Broadcast industry regulator Ofcom confirmed this week that product placement – paid-for references for products and services – will be allowed in UK TV programmes for the first time from next February.

[…] Ofcom has today [December 20] published the rules governing product placement, including what can and can’t be shown on TV screens. We have also relaxed the rules on paid-for references to brands and products in radio programmes. Both sets of rules will enable commercial broadcasters to access new sources of revenue, whilst providing protection for audiences.

The rules include:

• restrictions on the types of products that can be placed;
• restrictions on the types of programmes in which products can be placed; and
• limits on the way in which products can be seen and referred to in programmes.

Ofcom makes it clear that product placement will be tightly controlled in the UK, so much so that TV programmes will have to prominently identify a programme segment which includes any paid-for references to products or services, perhaps in the way suggested in the image above that includes a prominent letter ‘P.’

Advertising Age has a good commentary on the new advertising landscape from next year, and explains how the ‘P’ idea might work:

[…] Broadcasters will be required to show an on-screen logo – most likely a “P,” but that’s yet to be finalized – to alert viewers to the fact that product placement is present in the show they’re watching. It will be shown for a minimum of three seconds at the start and end of programs, and at the end of each ad break.

Further restrictions include a ban on “undue prominence” given to any particular product, while any direct references to products must be “editorially justified.” These rules are designed to prevent programs from being distorted or created so that they become little more than vehicles for product placement.

AdAge also offers an insight into what the possibilities might be for monetizing old content:

With the use of technology, it will also be possible to place products into old shows, opening up further opportunities for broadcasters.

MirriAd, an “embedded advertising” company, expects U.K. product placement to be worth at least 5% of the TV advertising market, as it in the U.S., giving it an annual value of $232 million. Media analysts Screen Digest, however, estimate the value of product placement to be closer to $150 million in the U.K.

The new rules kick in on February 28, 2011. Note that product placement applies to commercial broadcasting, ie, it won’t be permitted on domestic BBC TV or radio which continues to be ad-free.

Related post:

• Product placement insight from Mercedes-Benz