Introduction

On 28 February 2011, the Ofcom Broadcasting Code ("Broadcasting Code")¹, introduced product placement for television programmes in the UK. Whilst product placement is certainly not a new phenomenon in the UK and has been seen in feature films, gaming and imported television programmes for many years, nevertheless the new rules represent something of a watershed for the UK television industry. The new rules, which implement the Audiovisual Media Services (Product Placement) Regulations² (which in turn implemented the Audiovisual Media Services Directive³) are explained below.

What does product placement mean?

"Product placement" is defined in the Broadcasting Code as the inclusion in a programme of, or the reference to, a product, service or trademark, where the inclusion is for a commercial purpose, has been paid for (by way of cash or other valuable consideration), and does not amount to prop placement.

Prop placement, which has been allowed in UK programme making for a number of years, is defined in the Broadcasting Code as the inclusion of a product in a programme where the provision of the product has no "significant value" and where no payment or valuable consideration has been made for the inclusion.

What programmes are permitted to include product placement?

There are four types of programmes in which product placement is permitted:

• films made for cinema;
• series made for television or other audiovisual programme genres; 
• sports programmes; and 
• light entertainment programmes.

No children's programmes are entitled to carry product placement. Children's programmes are those primarily aimed at viewers under 16. News programmes also fall outside these permitted types.

In addition, the Broadcasting Code states that UK-made religious, consumer affairs or current affairs programmes are not permitted to include product placement.

The BBC remains bound by section 76 of its Royal Agreement⁴, and is therefore prohibited from making or commissioning programmes which carry product placement. However, programmes which the BBC acquires from third parties may carry product placement, including programmes made by the BBC's commercial enterprises, such as BBC Worldwide, and these will be subject to the new Ofcom rules.

Are there any products which can not be placed?

Products or services which cannot be advertised on television in the UK (such as escort agencies, pyramid schemes or weapons) cannot be placed in UK programming. The Broadcasting Code also prohibits the showing of any programmes, whether made in the UK or acquired from abroad, which carry placement of cigarettes, tobacco products or prescription-only medicines.

In addition, there are a number of other products which cannot be placed in UK produced or commissioned television or on-demand programmes (although they can be included in films for cinema). These are:

• smokeless cigarettes and other smoking accessories;
• medicines (i.e., over-the-counter medicines as well as prescription-only medicines);
• any alcoholic drinks;
• infant formula and follow on formula;
• goods or drinks that are high in fat, salt or sugar (HFSS); and
• gambling services.

These additional products were prohibited by the Government in order to protect the health and welfare of viewers, especially children, but the result of this is that a vast swathe of potential advertisers who may have considered paying to place their products in programmes, particularly food and drinks manufacturers, are now unable to do so.

Interestingly, the Broadcasting Code fails to address the difference between product placement and brand placement. For instance, can a fast food company, pay to have its name referred to in a programme or would this be regarded as a promotion of an HFSS product? The company could legitimately argue that it does not, if many of its products are not HFSS products.

Are there any conditions on placement?

There are a significant number of conditions set out in the Broadcasting Code which must apply for product placement to be legitimate. For example:

• the product placement must not influence the content or scheduling of the programme in such a way that it affects the editorial independence of the broadcaster;
• product placement must not be overtly promotional;
• the programme must not give undue prominence to the products; and
• no surreptitious advertising techniques can be used.

What about informing viewers of the placement?

For any programming, made for transmission on an Ofcom licensed channel and containing product placement, the broadcaster must display the universal prescribed "P" logo on the screen at the start and end of a programme and after the programme returns from any advertising breaks.

The logo is available in two versions so that it can be used on a light or dark background and must be displayed in accordance with Ofcom's prescribed criteria.

The logo signalling requirements do not apply to programming acquired by a broadcaster ie. where it has not been produced or commissioned by the broadcaster. However, such programmes still need to comply with other relevant provisions of the Broadcasting Code, and broadcasters may therefore, as a form of best practice, wish to display the "P" logo to ensure the audience is made aware that the programme contains product placement.

Final Thoughts

Whilst product placement has on the whole been welcomed by the advertising industry, there is no indication, particularly in the current climate, that advertisers will increase their marketing budgets to take advantage of the new rules as opposed simply to changing their priorities within their existing budgets: so it is unclear what financial benefit the channels will gain.

The UK Government has said that the new rules will "provide meaningful commercial benefits to commercial television companies and programme makers". However, since these are two entirely different entities, it is unclear to whom the payments are made and thus which of the two will get the benefit. The two entities no doubt will come to some compromise, but it will not be straightforward.

Some advertisers may be reluctant to part with their funds if they have no control or influence over the way their product is portrayed or used in a programme, or indeed whether it ends up being used at all.

Other advertisers will be excited about the development of digital technology which will allow them to place products into programming at the post-production stage, with potential for advertising different products in different markets.

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¹   See http://www.ofcom.org.uk/tv/ifi/codes/bcode/  
²   See http://www.legislation.gov.uk/uksi/2010/831/contents/made  
³   See http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:332:0027:0045:EN:PDF
⁴   See bbc.co.uk/bbctrust/assets/files/pdf/about/how_we_govern/agreement.pdf

Client Alert 2011-044