In Exchange For Cheap TV
by Cath Everett
First Published on www.mycustomer.com
U.K. - Although three out of five UK consumers would be prepared to accept product placements in exchange for free or cheaper premium TV programmes, the market is only ever expected to add to rather than replace traditional advertising.
According to research undertaken by YouGov on behalf of Deloitte, younger viewers aged 18-24 were most open to such a trade-off, with seven out of 10 being prepared to accept it versus only a quarter of those aged 55 or over.
But while two fifths of those questioned found product placement per se annoying, 72% said they would still watch TV programmes regardless of whether it was present or not. A mere 5% would actively avoid them.
Older viewers of 55 or over were again the least tolerant of watching content that included product placements with or without a trade-off, with 70% saying that they would be willing to do so. Some 81% of consumers aged 18 to 24 did not have a problem with it, however.
But while Deloitte indicated in its report entitled ‘Perspectives on Television in Words and Numbers’ that expenditure on product placement may divert some billings away from other forms of TV advertising such as direct sponsorship or traditional commercials, "its revenue contribution is unlikely ever to be more than additive", it said.
The value of product placement would depend on the extent to which it could drive advertisers’ sales and, given the advent of online advertising, its ability to measure impact. One US survey revealed that where placement proceeded commercials, however, recall increased by 20%.
Therefore, while first year sales from TV-based product placement are expected to be in the low tens of millions next year, the figure is expected to exceed £100 million or 3% of aggregate industry revenues as the economy recovers. Aggregate advertising revenues are predicted to hit £3.25 billion this year.
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