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Product Placement is a surreptitious marketing tool whereby products are 'placed' in films and TV shows. The audience thinks the product 'just happens to be there'. In fact the TV/film producer saves substantial amounts of money through 'product placement' and the 'prop houses' are paid substantial amounts of money for their successful placement of the product in the public eye.
http://business.guardian.co.uk/story/0,16781,1671139,00.html
Tuesday December 20, 2005
The Guardian
Ofcom, the media watchdog, has paved the way for product placement on British television, giving a cautious welcome to the idea of advertisers paying for their brands to appear in programmes.
The regulator issued a consultation paper yesterday following last week's announcement by the European commission that it would update the directive governing cross-border broadcasting regulations to permit product placement.
Ofcom's move is designed to inform the debate ahead of the predicted rule change at European level and facilitate a seamless transition in Britain when it comes. "In both principle and practice, Ofcom believes that a cautious approach to the introduction of product placement to the funding mix of UK commercial television has merit," says the paper's summary.
The move would sweep away the tightly regulated separation of editorial and advertising content on commercial television. It would leave broadcasters and independent producers free to negotiate deals with companies that produce everything from cars to washing powder.
In an increasingly competitive digital broadcasting landscape, advertisers are looking for new ways to reach consumers. Programme sponsorship has already become an important weapon in their armoury to combat the increased use of television recorders to skip advertising breaks and more fragmented viewing habits as consumers move to the wider choice of digital TV.
The practice is well-established in the United States, where it has grown into a $1.87bn (£1.06bn) industry - or about 1% of the advertising market. Popular US imports, such as The X-Files and Desperate Housewives, regularly include products that companies have paid to feature.
Ofcom thinks the British market could be worth between £25m and £30m within five years. Under the proposed new rules, product placement would be allowed as long as an announcement was made at the start of the programme. It would be banned from children's shows, news bulletins and documentaries. Tobacco and prescription drugs would not be allowed.
Research published by Ofcom yesterday suggested there were few objections from viewers. It said: "Product placement was generally well-received when it enhanced the realism of a programme, is relevant and is not too prominent."
Viewers preferred background product placement to other potential means of future funding, according to the survey. But they objected to "being sold to by stealth", and they supported transparent disclosure of commercial arrangements.
Some of the world's richest companies are paying thousands of pounds a year to have their products 'placed' on television programmes, including [top-rating soap operas such as] East Enders and Coronation Street.
They are able to do it because of a loophole in the broadcasting regulations which allows programme makers to accept valuable props for nothing. Instead of paying to hire normal props, they take the branded products for free.
The deals are organised by so-called product placement agents- middle men who are hired by companies which want their goods to achieve greater exposure on television.
A Sunday Times investigation suggests that the 'branded props for nothing' loophole is blurring what is supposed to be a clear distinction between television programming and advertising.
In addition to soap operas and game shows where prizes are handed out, popular magazine and comedy programmes, including Absolutely Fabulous, have also been targeted.
The business, worth an estimated £20m a year, is allowed under broadcasting rules so long as programme makers are not influenced by their acceptance of the free props whose value can run into tens of thousands of pounds.
Paradoxically however, almost all prop houses (as they are [euphemistically] known on the television side of the industry) or product placement companies - none of whom is subject to broadcasting regulations - offer their clients a guarantee that their products will not be shown in a negative light. Many say they see the scripts of programmes before agreeing to hand over valuable props entrusted to them by their clients.
Sunday Times reporters posing as businessmen approached several product-placement agents or prop houses last week. They were told that their bogus products - a wide range of household goods - could be placed on a variety of primetime BBC and ITV programmes without difficulty.
"We work on all the soaps, we supply products to all of them, " said John Parker, an executive with New Media Group, a product placement company with clients including Cadbury, Heinz and Whitbread.
"We would not guarantee that we could get specific products into all those programmes but we would certainly have a relationship with all of them."
The average cost of a small consumer product such as a can of beer appearing briefly in a prime time television programme such as Coronation Street stands at about £1,000. Fixed annual fees start at about £15,000 depending on the range and type of products being placed.
Claire Davidson, a director of Rogers & Cowan, an agent with international clients, said her firm operated a "points system" under which clients were charged on a sliding scale ranging from one to five. A product which appeared only briefly in the programme would be given a one-point rating. If it was handled positively by a "known star" then it would achieve five points.
The investigation revealed that programmes targeted by product placement firms include:
"Television and film props are normally rented out to production companies at 10% of their capital value," said one industry source last week. "What the agents say is, 'You can have this for nothing but the brand name must be seen and this - a packet of crisps, for example - must be seen sitting next to it."
In many cases, agents will seek and be given guarantees that their clients' products will not appear in a 'negative light'. Yvonne Hulton, a director of Autoprop Services, said: "It is pretty standard practice for car suppliers to be shown the scripts in advance, because they do not want their products shown in a bad light. For example, even if the character in the show has got plenty of money, if they are from the wrong background the car company might not be happy."
Both the BBC and the Independent Television Commission have strict rules forbidding broadcasters taking inducements from companies to feature products or giving them editorial influence.
Michael Fabricant, Tory MP and member of the Commons Select Committee on culture said he wanted an investigation into the trade to clarify that rules were not being blurred by practices such as the pre-screening of scripts. "Product placement does not belong on British television. The ITC should commence an investigation and I will be calling on the BBC board of governors to do the same," he said.
All the prop companies approached last week said they acted within the television industry's guidelines, although several pointed out that it was the programme makers who are regulated, not the agents.
A spokeswoman for Whitbread said product placement was used to a limited extent, although in the case of Men Behaving Badly, when actor Martin Clunes sips from a can of Whitbread product Stella Artois, the product was 'placed' by the producers rather than Whitbread.
Both the BBC and ITC said they were vigilant about abuse of the existing rules.
The Pentagon fights wars on many fronts, but perhaps none stranger than from the 12th floor of an anonymous office block on the outskirts of Hollywood where it battles for supremacy at the box office.
Here is the American military's base for striking deep into the subconscious of the world's cinema audiences. Uniformed officers stride down softly lit corridors hung with battle honours. These are the posters for the armed forces' greatest triumphs. Air Force One, The Sands of Iwo Jima, Deep Impact and The Hunt for Red October.
In an ag where image is as important as tank, the Pentagon takes its Hollywood role with growing seriousness. Yet few people realise how close these two powerful institutions have become. All four wings of the American military - army, air force, navy and marines - now run what are known as "entertainment liaison" operations in the heart of the film industry.
The offices are new and, by any standards, generously appointed. The entrance to the air force suite juxtaposes a huge cut-out of the President's 747 jet from Air Force One with an equally large flag emblazoned with the American eagle.
The air force's man in Hollywood, Lt. Col. Bruce Gillman, makes no apologies for a corner office that would make any studio executive feel comfortable: "When film people come to see me, they need to know that we are taking this seriously."
At one level, Lt. Col. Gillman and his fellow officers can find a tank or an air base for location-scouting producers or double-check the uniform of a four-star general. But at another, they exercise a much more subtle influence on the screen image of the armed forces, both by actively pitching ideas for the use of military equipment and making sure that films and scripts reflect the ideals they believe in.
"Fewer and fewer Americans have any real service experience," says Capt. Matt Morgan, immaculate in his razor-sharp US Marine uniform. "And they don't understand what the Marines are about. So to learn what we actually do, they must get most of their information from movies and TV."
Coverage of real wars has often eerily echoed the celluloid version. The Gulf War was a special effects extravaganza, where laser-guided bombs dropped down chimneys, Stealth fighters prowled overhead and the numbers of Allied casualties could be measured in handfuls. Not since Where Eagles Dare has the enemy casualty rate seemed so disproportionate.
At the same time, governments, particularly American, have played on the concept of bloodless warfare to win mass support for overseas adventures. Images of all-conquering technology have become part of the military propaganda machine. In this sense, the Pentagon and the film industry share the same vision.
America's last great conscript war was Vietnam, fought almost 30 years ago. Britain's was Korea, closer than half a century. For most people - certainly the vast majority of cinema audiences - combat experience is limited to what they have seen on the screen, largely bloodless and almost inevitably victorious. It is a powerful propaganda weapon which reaches foe as well as friend.
Some Pentagon officials are known to have worried that the first NATO attacks in Yugoslavia were not generating enough "visuals" to grab the attention of the channel-hopping American public. Now the problem is that broken bodies and burnt tractors do not fit with the image of Arnold Schwartzenegger bringing the bad guys to heel in True Lives by hovering his Harrier jet outside their office window.
The military has been working with film-makers since the 1926 First World War flying classic Wings. A New Jersey airbase appeared in the 1933 King Kong, sending its biplanes into combat against the giant ape atop the Empire State Building.
These days, audiences want their action a little more sophisticated, as in the 1997 Broken Arrow, in which a rogue USAF pilot, played by John Travolta, steals a nuclear bomb by hijacking an aircraft.
There might have been a time when the air force would have given the cold shoulder to the idea that one of its rotten apples might threaten the peace and security of the free world. But a product placement is a product placement. Lt. Col. Gillman explains the ground rules: "We are not saying that these things can't happen. After all, the military is a microcosm of the American soul. But if one of our men is a villain, then we want them to show how we would correct it."
A box-office hit can do wonders for enlistment. After Top Gun, the 1986 Tom Cruise recruiting poster for the Navy air corps, it seemed that every red-blooded American wanted to be a fighter pilot and every girl on his arm.
Privately, the services admit this is not always as helpful as it might seem. "You can imagine the kind of people we heard from after Rambo," says one office off the record. "Not exactly Special Forces material." Even the US Coastguard, which also maintains a film liaison office in Los Angeles, admits most of its recruits first hear of the service through the TV series Baywatch.
Generally film-makers like to give their product the stamp of authenticity. And the Pentagon likes to show off what it can do. The makers of Asteroid, a 1997 TV movie, wanted to show a space shuttle carrying a nuclear rocket into orbit to destroy the giant rock threatening the Earth.
But for the air force to co-operate would mean condoning the violation of an international treaty which bans the deployment of nuclear weapons in space. Lt. Col. Gillman suggested another way to save the world - the USAF's powerful new laser weapons, which are deployed on Boeing 747s. The producers of Asteroid liked the lasers but didn't the the lumbering jumbo jets were sexy enough. A compromise was reached with F16 fighters, in reality too small to carry the laser weapon. The film was one of the highest rated TV films of the year and everyone went home happy.
As on the battlefield, good intelligence can be the key to victory in Hollywood. The Pentagon is constantly drawing film-makers attention to its latest - and usually hugely expensive - toys. Lt. Col. Gillman recently offered to spice up a rescue sequence in a film he heard was being made by suggesting a new HH-60 helicopter: "So our presence went from zero to 15% of the movie."
The Pentagon has a sliding scale of charges on equipment based on what it costs to operate. Generally the military only charges if directors want its men and machines to be performing to order. A row of tanks parked at an army base comes free, with the permission of the local commander. A fighter jet costs about $5,000 an hour - peanuts for a typical big budget promotion.
Some might find this interdependence sinister. Like any thriving business arrangement, the relationship between Hollywood and the military is based on informal contacts - who you know. If there is a golden rule, it is that the closer the military is involved in the film, the more it can press for script changes - and win. The extent to which this happens is a sensitive issue.The Pentagon does not want accusations of censorship. But it does expect something in return.
"We are not asking people to make our films," insists Lt. Col. Gillman. "Often they are counting on us to show them the correct military scenario. And we do understand drama. All we are asking for is that they are correct and accurate."
In general though, relations between the film industry and the military are the closest they have been in years. Hollywood has moved on from its post Vietnam soul-searching phase to the heroics of last year's Saving Private Ryan and The Thin Red Line. The army helped ensure the films' historical accuracy, in particular the sound of rockets and shellfire on the Normandy beaches. The army's Major Ben Frazer says he has "Gotten a lot more calls post Private Ryan. People are much more positive about doing stuff with the military now."
All four branches of the armed services count their achievements proudly, no matter how small. The marine band playing on a set of the White House in The American President, for example is the real deal. The soldiers marshalling civilians escaping the deadly comet in Deep Impact are real army reservists.
After Saving Private Ryan, more films are coming that will explore the Second World War. The first Gulf War movie has yet to be made, but a TV film that tells of the rescue of an American fighter pilot over Bosnia four years ago will be shown in America later this month. Doubtless Kosovo will follow in time. The technology is hot and the casualties - at least on our side - are so far minimal. And Hollywood can always manage what real generals usually cannot. A happy ending.
Consumer choice is an illusion. In theory, it is the cornerstone of the market economy. In practice we may exercise it only as instructed. When consumers choose not to eat genetically engineered food, they are told by government and manufacturers that they are irrational. Once the fuss has died down, we're informed, we will be made to eat it whether we want to or not. The customer is always right - until she or he chooses not to buy.
But in no respect is choice restrained more effectively than by the absence of information. The regulation of advertising in Britain ensures that we are allowed to hear only what is good about a product or activity, and expressly forbidden to hear what is bad.
This, in case you didn't know, is National Fishing Week. Fishing tackle manufacturers have been using the occasion to persuade Britain's three million anglers that life without the latest roach pole or swimfeeder is scarcely worth living. In the hope of presenting another side of the story, the pressure group People for the Ethical Treatment of Animals commissioned an advert to be broadcast on Sky Sport, in which it relays the shocking intelligence that fish feel pain when they are hooked. Last week the ad was banned, on the basis that it is "political".
Britain's broadcasting authorities have been banning adverts like this for years. In 1994, the Radio Authority blocked a series by Amnesty International, on the basis that AI is a political organisation. In 1995, the Advertising Standards Authority told Friends of the Earth to withdraw a cinema advert warning that mahogany logging destroys rainforests, on the grounds that "expert opinion ... is divided" (experts funded by the industry deny that there's a problem). In 1997, Christian Aid's television advert calling for an end to Third World debt was stopped because the organisation's "objects are ... of a political nature".
Not all adverts placed by pressure groups are banned: earlier this year the NSPCC ran a series on national television campaigning against cruelty to children. This was judged, unlike the advert campaigning against cruelty to fish, to be non-political. Only one thing distinguishes the politics of the two campaigns. No one sells child abusing kits, or organises a National Child Cruelty Week. The NSPCC ad, in other words, offends no legitimate vested interests.@
Broadcast promotions are governed by the Independent Television Commission's code, which insists that "no advertisement may show partiality as respects matters of political or industrial controversy or relating to current public policy." On these grounds one might imagine that television campaigns by British Nuclear Fuels Ltd, Shell or British Airways, all of which present partial accounts of controversial activities, would also be banned. Curiously, however, they continue to be broadcast.
The ITC's prohibition, its guidelines continue, "precludes ... campaigning for the purposes of influencing legislation." What this means in practice is campaigning for the purposes of CHANGING legislation. Advertisements whose aim is to create the impression that all is well with an industry are an essential component of the lobbying process against, for example, a reduction in public funds for nuclear power, or the tougher regulation of oil production. If the influence you seek to exert is to prevent political change, your advert is acceptable. "Political", to judge by the rulings of the regulatory authorities, means offensive to the status quo.
The same approach was used by the Law Lords to invalidate their first ruling against General Pinochet. Lord Hoffman's voluntary work for Amnesty International was judged to have compromised his independence. Forty years of payment to the other law lords, most of whom are commercial lawyers, by companies with vested interests in despotic regimes has left their beneficiaries blissfully neutral.
Politics (from the Greek POLITES - a citizen) is what happens when two or more human beings interact. Every organisation on earth is political, and everything it does involves politics. The use of this term to define what is and is not acceptable grants the authorities regulating advertising an arbitrary and unaccountable power, which they deploy, again and again, to defend the status quo from those who challenge it.
Advertising itself is an intensely political activity. The British Government will resist an impending Swedish attempt to ban TV adverts aimed at children. The Advertising Association has been lobbying to overturn the restrictions on toy adverts on Greek television, and the French ban on advertising alcohol.
There are several good reasons for preventing political parties and their backers from buying advertising space. But if all politics are to be excluded from advertising, then all advertising must be banned.
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