'No consensus on product placement' says Ofcom

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Ofcom says responses to its consultation on product placement—regarded by some as a means by which broadcasters can counter the threat of lost advertising revenues from digital video recorders—shows there is no consensus on the issue.

"In general broadcasters favour a controlled introduction of product placement while consumer and viewer groups are opposed to the concept," said Ofcom. "It is also clear that before any even limited and controlled introduction could be contemplated there remains a significant number of issues on which further detailed work would need to be undertaken. Predicted economic benefits also appear to remain modest."

Ofcom launched its consultation last December, days after the European Commission announced proposed new rules lifting the ban on the practice in the era of digital television. Product placement is currently prohibited under the EC's Television Without Frontiers Directive, first adopted in 1989. A draft revision of the directive said the ban could be lifted except for news, current affairs and children's programming.

In December Ofcom said "cautious approach to the introduction of product placement has merit".

Broadcasters are under pressure to develop new advertising revenues as digital video recorders allow viewers to skip ads by fast-forwarding recorded programmes.

"Paid-for product placement is seen by many in the broadcasting industry to be the logical next step in the evolution of commercial television in the UK—just as it has been in the US," said Ofcom's consultation summary, published yesterday.

"It is however an issue that divides opinion sharply—attracting as many opponents as supporters. Those calling for its introduction cite the need to exploit new potential revenue sources as pressures on traditional broadcast advertising revenues mount. Opponents are critical of broadcasters' likely ability to maintain editorial integrity when faced with the demands for prominence by advertisers."

Respondents to the consultation made these points:

  • Viewers should be made aware of products placed in a programme, with a variety of mechanisms suggested to ensure transparency
  • Product placement should be excluded from news and current affairs programmes
  • Any products prohibited from advertising on television—for example, tobacco—should not be allowed to be placed
  • There would be a need to provide clear guidance to artists and writers on their right to refuse to endorse certain products.

Lovelace Consulting  |  19.10.2006

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