How European Media Companies Are Dealing With Product Placement
A clarification has been made in this story. See below for details.
Viewers of "Antligen Hemma" -- Sweden's most popular gardening show -- recently saw presenter Bo Rappne visit a dealer for upmarket lawn-mower brand Husqvarna. Nothing unusual, you might think, but this is something new for European TV viewers: product placement.
Lawn and garden company Husqvarna recently appeared on screen for six minutes in prime time on Sweden's biggest TV channel, TV4, including two product demonstrations, driving a 180% increase in visits to the company's website.
The biggest barrier to brands taking advantage of this new opportunity is that each of the European Union's 27 countries is implementing product placement slightly differently.
The U.K., for example, is stricter than some other markets when it comes to what isn't allowed: no alcohol; food or drinks high in fat, salt or sugar; gambling; or infant formulas are allowed. In the Netherlands, the ban on alcoholic drinks applies only between 6 a.m. and 9 p.m., while France has banned placement of alcohol, firearms and infant formula.
In Germany the rules even change between public service and commercial broadcasters: The former are only allowed to broadcast shows featuring placements provided they have not produced or commissioned the program, while the latter are not restricted in this way.
The EU may claim to be a single market of around 500 million people, but in product-placement terms, Europe's cultural, regulatory and linguistic mosaic means that many shows and most integrations will not have a life beyond their home country.
Many markets are still finding their feet in terms of pricing, project development and advertiser willingness to invest. In Italy, for example, most production companies still aren't up to speed on the new rules.
Despite this, the appeal for advertisers is that product placement can be highly cost effective compared to spot advertising. Deals such as the Husqvarna integration in Sweden cost around $79,000. Using a 30-second ad to deliver the same impact would have cost significantly more.
A complex scale of pricing is already emerging depending on the level of integration and varying by market.
In Spain, costs for passive product placement, where the product is simply shown in shot for about six seconds, range from $5,600 to $8,400. Active product placement, where the actor touches or uses the product for, say, three seconds, pushes up the cost to $11,250 to $14,000. More-sophisticated integrations in both TV and film range from around $28,000 to $280,000.
In France, the leading commercial broadcaster, TF1, is actively promoting product placement. Current proposals include the chance for a holiday brand to appear passively eight times in four episodes of a cooking show, and for a travel brand to effectively set an episode of a popular drama in one of its resorts.
In the U.K., although brands, broadcasters and agencies are talking about deals valued into the millions, the results -- beyond a daytime TV appearance for Nestle's coffee makers -- have yet to appear on screen.
Suffice to say that broadcasters such as ITV and C4 are focusing on their soaps -- "Coronation Street " and "Hollyoaks" respectively -- on the grounds that these attract the biggest audience, and production turnaround at six to eight weeks is relatively short for quality drama.
Similarly it's still too early to write about really sophisticated integration in Germany. Early moves include an M&M's integration into a gameshow that ran just a few days after the lifting of the ban in April 2010. Siemens/Bosch products have appeared in a cooking show and fashion chain C&A has starred in a soap.
Prices being quoted range from around $70,250 up to and above $422,000, with costs based on the premium formats that allow ads to run outside the normal ad break.
Costs increase when the product is more integrated into the storyline, if the broadcaster offers audience guarantees and if the program has a life beyond its first broadcast, in reruns and DVD sales.
Time and experience will clarify how paid-for product placement will work alongside broadcast sponsorship. Will a mobile-phone TV sponsorship of a talent show gain as much traction when a soft drink is placed on the judges' table? And how do the two brands share off-air rights? Must dash; I'm off to visit my local Husqvarna dealer.