent to how positive it is or even how damaging it can be is only known after the audience has seen it.
Cultural Differences Between the US and the UK
5.1 Cultural Differences
One important factor to consider when applying studies carried out in the US is the cultural differences between the two markets.
The US demographic has been exposed to product placement for a long time and sees it as a natural occurrence in their films and television. The UK market however has never before been exposed to it (except in American programmes and film). There is the possibility that in America, the audiences are simply desensitized to product placement, with the ability to simply overlook it with minimal effect. In the UK there is not that familiarity and the effects could be greater. “The U.K. is a more marketing-savvy country than the U.S. In the U.S. the route taken by marketers is often very cheesy and obvious, with products used for no logical reason. This would be rejected in the U.K., and people would be offended” (Daugherty, Gangadharbatla 2005).
5.2 Foote, Cone and Belding Measurement
To analyse the stylistic approach of advertising a FCB model of marketing is used to gauge the involvement and feeling from an advert.
The model in fig. 2 measures advertising and its effectiveness against four strategies: Informative, Affective, Habitual and Satisfaction. “this suggests there are purchase decisions where thinking is most involved and others where feeling dominated; there are situations that require more involvement and those that require less” (Vaugn 1986).
This study from 1989 shows that the UK lower thinking levels associated with advertising supports a more “soft sell” approach.
5.3 Responding to Cultural Differences
The differences in the cultures of the UK and America mean that advertising must be different in order to be equally effective. Due to historic differences and social idioms, the perception of advertising is different in both countries and is reflected in the strategy and concept of advertising in each.
Table 5. Factors Responsible for Differences in US and UK Television Advertising
Table 4 shows the cultural differences between the UK and the US in regards to advertising, these same socio-cultural phenomena can be also to a degree be applied to product placement.
In early television, American agencies were used and so-styled commercials were shown. They were often rejected as being “loud-mouthed salesmen who confused shouting with communicating and bullying with persuading” (Bernstein 1986). The British and European advertising is based mainly on a metaphor of “myth and ritual” (Carey 1975) with an emphasis on humour and visual content. American advertising has much more of a “hard sell approach” (Lannon 1986).
A study by Weinberger and Spotts (1989b) indicated that UK TV advertising includes less objective information than its American equivalent. This may be due to stricter rules employed by Ofcom to regulate advertising “Tighter regulation leads to less objective information content to avoid claim substantiation issues” (Huang and Hou 1987). It may also be that UK audiences do not respond well to a “hard sell” approach. In either case, the UK demographic is culturally more used to less information through advertising.
Instead, it is purported that the UK responds better to humour integrated into their advertising, with over 11% more adverts containing a humorous intent in the UK than the US (Weinberger and Spotts 1989b). There is the idea that British audiences prefer to be entertained than informed (Ogilvy and Mather 1987) and that this presumably affects their intentions to buy products or at least, increase brand awareness.
Table 6 shows the level to which the UK and US advertising is perceived differently. British consumers explain advertising as “more entertaining, more cleverly devised, more original, less patronizing, more imaginative.” (Lannon 1986). Winksi, 1990 found that US consumers even went as far as saying “advertising insults my intelligence”. Even so, the amount of irritation caused by advertising across the two demographics shows that even though UK consumers consider themselves to be entertained and not informed, they are similarly put off by advertising.
Wells et al. (1988) describes UK advertising as drama-based commercials that invite viewer participation by not spelling out every detail. This style of advertising aligns very well into the idea of embedded marketing and product placement. By introducing brands into the existing drama and context of a story, the audience is subjected to a far more “soft sell” tactic. It is already understood that UK audiences prefer less information in advertising, product placement introduces little information and more entertainment at the existing commercial expense of product focus.
5.3 Rules Contrast
It is important to recognise the effect of the changes in the rules between the US and UK placement policies. Having stricter regulations on product placement may mean fewer opportunities to advertise but it may also create a better trust with the programming and improve the product credibility.
This supports the idea that the rules set by Ofcom are there for the protection of the UK public but also as a good judgement on how product placement should be used and that broadcasters should be culturally aware.
With little confidence of how much they should invest in it to get a desired outcome, it will take time for the market to settle and create its’ own value on embedded marketing. The UK demographic is very aware of advertising and so the industry will need to tread carefully in the area and make a few mistakes to understand the unique boundaries and successes.
Broadcasters must be prepared for failure in the beginning as consumers get used to product placement. It may be the fact that brands need to be exposed for better or for worse in order to learn the medium for success in the future. This may be daunting for new advertisers entering this market and the risk associated will mean that although there is huge potential in UK product placement, there may not be a large up taking.
6.2 Cultural Differences
Because product placement relies on broadcaster judgement and cultural perception, it is difficult to gauge the effectiveness in a new market. There are cultural similarities between the UK and the US as well as prior exposure to product placement to British audiences but they do have particular differences in their reactions to advertising that will affect their perceptions of product placement.
In the UK market, consumers are very aware of advertising and like to be entertained rather than sold to. For that reason, product placement must be subtle to be received well. Many see product placement as an opportunity for producers to enable more realism and be unconfined by using brands in their productions. It allows for more editorial freedom rather than less. The only caveat being how much the broadcasters allow placements when they are not necessary and have been added in hindsight to the actual meaning of the story or context they appear in. British consumers will be sensitive to the integrity of the broadcast and of the products. Failing to appreciate this could undermine the integrity and trust of the broadcaster.
Cultural sensitivity will need to be exercised by broadcasters understanding of their demographics and markets to know when too much product placement is used and when there is more potential to monetise.
Broadcasters will need to create new trust relationships with brands and product placement agencies so that they can work together with confidence. Furthermore, the agencies cannot simply transfer their knowledge from the US with an implied trust, it must be culturally appropriate to the UK and it’s unique consumer demographics.
Using the success stories and measurements from the US are a good idea and finding ways to implement product placement into the marketing mix will help integrate it into UK advertising and the domestic way of doing things.
The ethical implications of product placement should be monitored by Ofcom In terms of consumer understanding, enjoyment and insightfulness compared to the potential sub-conscious stealth selling without the consumers knowledge, consent or ability to dismiss, which is essentially what the brands are looking for.
6.4 Further Research
The effects of product placement on different demographics have not been explored in much detail academically. There is no research suggesting the effects on different demographics perceptions of product placement. It may be the case that the older generation in the UK, having not previously experienced product placement, react badly to it, to reject and avoid it and the broadcasts that include it. Conversely, the younger generation may be more advertising savvy and reject it on the basis of it distracting their experience. There should be further research in this area and particularly in the UK.
6.5 Effective Use of Product Placement
The UK market has already been subjected to product placement from overseas productions and so that will ease the transition into a placement funded industry. The dislike of advertising means that British consumer begrudgingly put up with advertising segments. The research proposing that British consumers prefer non-informative and entertaining advertising suggests that product placement would be well received as well as effective. How the audience will react is yet to be fully explored. Ofcom stated in a preliminary report that “product placement was generally well received when it enhances the realism of a programme” (Ofcom 2005), however, what is aiding realism and what is over-prominence in a programme is unknown.
The integrity of the broadcast and the broadcaster may be affected if products paid for appearances out of context because the audience can lose trust in the independence of the programme. The editorial control of the brands advertising has to be limited to maintain trust with, and the integrity of, other brands.
Ofcom’s strict rules should aid in maintaining trust and leave a sense of security to viewers but there is also a responsibility placed on the broadcaster as consumers dislike being stealth advertised to and prefer full disclosure.
Eventually, the resistance to product placement will be worn away as audiences become more accepting as is the case in the US. Ofcom should regulate to avoid this to compromise the quality of programming and this is something Ofcom should scrutinise.
Faced with the often expensive alternatives, it seems that product placement is a valuable way to advertise and is far preferred to options such as pay-per-view or longer advertising segments between programmes. These would create a bigger discouragement to the viewer and would only highlight their anguish at having to pay or be advertised to. With product placement, there is an avenue to gain exposure with little discomfort from the audience.
6.6 The Future of UK Product Placement
With the UK audience’s cultural propensity to accept product placement as a form of advertising and the obvious rewards to brands and broadcasters, there is a huge untapped potential for product placement to be successful.
Further work should be made to encapsulate the direct results of product placement and how it can be integrated into the marketing mix of brands to align it with the UK way of thinking. Agencies should look to build on this research and establish trust with the broadcasters by advancing their own sensitivity and candour.
Broadcasters must also be self-responsible, risk taking and not expect a direct return initially. It is possible that early on, there will be losses until the market has settled down.
The true benefits, detriments and effects on the audiences, brands, broadcasters and program quality are yet to be seen. One thing however is certain, whether implemented through focused academic advice and sensitivity or by hit and miss experimentation, product placement is too enticing to disregard in the UK and will be a large source of advertising revenue in the future.