Exclusive Data Released today from NMG’s Tracker™ 2012 Database

“Paid for” product placement began its journey in November 2007 within the EU’s Audiovisual Media Services Directive 2007/65/EC.  This sought to harmonise television practices across Europe. Member states could adopt limited “paid for” product placement subject to these provisos:

• Exclusion of certain products such as tobacco
• No placement in news, current affairs or children’s programmes
• Signalling of placement at the beginning, end and after every commercial break
• The product placement must not influence editorial content
• No undue prominence
• The placement cannot promote buying the product

Ref: http://europa.eu/legislation_summaries/audiovisual_and_media/l24101a_en.htm

Ofcom conducted an extensive consultation in order to formulate its recommendations for implementing the Directive. In March 2010 the Department of Culture Media and Sport published its summary of the consultation responses.

Specifically, paragraphs 14 to 17 of the summary dealt with future market estimates, which varied at year 5 from £10 to £25m to £175m+.

Ofcom settled on a year 5 estimate of £25m to £30m and this was incorporated into the explanatory memorandum laid before Parliament wherein the DCMS laid out a 10-year benefit of £215m

Ref: http://webarchive.nationalarchives.gov.uk/+/http:/www.culture.gov.uk/images/consultation_responses/Consultation_Report_final.pdf

On  28^th February 2011 Ofcom permitted “paid for” product placement in a limited range of programmes, for limited brands subject to restraints on undue prominence, protecting editorial integrity, and preventing placements from being able to influence sales.

NMG Commentary.

Why was there such a wide range of market size estimates?

When examining the Ofcom summary broadly the lower estimates came from agencies already experienced in UK product placement or services allied thereto.

The higher estimates came from media related companies with a vested commercial interest in the largest possible market. Their estimates were based on extrapolating the US and Australian experience with product placement achieving 5%, after 5 years, of total advertising revenue. There appear to be flaws in this approach:

• • The UK, uniquely, has a buoyant PBS broadcaster in the BBC. Excluded from the “paid for” market, but having a 27% viewing share. In the States, for example, PBS scores a Prime Time rating of 1.3, versus the top four networks 19.3

Source: BARB Feb 20-28 and Nielsen.

• • Madigan Cluff/Screen Digest reports that US branded entertainment figures are 14% of total TV advertising revenue. This includes all forms of branded entertainment – for instance digital videos shown alongside a branded sponsor or events tied to a broadcast, not just paid for product placement. In their research for last year’s Screen Digest’s report Madigan Cluff estimates the UK market for “paid for” placement in 2011 at 0.1% of total advertising revenue (£7m), rising to 0.9% (£38m) in 2015.

• • Other estimates were based on the UK TV Sponsorship market. However, ISBA noted to Ofcom that the market for TV sponsorship had taken 25 years to reach around £200m. Further, NMG believes the TV sponsorship model is not relevant on two levels:

• ♣ It competes for the same budgets as “paid for” placement.

• ♣ There was no previous TV sponsorship market, hence its rapid adoption, however, “paid for” placement competes with the established free prop placement industry created by NMG Product Placement in 1984.

John Barnard, Chairman of NMG Product Placement said: “Clearly in the light of such varied estimates there was a need to find an alternative methodology to assess the “paid for” placement market size. Without a new approach then comparing the relatively low deal take up in the first 12 months is meaningless.

NMG’s unique database, Tracker 2012, provides a flexible resource, which allows us to apply empirical methodology that is refreshingly simple and transparent. In January 2012 NMG recorded and analysed 85 hours of the programmes most likely to contain “paid for” placement opportunities from these commercial TV channels: ITV1, C4, E4, C5, MTV UK and Sky 1

NMG’s Chief Visual Brands Analyst, Chloe Thompson was briefed to enter into NMG’s Tracker 2012 database opportunities that appeared on screen, which were, in our experience, commercially viable and complied with Ofcom’s Guidelines.

NMG examined all these scenes and noted opportunities where a brand appeared in the right context and with likelihood of repeated exposure. The brand could be present due to free prop supply or serendipity having been bought by the production.

To this universe we added opportunities where a brand could have been present. For example, frequent dialogue at a shop counter where a counter top display unit might be added or exterior scenes where posters or display boards would, in reality, be appropriate.

John explained “Our logic is simple; since Ofcom’s Guidelines do not permit a brand to interfere with creative content, the “paid for’ opportunity has to already naturally occur within the script with sufficient frequency, relevance and quality to justify any brand allocating scarce budget. Typically, this will be lead cars, high involvement products such as smartphones, tablets, distinctive fashion wear and set dressing in fixed sets such as the Nationwide ATM in Coronation Street”.

Summary of the Empirical Study Results:

The universe of opportunities in January was found to be:

However, some of these appearances were fleeting, or of poor quality, so NMG applied a number of reasonability filters, first excluding appearances on the Tracker scale 1 to 3 star, then those whose overall monthly total duration was less than 15 seconds and finally those whose total monthly appearance was under 30 seconds. This data trail followed:

John continued: “The next challenge is to evaluate a commercial value range based on Tracker Media Values which benchmark exposure to averaged 30 second spot advertising rates. Broadcasters have been discrete about the market values actually achieved so far, so NMG applied a reasonability approach.

Further NMG excluded from our considerations activation opportunities, which are sometimes packaged with the “paid for” offer, since these in themselves require the brand to allocate additional budget, and might be problematic. In an earlier NMG study, Paul Herbert, a specialist in media law and regulation at Goodman Derrick LLP voiced concerns that some activation opportunities might indeed contravene Ofcom Guidelines:

… “Additional sensitivities will also arise because of the off-screen promotional opportunities offered. Where those involve, for instance, members of the cast promoting products with which they interact in the programme, there is a danger that this could be regarded as an endorsement of the product by the character, which is a form of promotional reference.”

http://www.newmediagroup.co.uk/?p=505

John Barnard said: “We acknowledge that we are trying to evaluate an ever changing basket of opportunities. No two are the same. Some like this Peugeot in Emmerdale lead car, cast in an on-target role could be worth many times more than our Tracker Media Value.

Conversely, others like say, the Dolce Gusto machine in ITV’s “This Morning” might have a declining value as the viewer progressively ignores the product, as it becomes part of the everyday set dressing.

Likewise, the requirement to flag “paid for” placement with the “P” sign, which does not apply to free prop placement, could lead the consumer to believe that the product is being “plugged” and gratuitously inserted in their entertainment thereby creating a negative reaction.

A further dynamic is the financial efficiency of the free prop supply route to brand integration. NMGs’ clients typically enjoy a multiplier where the ratio of fee to Tracker Media Value can be from 1:10 up to 1:50. Thus their propensity to pay even Tracker Media Value may be diminished.

NMG’s experience leads us to believe that only those opportunities in the final table – over 30 seconds per month exposure, 4 star and above would be sellable. For example, Nationwide’s ATM and advertising board, viewed as a successful “paid for” example, clocked up 149 seconds in January.

Accordingly NMG factored January’s results of £1.6m and applied a +/- 50% rating to take into account the above commercial dynamics. Thus, we establish:

NMG’s estimate of the “paid for” market is within a range of £9.7m to £29.1m p.a

Commenting on these results, Sarah Curran, NMG’s Business Development Director said:

“Over 12 months NMG has carried out pioneering, innovative product placement research. Sometimes interested parties focus on the messenger and not the message.  With this latest study NMG provides a realistic range of market values.”

John Barnard added:

“NMG’s research reconfirms Ofcom’s initial estimates and those of the product placement industry as a whole.

This provokes the question: Why has the first 12 months deal take up still been so relatively small?”

One of the leading product placement commentators is Professor Chris Hackley of Royal Holloway University of London. In his latest analysis he identifies a number of issues: the pre-existing and successful free prop placement industry; commercial TV’s adoption of a new computerised evaluation system derived from sports sponsorship; and competition from overseas programmes; but overall the failure of the broadcasters to understand and work with the free prop placement agencies and relate their offers to this alternative route to screen.”

http://www.chris-hackley.com/

Final Word

John Barnard: “There are many companies who have adopted product placement as a major communications tool and already commit significant budgets, measured in £s millions. For example, today, here at Pinewood James Bond’s latest epic adventure “Skyfall” in in full production and rumoured to have raised US$45m in product placement deals.

Paradoxically, when TV broadcasters across Europe screen this movie all of the placements will remain in place whilst at the same time our own TV production industry struggles to raise incremental finance hamstrung by a series of restrictive guidelines.”

http://www.theaustralian.com.au/news/world/more-than-a-word-from-007s-sponsors/story-e6frg6so-1226047962752

NMG Product Placement is based at Pinewood Studios and founded the UK product placement industry in 1984. NMG commenced measuring product placement in 1987.

NMG Product Placement is retained by over 90 major brands.

Tracker™ 2012 records and evaluates over 6000 brand appearances each year from over 1135 programmes on over 21 TV channels. Each brand appearance is measured to the nearest second and categorised into 5 levels of saliency.  Brands are further segregated into over 110 product categories.

For comment or interview please contact:

John Barnard, FCA, Chairman, NMG Product Placement: john.barnard@newmediagroup.co.uk

or

Sarah Curran, Business Development Director on sarah.curran@newmediagroup.co.uk or 01753 655866

http://www.chris-hackley.com/

In the course of a year NMG analyses 30-40 screenplays ranging from multi-million dollar productions such as Prometheus, Carnage and Ridley & Tony Scott’s new miniseries Labyrinth, to TV series such as Vera, Him & Her & Trollied.

Screenplays follow a fixed industry format created in the States and dating back to typewriter days. They use Courier 12 font and US letter size paper which means that as a rule of thumb each page represents a minute of action.

Screenplays also follow set layouts and formats:

Sluglines: the location, time of day

Action blocks: What the characters are doing right now

Character Names: Character names in CAPITALS who are about to speak

Dialogue: Centred underneath the character speaking

Other standardised layout is used for scene transitions, character introductions, and unusual actions.

The end result is a lengthy document that at first glance can be difficult to follow and visualise the final on-screen action.

That is where NMG’s skills come in to play. Our job is two fold: to identify early opportunities for our clients’ brands to positively appear; secondly to protect our clients’ brands from negative appearances which might otherwise result.

So NMG overlays another level of expertise to our screenplay analysis using the skills and knowledge acquired by being in the heart of the entertainment industry.

Using our experience of say, the director’s past productions, the stars’ personas, even competitive productions being made elsewhere we can begin to visualise the final production as it will appear on screen.

For instance, Diageo’s Johnnie Walker Black Label fits perfectly with Gary Oldman’s character George Smiley in Tinker Tailor Soldier Spy, but not well in the hands of James Buckley and Blake Harrison’s characters, Jay & Neil in The Inbetweeners: The Movie.

Likewise, the BlackBerry Torch 9800, as ‘brand of choice’ for Kelly Adam’s charming and intelligent character Emma Kennedy in Hustle works, but not for Tina Malone’s character Mimi Maguire in Shameless.

Screenplay analysis: time consuming, specialised, encyclopaedic knowledge needed, but all in a day’s work at NMG!

http://www.brandchannel.com/home/post/2012/02/29/UK-Product-Placement-022912.aspx

84^th Annual Academy Awards – February 26^th 2012

As excitement mounts in the build up to the Hollywood’s Oscar Awards NMG is celebrating brand placements in two Oscar nominated movies: Tinker Tailor, Soldier Spy and The Iron Lady.

Gary Oldman is nominated for Best Actor in Tinker Taylor Soldier Spy and Meryl Streep for Best Actress in The Iron Lady, already awarded a Golden Globe.

Other movies featuring NMG brands are Roman Polanski’s Carnage, which hits the cinemas on February 3^rd.  The movie has caused a buzz amongst critics who applaud Jodie Foster and Kate Winslet for their performances.

The Inbetweeners was 2011’s runaway success, breaking records with the most successful opening weekend at over 400 UK cinemas and fastest ever selling DVD!  The movie pulled in audiences to make over £45 million at the box office.

NMG’s role of honour continues with successful placements in One Day starring Anne Hathaway; Woody Allen’s You Will Meet A Tall Dark Stranger and Rowan Atkinson’s Johnny English Reborn.

Coming up in March look out for Salmon Fishing In The Yemen with Emily Blunt and Ewan McGreggor and Cameron Diaz and Jennifer Lopez’s What To Expect When You’re Expecting in May.

Keep your eyes peeled for more NMG brands in legendary Ridley Scott’s Prometheus with Charlize Theron. In July watch out for The Dark Knight Rises… when Batman hits the silver screen! With a formidable cast, actor Christian Bale plays the hero himself, an all action movie directed by Chris Nolan who gave us Inception.

Other projects in NMG’s pipeline in pre-production is Rush from Ron Howard starring Chris Hemsworth and at scripting stage Fast and Furious 6, which brings Vin Diesel into the spotlight.

BBC1′s hit drama ‘Sherlock’ has propelled British Ceramics designer Ali Miller into the spotlight.

http://www.guardian.co.uk/tv-and-radio/tvandradioblog/2012/jan/17/sherlock-teapot-sales-ali-miller

Although a serendipitous appearance, Miller completely outsold the tea set in the same evening it was featured in the final episode of the series, turning our attention to the power of product placement and branding in television and film. The show has been responsible for several retail triumphs in recent months, now widely known as ‘The Sherlock effect’.

Sherlock has been a worldwide hit, winning 26 International awards and has been sold to 180 territories. It has also been translated into several other languages due to its popularity.

http://www.huffingtonpost.co.uk/2011/12/30/sherlock-benedict-cumberbatch-goes-global_n_1176026.html

Although rules governing sponsorship rights and ad breaks are subject to change, the brands embedded in the programme, including NMG’s client BlackBerry will be seen by audiences abroad, whenever the show plays.

In November 2011 NMG in conjunction with Madigan Cluff and ETS produced a report on overseas broadcasts:

http://www.newmediagroup.co.uk/?p=676

John Barnard NMG’s chairman said:

‘NMG represents many major global brands and as the branded content market becomes more fluid it is vital to understand the results of our work on this broader basis. This study, and the potential to extend measurement to overseas markets, creates a new service which allows advertisers to see the complete return which their commitment to placement receives’.

NMG’s Tracker database was developed to detail brand appearances and enables clients to see the far reaching value of these placements. The value of Brands in Sherlock rises when the programme is exported. A combination of a winning production, seamless product placement and precision tracking will enable advertisers to see the impact of their investment both at home and overseas.

http://www.chris-hackley.com/p/product-placement.html?goback=%2Egmp_159149%2Egde_159149_member_81280079

With the increasing discussion and opportunity for product placement in UK originated programming – NMG Product Placement has worked with Madigan Cluff/ETS to understand how much additional exposure occurs for a brand when it is placed in a programme as it is exported around the world.

Many UK programmes are extensively exported – carrying any prop placements which have been included in the production. To demonstrate the large number of countries which see UK production – we analysed some major series for 2010

The chart above is based on analysis of the schedules of the major free to air stations in each country. It shows:-

UK productions do make a significant impact on schedules in a variety of markets worldwide

That a significant proportion of these transmissions are on primetime on major stations

For the brand which appeared in the programme there will generally be a delay before the show is seen. Although some US series are now playing in Europe within weeks of their US premiere – it generally takes a significant period of time for an individual episode to be purchased by the overseas station and played. Commonly there will be a one/two year lag between original UK showing and the programme being contracted, dubbed and ready to play in the market.

However it is extremely rare for the visual part of a scripted programme to be altered meaning that whatever was seen in the UK transmission will appear wherever the show plays.

Tracking the performance of a placement

NMG co-operating with two other Pinewood based companies are able to track the delivery of UK placements. Essential Television Statistics (ETS) tracks all exported programmes  in over 30 markets around the world – identifying each individual episode.  Sister company Madigan Cluff is able to work out the relative advertising value as the programme is broadcast in new markets.

As an example of this we took a placement for Blackberry which appeared in an episode of Lewis on May 2^nd 2010. We tracked further transmissions of this episode as it appeared around the world. We then estimated the value of each appearance based on local real media costs Vs the value of the initial showing on ITV. The table below shows the additional exposure which occurred by the end of August 2011.

By the end of August 2011 the placement had achieved audiences to the value of an additional 203% of the original ITV value. Half of this value came from repeat showings on the ITV network – but half came from prime time transmissions around the world.

Another example is Mistresses – where episode one of the third season contained a placement for Clearblue – the pregnancy prediction kit. In the 12 months since its transmission on BBC1 it has played extensively in late evening slots across Europe – cumulatively adding an additional 77% of exposure.

Tracking the performance of a placement

As a final example – a placement of Blackberry in an episode of Dr. Who. This placement has taken a longer period to make its way around the world – but again there is a 75% cumulative value gain in comparison to the original UK slot.

Placement strongly imbeds a product into a programme. Whereas when a programme is repeated or exported – all the  advertisements and some of the sponsorships change – whatever is in the programme stays and gets seen again. These examples demonstrate that placing brands into key shows selected both in terms of their target audience and their global footprint gives advertisers the ability to get greater efficiency from placement.

It is not just a free bonus resulting from a fortuitous placement deal. It is also a benefit which can now be valued, tracked and potentially predicted.