Carat Strikes Product-Placement Deal With UK's ITV

by Steve McClellan, Jul 11, 2012, 2:38 PM

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Aegis Group’s Carat has struck a deal for one of the first product-placement deals on commercial TV in the UK. The agreement is with commercial broadcaster ITV to place its client, tourist organization Welcome to Yorkshire, in the popular prime-time soap opera “Emmerdale.”
 
Product placement, while commonplace in the U.S., is a fledgling business in the UK. The practice was authorized just last year and is tightly regulated. Marketers have just begun to test it.
 
According to David Croft -- the account director at Carat, who negotiated the deal on behalf of the tourist group -- the Emmerdale agreement is the first product-placement deal for both Carat in the UK and the ITV program. It is probably among the first deals to be implemented since the practice was authorized last year.

The industry is cautiously feeling its way into the sector, he said, noting that “you can probably count on one hand” the number of deals in place at this point.
 
That said, the UK ad industry has expectations that product placement will grow into a multimillion-dollar business in a relatively short period of time, said Croft -- estimating that it will grow into the “tens of millions” over the next three to five years.

The sector’s growth will likely follow the pattern of sponsorship activity, which was authorized in the UK about 10 years ago, Croft adds. At first, sponsorships were more tightly regulated than they are today, and activity was slow to start. A decade later, as marketers became more familiar with the field and saw valuable results, the UK sponsorship sector grew to an estimated $2 billion-a-year business.
 
The placements for Welcome to Yorkshire include branded leaflets, posters and stickers on doors, per Croft. By regulation, he noted, placements must be “editorially justified and within the context” of the broadcast. Programs that carry product placements must also notify viewers by displaying the letter “P” at the start of the broadcast. News and children’s programs are still banned from the practice, as are certain brand categories, including alcoholic beverages as well as certain soft drinks and snack foods.
 
"Emmerdale" attracts an average audience of 7.6 million viewers and 34% share of the audience for each of its five episodes every week. The Welcome To Yorkshire deal is effective from July through the end of the year.
 
As part of the agreement, ITV has commissioned brand research company Repucom to analyze the placement program, providing details about how much on-air exposure the product placements receive, to what extent they register with audiences and how the total program translates to paid media impressions. “We think over time there is a lot of value there,” said Croft.

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