The Ads that can't be skipped

11 October 2021. Published by Tom James, Associate

Product placement is an increasingly popular form of advertising in which goods are deliberately featured in a tv show, film etc. Whilst it used to be primarily confined to use in films such as Back to the Future (Nike), and ET (where Reese's Pieces were ET's favourite snack). Use of product placement is on the rise, and this summer Love Island was dubbed "the most commercialised show ever".

The increase is partly linked to a change in viewer habits, as consumers are taking steps to avoid traditional adverts (by skipping or fast forwarding or paying a premium to avoid altogether) – consequently, product placement is an increasingly important way of brands showcasing their products to consumers.  Indeed, ITV launched Shoppable TV, a shopping interface, alongside Love Island's 2021 series, which allows consumers to search and purchase products seen on screen.

British broadcasters' use of product placement is regulated by Ofcom.  A breach of Ofcom's regulations comes with potential negative exposure for broadcasters and brands as Ofcom decisions are published (broadcasters also risk fines and/or loss of licence).  We, therefore, suggest, before considering product placement, brands are aware of the key regulations.  These include the following:

  1. Restrictions.  There are restrictions both on programmes where products can be placed – e.g. products cannot be placed in the news or in children's programmes – and on what products can be placed – e.g. restrictions on placing alcoholic drinks or food and drink that are high in fat, salt or sugar (HFSS).  Restrictions will need to be adhered to.  It is worth noting that some streaming services are not regulated by Ofcom – likely why some movies only available on streaming services include HFSS placed products.  However, the Secretary of State for Digital, Culture, Media and Sport recently announced a consultation to level the regulatory playing field between traditional broadcasters and streaming services.  Until this point, this is likely to be a relevant consideration for some brands as to where products are placed.
  2. Placement.  Consumers are naturally separating themselves into like-minded groups by virtue of what they're watching, so brands can advertise to a more-tailored audience.  Ofcom's rules require that references to products cannot be promotional (i.e. directly encouraging purchase), so the real benefit for brands is aligning in a natural/organic way with a popular tv show/film or character. 
  3. Exclusivity.  Ofcom's rules require that a product shouldn't be given undue prominence.  However, it may dilute the value of your advertising if your product is featured alongside competitors' products.  Brands should consider whether they want exclusivity within an appropriate product category.  If so, any such exclusivity should be agreed with the production company and reflected in the contract.

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