Friday, October 19, 2007

Invading the content (Part 3)

Continued from part 2..........

The reasons for the rising level of TV product placements

1. In markets such as the UK, product placements are completely banned, while in Canada, one can do placements only in the general entertainment genre and not in the kids' sphere. In USA it is free and the trend is visible. In 1984 the total TV product placements in the USA was to the tune of 188 million dollars while by 1994 it became 464 million dollars and in 2004 it rose to a staggering 1878 million dollars. If in film and other media placement is also included the figure reached almost 3500 million dollars in 20042. Television product placement in the USA is growing at a faster rate than any other media but still only represents just over 1% of advertising spend.
In India there is virtually no legal restriction over the use of product placements in TV programming and it is in the rise.

2. One of the key principles which govern European advertising is the ‘separation principle’. This is designed to ensure audiences are not misled about the nature of the content – advertising or programming – they are watching. The Ofcom Broadcasting Code, published in May 2005, includes at Section 10 a specific requirement for commercial broadcasters to maintain appropriate separation between programme and advertising content. The principle of separation between advertising and editorial material has been an integral part of regulation since the first commercial appeared on the UK’s television screens in 1955. Indian cinema have had product placements from 1940’s since Coca Cola appeared in the classic ‘Chalti Ka Naam Gaadi’ but it was an exception rather than a rule. Since it was not a widely used tool India don’t have any key regulations in place .It is one of the reasons for the current increase in product placements in TV.

3. TV advertisements during commercial breaks arent considered fully trustworthy by the target audience. Most ads are not taken in face value or are seen as onesided. Most ot the TG does not absorb ads as a fish would absorb water but instead, they are made to adsorb. Hence products seen or mentioned as part of the content and not part of commercial breaks are taken in more as passive learning. Eva Steortz reported that viewers had an average recall for placements of 38% . The Indian success stories of P&G and the likes with the careful in programme product placement in ‘Khul Ja Sim Sim’ ,those tales of Nokia,Airtel, and ICICI bank rising to fame when they got associated with ‘Indian Idol’ and the case of Amitabh Bachan signing a Kotak Bank cheque, with a Parker pen and the famous Airtel jingle going on air during “phone a friend” in ‘KBC’ are all testimony to this phenomenon.

4. Increasing pressures on traditional broadcast advertising revenues makes it imperative for broad cast houses to think in favour of new avenues of money.Potential new contributors to the commercial broadcasting funding mix needs to be given due consideration. Product placement is one potential revenue source that has long been prohibited in television programmes by virtue of the separation principle in the west and by virtue of the controlled economy , anti multi national policies and the media monopoly, particularly in TV, that we had in India till the advent of 1990’s.
From when product placements accounted for just three per cent of the overall ad spends of brands in 2004, it went up to six per cent last year and analysts predict that by 2007, product placements would include almost 12-15 per cent of the total advertising spends of brands4. Clearly the broadcasters and producers are making hay while the sun is out- blaring.Greed as some quarters may accuse it, but the media house’s desire to make more profits is one reason for product placements in TV growing at this rate.

5. There are more than 80 television channels in India, reaching more than 24 million cable and satellite homes and with over 150 million viewers with varying and vivid tastes5. This is described by the familiar terms ‘Clutter’ and ‘audience fragmentation’ which according to researchers are driving product placements, through out the world . Yet advertising budgets climb up every year giving headache to advertisers and ad agencies. Consumer goods companies spend anything between 5 to 15% of their turnover on brand building and advertising. The largest consumer goods behemoth in India, HLL spent Rs 759 crores on advertising in 2003 and others aren’t quite different either. The results however aren’t quite promising. Message A Day index (MAD index) in Indian cities competently equal western cities and registering a products name and features in the TG have become a Herculean task.
In film and in programme featuring of brands and their usage works well than traditional advertising, and studies in the west have supported this finding. Researchers have recorded “strong recall” for product placements. Audience beliefs about product placement and their purchase intention after getting exposed to such placements and their correlation have been researched, even cross culturally and found to be existing by many .
Practicing Media planners have observed that brand recall through advertising is 18 per cent, but it is three times more – 53 per cent – through product placements in films. Also that if the in programme product placement is followed by the product ad in the next commercial break, the chances of brand recall is dramatically higher than simple ‘commercial break advertising’. This phenomenon, however needs more empherical research to be substantiated.........

To be continued >>>>>>>

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