• by Wayne Friedman , Staff Writer, March 12, 2009

In Europe, branded entertainment is considered both a good and bad thing.

On the same day that the Italian government agreed to allow product placement on local TV shows, the British government gave a thumbs-down to branded integrations for its commercial TV network, ITV.

This wasn't an easy decision for Italian officials, who are still concerned over youth product placement. While a ban on product placement will continue for children's shows in Italy, the murkier area comes around teen TV programs, where it will be okay for marketers to run in-show product appearances.

The European Union, under a new directive, allows product placement for its member countries, as along as they adopt specific rules.  Of course the tussle over European product placement fees occurs against a backdrop of steep declines in traditional TV advertising in those markets.

The United Kingdom went in the other direction as Italy -- much to the chagrin of British senior executives at the commercial network ITV. U.K. media minister Andy Burnham explained it this way: "There is a lack of evidence of economic benefits, along with very serious concerns about blurring the boundaries between advertising and editorial."

Meanwhile, in the U.S., few are concerned about those types of "boundaries" -- other than the ho-hum concern of whether the placement is "organic."

The interesting remark is the "lack of economic benefits." Burnham didn't go into further detail. What does branded integration actually mean to networks these days? If it's 10% or 15% of a typical episode's budget, that could be substantial. But little research bears out this financial data.

Typically there is more at stake.  One wonders whether he was talking not just about the media, but perhaps marketers as well.

In the U.S., a network can gain leverage with marketers, demanding that in addition to a branded integration fee, a marketer spends many more millions on traditional TV media buys.

The irony here is that TV marketers start up product placement deals to compensate for the slipping effectiveness of traditional TV media deals.

Yet for well-rated, reality shows, for example, a network can demand marketers spend more on traditional TV commercials to get to that product placement.

In Europe, these decisions seem to be part cultural, part political. One wonders how product placement will transform each respective country's TV advertising coffers.