Media Analysis: Ad-funded TV falls short of hype

Despite sky-high revenue projections, AFP has yet to prove its worth to brands or broadcasters.

There can be few brand communication opportunities that have been talked up quite as much as advertiser-funded programming (AFP).

AFP evangelists were at it again last week at the Edinburgh TV Festival, where big figures were being bandied about. US broadcaster Discovery Networks, we were told, expects to earn $1bn (£560m) a year from AFP, a third of its total revenue, within five years. In the UK, the Branded Content Marketing Association predicts AFP revenues will quadruple from £5m in 2003 to £22m in 2004.

Yet, a decade after its advent, there are still few AFP initiatives in the UK. Most have been consigned to the backwaters of the TV landscape on niche satellite channels with tiny audiences, or in the nether regions of the terrestrial channels' schedules.

Unrealistic expectations

In Edinburgh, independent TV producers gathered for an AFP workshop entitled 'How to Get Cash from Advertisers'. Its title says much about AFP, and the reasons why it has failed to capture the imagination either of brand owners or broadcasters. Though the platform was stacked with zealots preaching their faith in AFP, what the workshop unveiled was a sorry tale of brand owners' inflated expectations, poorly thought through communications strategies and even poorer programming executions.

Clients' inflated expectations stem largely from their exposure to AFP in the US, where product placement is the norm. In contrast, strict Ofcom rules outlaw even vague references to the client's brand. Thwarted in their ambition to integrate their brand into the programme, clients are left questioning what added value there is in AFP over and above the far cheaper option of programme sponsorship.

The truth is that the added value is impossible to measure. And if clients measure AFP on pure media value, it can never add up. It's a problem that AFP producers face all the time, according to Simon Wells, head of commercial development at Enteraction TV.

'If a programme costs £300,000 to make, but its media value is only £100,000, there is a huge added expense that is hard to justify,' he says.

AFP, he adds, can only work if it forms part of a 360-degree communications strategy that engages with the consumer on a number of levels and through different communications channels. Examples of such an approach are shows created around events, such as the Carling Homecoming and Lynx concerts, or Red Bull's Flugtag extreme sports event.

'The major stakeholder in the brand has to be at the hub of the decision,' adds Wells. 'Unfortunately, too often they are at the periphery. Someone says wouldn't it be nice to do and it gets pushed through.'

Primetime barrier

As yet, no AFP has made it into terrestrial TV primetime schedules. The Pepsi Chart Show, which aired in a 7pm slot on Five for four years until 2002, came closest. Many believe it is unlikely that AFP will ever achieve primetime status. It seems to work best when targeted at a narrow audience with common interests on a niche channel. Housewives watching daytime programming on the themes of homes and cooking are prime candidates.

The best-known of AFPs such as these is the Heinz-funded Dinner Doctors series that aired on Five. Its incorporation of baked beans, tinned macaroni and tomato ketchup into recipes for easy-to-prepare meals prompted an investigation by the Independent Television Commission (ITC). In clearing the programme, the ITC ruled that 'it came very close' to breaching its Programme Sponsorship Code and warned against brands attempting to extend the relationship any further.

None of the products featured in the programme carried Heinz branding.

It could be argued that since Heinz is the market leader in those foods, it was nonsensical not to feature its branded tins. Yet there is little appetite for any liberalisation of the rules. Rather, there is a unanimous view that to go down the US route of brazen product placement would be sheer folly.

Scheduling shortfall

The only way to engage with the more discriminating UK viewer and persuade broadcasters to accept AFPs onto their schedules is to produce high-quality programmes that can stand on their entertainment merit, according to Andy Bryant, creative services director at BBC Broadcast.

'AFPs are at a similar stage to the ad industry 30 years ago, when innovative agencies invented a form of advertising that was much more about entertainment than a direct sell,' says Bryant.

Of course, producing high-quality programmes requires big budgets, making AFPs even harder to justify. And even if they pass the quality threshold, clients face another hurdle in getting their AFPs scheduled.

There is a belief that the big broadcasters have an instinctive antipathy toward AFPs borne of a fear that their production cost represents marketing money that would otherwise have been spent on spot ads or sponsorships.

Gary Knight, ITV's head of sponsorship and branded content, admits that each AFP proposition is assessed as to whether it is merely diluting the client's spend on ITV or whether it will strengthen the relationship with that client. 'It is more appealing to us if clients seek a strategic relationship with ITV that involves spot ads and sponsorships as well as AFPs,' says Knight.

Yet broadcasters have to accept that, in an age of multi-channel viewer zapping and personal video recorders, advertisers will increasingly seek new ways to engage with viewers. Some predict that AFPs will soon be eclipsed.

'Brand owners now realise they can become media owners,' says Wells.

'Digital TV, broadband and retail outlets offer opportunities for branded channels with a far more comprehensive customer communication than AFPs.'

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