Welcome to our blog - the7Stars – Blog | largest independent media agency in the UK | Page 14

After a drawn-out consultation process, which started in June 2009, Ofcom published its rules for product placement on TV on December 20th last year. The new rules will come into place on Feb 28th 2011.

Product placement (PP) on TV will now be allowed in films, including dramas and documentaries, television series including soaps, entertainment shows and sports programmes. However it will be prohibited in children’s and news programmes and in UK-produced current affairs, consumer affairs and religious programmes, as well as the BBC. Not all advertisers will be able to jump on the bandwagon. Placement of tobacco, alcohol and gambling are banned, as are medicines, baby milk, and food or drinks that are high in fat, salt or sugar.

The nanny state-nature of the soft introduction of PP to sensitive UK TV audiences doesn’t end there. Ofcom is about to unveil a logo that will appear at the start of programmes with product placement for a minimum of three seconds as well as at the end. It will also appear following the return from every advertising break. (They considered, but resisted, a rule requiring broadcasters to provide viewers with a list of placed products during every programme.)

Product placement feels like a good solution for advertisers seeking to get closer to content, and it’s a smart way to avoid the fast forward button in PVR homes. As with most new communications channels, the first advertisers to get involved will learn the most – and benefit from the kudos and PR. Despite Ofcom’s caution, What’s Hot believes that viewers are more than ready for this style of communication, as PP is already so prevalent in films and US imports on television.

It has its limitations though and nobody is predicting that the revenue will be particularly significant – most industry estimates range between £25M and £100M, i.e. less than 5% of total TV ad revenue. While ITV has publicly welcomed the move, Channel 4 is more sceptical, although we should point out here that Channel 4 does not produce its own programmes, and so is unlikely to benefit directly from product placement.

There is an interesting P.S to the article, courtesy of Ofcom. At the same time as introducing the new PP rules, they introduced a new relaxation to the TV sponsorship regs. Advertisers will now be allowed to place products in the shows they are sponsoring, and their logos will be able to appear briefly during transmission.

So while Product Placement is grabbing the industry headlines in 2011, smart advertisers will be working with the broadcasters to exploit their TV sponsorships in new and interesting ways.

In September, What’s HOT? predicted that, in order to prevent check-in fatigue and to give something back to users, Facebook would have to introduce a reward mechanism for its new Places check-in (currently only available via iPhone app and mobile site). Facebook has since revealed that within the next two months it will be introducing ‘Facebook Deals’ in the UK.

Like fellow location-based apps, Facebook Deals encourages users to check-in and let their Facebook friends know where they are. In return for visiting and checking-in, companies will be able to reward users in one of 4 ways:

Individual – this deal entitles the user checking-in to a deal, usually discounts or gifts with purchase, e.g. checking in to a Gap store may earn 25% off Gap Jeans

Charity – by checking into a given business, said business will pledge to donate £x to a charity

Loyalty – rewarding customers for visiting a business on a number of times, e.g. Checking into a Wetherspoons pub 12 times may entitle the user to a free bottle of wine

Social – this aims to reward groups of customers who check-in together (via tagged others), rapidly spreading word across all tagged customers profile pages

The above deals seem to give great value and incentives to the customers for checking in and publishing their visit to all their Facebook friends. However, this brings some concerns in terms of how Facebook will control mass check-ins as well as how users of Facebook take to the populated mini feeds, filled with business deals?

Facebook Places is now a real threat to Foursquare and other smaller competitors such as scvngr. Moreover the introduction of Facebook Deals enables FB and its shareholders to get a better financial return from its vast userbase.

Spotify haven’t yet found the best mix for their subscription model to guarantee success in the long term. They are seeing operating losses and a bleak future if nothing changes. Not enough users are converting to subscribers as the service provided by the free version is more than adequate! There is plenty of competition in the market for free music streaming meaning users will simply go elsewhere should Spotify stop the free service. Without growth this year in the number of subscriptions the bubble is surely soon to burst as they rely too heavily on that source of income. Therefore, amendments to their model are require.

Spotify, as we speak, are making changes to improve what the premium service offers. Hot off the press: they have just integrated with Shazam allowing users to add songs immediately to their playlist after discovering it on Shazam. They have also launched an app that allows its premium subscribers access the service through Logitech’s new range of internet radios. We shall see how successful this is at converting users of the free service into paid subscribers. They would only require a relatively small percentage of users to convert into subscribers to turn the business’s balance sheet in the right direction, giving Spotify a good chance of pulling it off.

The advertising-funded model can work to cover the costs of the record labels demands, but not necessarily a business as a whole. This model has the potential to work but needs the time for a service to build in scale to make it a profitable business and would eventually face strong competition from radio where it would predominantly compete for advertising revenue, putting the business model at risk. We will see as awareness of these services along with the number of users increases (with not only the tech-savvy audience utilising what is on offer) how sustainable this ad-funded model really is.

Spotify’s delayed launch in the US highlights the high demands record labels can put on the table restricting expansion of these types of music platforms. Spotify have recently been unable to meet its internal deadline of the end of 2010 to launch due to the negotiations over the minimum guarantees they can offer EMI Music, Universal Music, Warner Music and Sony Music. With the financial situation Spotify face in Europe caused by not having enough subscribers to keep the business at an operating profit, the risk that a US launch brings could be suicidal. Yet, with many big players in the US market Spotify could miss the boat completely and therefore miss out on massive potential revenue should they delay any launch much longer.

There remains hope for the freemium music platforms in the long term. The changes Spotify is making to make the subscription model work by improving what it can offer will improve its chances of sustaining itself in Europe, so the bubble hasn’t burst just yet – which if it ever does would be a massive loss!

Conversing with your fridge via your mobile phone to see what perishables are about to go off, starting you car on a cold day from the warmth of your toasty bedroom with an iPhone app, or triggering your Sky+ to record House from a beach in the Maldives… just some of the more outlandish promises technology has made to us, and in some cases delivered.

But what of true, useful technological convergence… the coming together of previously siloed gadgets, protocols and usability to create convenience, choice and new ways of consuming on our terms… how is this really going to change the way we live in the home ?

Forget 3D TV, the hot prospect of the moment is WebTV. Finally, the long-promised collision of the (social) web and internet enabled (IP) TV is happening. A one-stop solution, out of the box that offers on-demand content, sharing and social networking.
With the UK leading the world in digital TV penetration (93%) and consuming vast amounts of on-demand video content (34.7m people consumed over 17 hours in November), it would appear that Samsung, LG and others will make headway fast.

Not to be outdone, consoles such as Xbox360, PS3 are now establishing themselves as more than just gaming devices. On-demand platforms such as blinkbox, LoveFilm, and Netflix seeking platform proliferation in a highly contested streamed film/TV space have sought new audiences among the 5m PS3 and 6m Xbox360 owners in the UK. These are platforms to watch…literally.

But for What’s Hot, our excitement around convergence is buoyed by the app. The recent Vegas CES 2011 gadget ’n’ tech orgy was all about the ‘app-lification’ of everything… apps replacing websites and even hardware… no more pesky remotes to lose behind the sofa !

So, apps are the future, appsolutely. Baker Tweet, a Twitter-based app that allows communication between an oven baking fresh croissants and followers is able to tweet when they are ready, assuring the freshest possible experience. There is seemingly no bounds to what can be done via interfaces that let gadgets connect.

To coin the phrase, there’s no place like home, there’s never been a better time to enjoy tech innovation from the comfort of your sofa or gesture control position. Iteratively adapting to new technologies that are genuinely helpful and useful is fast becoming second nature to this human/machine integration. Let’s just hope that the Skynet app never arrives (and the Terminator with it).

Not that we are blowing our own trumpet but we are very proud…

“The inclusion of boutique agency the7stars, which began life in a London pub just five years ago, on a shortlist of the UK’s best media agencies is testament to its creative flair.”

Campaign – Media Agency of the Year 2010

http://www.brandrepublic.com/features/1045317/Media-Agency-Year-PHD/?DCMP=ILC-SEARCH

Channel 4 are pushing boundaries this Christmas when it comes to TV ad break innovation, this time working with Microsoft to promote its Windows Phone 7 and Bing. Together, they have planned a series of ad stings to increase viewer engagement.  During the breaks for ‘Jamie’s Best Ever Christmas’ and ‘Come Dine With Me’, two mini stories will be told about a couple using Microsoft’s phone and search engine to solve last minute Christmas panics. The solution to each of these difficulties will in fact be the interspersing ads from brands such as Coty, Sainsbury’s, Southern Comfort and Ferrero Rocher.  Viewers will be encouraged to “stay tuned to see how Bing and Windows Phone help save Christmas.” Read more

Apple’s  reason for launching iAd is to help developers monetize their applications. Since most apps are either free or very low priced, developers are turning more and more to advertising to generate a return and keep their free apps free.

iAds – how it works Read more

Read more