Brits favour product ads if they get cheaper TV content

Six out of 10 British viewers say they will welcome product placement if it means free content or cheaper premium television, with experts predicting the advertising could be worth more than £100m as the economy recovers.

The findings from YouGov and Deloitte, just months before the rules are set to be relaxed, are positive for an industry that is desperately trying to boost revenues after being hit by the recession, a fall in advertising spending and a fragmenting market.

While only a quarter of viewers aged 55 or over would accept product placement, there was much more traction among younger viewers, and it was backed by seven out of 10 among 18 to 24-year-olds. Paul Lee, media director at Deloitte, said, "There already is a widespread pragmatic understanding of the trade-off between advertising, in all forms, and the funding of content" among the public. He added: "Indeed if the economic outlook were to weaken, the public may even urge greater quantities of product placement, if this meant cheaper quality television."

While two-fifths of those polled found product placement annoying, 72 per cent watch programmes regardless of whether such advertising was in it.

Among younger viewers, 81 per cent of 18 to 24-year-olds were willing to watch programmes with product placement. Only 5 per cent would avoid such programmes altogether. YouGov found that even in the current era of prop placement – where shows can use donated products if they fit with the context – 41 per cent of respondents said they had had occasionally purchased a product having seen it on TV.

The European Union approved plans to loosen product placement rules in 2007. The UK's media regulator, Ofcom, is still consulting on the issue, and is expected to give the go-ahead for next year.

Legislation allowing the relaxation of the broadcasting code came into force in April. While product placement will be allowed in film, drama, sports and light entertainment, it will be banned in children's, religious and current affairs programmes.

First-year revenues from product placement on TV are expected to be in the "low tens of millions," according to Deloitte, but they believe it could add as much as £140m a year as the rules are relaxed and the economy recovers. That would represent about 4 per cent of current advertising revenues, which are expected to total £3.25bn for 2010.