The recent news that Channel 4 had purchased the Great British Bake off, from the incumbent BBC has created considerable controversy,

We decided to take a look at the value Channel4 may derive from the series for which it seems is commonly reported they will pay £25 million pounds per year across 3 years.

We decided to take a look at the likely value of the show based on our very accurate information on programme value, used by major studios, we took a look at the likely value the show would have for Channel4. Obviously on the BBC, Bake Off does not need to earn its way in terms of advertising revenues, however for Channel4 to demonstrate that they made a valued purchase they will need to reach a large audience.

The ten-part main competition has an astonishing audience and delivers ratings more than twice the level of even the most popular Channel 4 popular fact based programmes. Using our systems, we looked at the advertising revenue for top Channel 4 shows and adjusted for the increased audience and our estimate is that Channel 4 would earn £1.5 million per episode at net net rates from advertising.

There are of course additional programmes in the Bake Off mix, including in order of popularity Great Comic Relief Bake Off, Extra Slice, Masterclass and Junior. However these generate a fraction of the audience and will not alone make the show profitable for Channel 4.

Clearly there are additional opportunities for Channel 4 that were not available to the BBC. A creative sponsorship deal with a major retailer is the most obvious along with adding episodes to the main run. Both look to be a necessary part of Channel 4’s Bake Off if the franchise is to retain viewers and remain successful.  The enhancing and building up of the spin offs will help make the franchise more successful, longer running and profitable.

There is also a downside risk, it looks very unlikely that the BBC will leave the baking space alone and they should have access to most of the current presenters. Audiences may not transfer in their   entirety to Channel 4 as whatever the format may be they will be subject to a few commercial breaks per show. Indeed, the format may have already peaked at the BBC with some great personable winners and may be in decline.

Whatever else if the reported purchase price is correct, the BBC will be creatively thinking about is riposte, and Channel 4 will need to apply some serious commercial and creative thinking to pay dirt.

Over the coming weeks the UK will see a further highly competitive auction round of the rights to the Premier League. With the value of sport (and particularly) football as a driver of pay TV subscriptions, and the focus of major telecom and pay TV operators on providing complete packages to consumers, it seems highly likely that the final prices generated will see a further substantial increase to the cost of rights.

Over the last decade this flow of increasing cost has also affected the sponsorship rights paid by consumer companies for sport. Despite on and off the pitch sport often generating headlines which are at least uncomfortable in not incompatible with sponsors own corporate ethics and aims, the bandwagon has continued to grow.

Yet as a result of the increasing movement of sport behind paywalls the actual visibility provided for sponsors has and continues to shrink. As a category it long ago shrunk well below 10% of total viewing, even for the male and young demographics who find broadcast audiences difficult to find.

Maybe because it is an easy investment for the international head offices of advertisers and their communication advisors, it makes for easier top down decisions than using the other 90% of broadcast to get their message across. Yet feature films, dramas and factual programmes offer significant on screen opportunities often at a fraction of the cost of sport. The process and decision making are undoubtedly more complicated but in general broadcast regulations now allow good placement.

More advertisers should look across their communication investment at the cost versus exposure using common metrics to understand the number of people impacted and the frequency/ associations of the messages. Many would find significant surpises.

There’s been much discussion recently about the UK Placement market, which is generally reported as having got off to a slower start than expected.

Intelligent, strategic placement which will work for both brands and programmes involves many disciplines and skill-sets which hitherto have not had to come together in pursuit of a common goal. Placement’s slow growth is partly because participants have found this a little frightening, and can too-easily be placed into the “too-difficult” box.

To help address this, Madigan Cluff, the Pinewood based agency specialising in the planning and auditing of placement, have launched a UK first – a half-day seminar that covers how best to take advantage of this new media opportunity, which is a $5 billion dollar market in the United States.

With tailored versions aimed at production companies and brand owners (and their advisors), the seminar is called Best Practice in Brand Placement.

After an introductory market update, the session covers key issues, such as:

• How can we learn from the success of placement in other, more mature marketplaces?
• How can we match our objectives with appropriate programming that will be of interest to commissioning broadcasters?
• How can we deploy professional research techniques to deliver the perfect offer for our brand-owners?
• And how do we then develop beyond the traditional broadcast piece (e.g. into online/promotional iterations)?
• How can we make the money value equation work for all parties?
• What do we have to do as an organisation to make best use of placement?
• And how can we be sure that we are pursuing placement in a way that makes best commercial sense for all the parties involved?

Michael Cluff, partner at Madigan Cluff, said:

“In the not too distant future, placement will grow to be as important a part of the marketing mix as it is in the USA. British programming is the second most exported worldwide after the US, and unlike advertising placements go wherever programmes are transmitted. To date neither programme makers nor advertisers have created big opportunities – we believe our expertise can help bridge the gap – and give people the knowledge and experience to get started.”

“Hence this seminar. Which is designed to address precisely that. It’s informative, it’s solution orientated, and it’s fun. What’s not to like?!”

Relative newcomer Money Drop was the top format title by value created in 2012; pushing Come Dine With Me into second place, according to a new 172-page report that covers 16 territories. The TV Formats in Europe report using Madigan Cluff data further states that The Voice entered the top 10 in 2012. Who Wants to Be a Millionaire was the top title in both 2009 and 2010, but had dropped to ninth in 2012.

Read the full press release (pdf)

Read the full document (pdf)

By combining three major databases Pinewood Studios based NMG Product Placement, Essential Television Statistics and Madigan Cluff have been able to take a look at the additional value created for advertisers with international brands placed into UK programmes. Taking a sample of recent placements in UK dramas this unique process shows that advertisers frequently achieve as much value from the overseas export versions of the programme as they have received from the original UK transmission.

Many UK TV programmes are extensively exported. When TV programmes are exported sponsorship rights and the content of advertising breaks may change. However, brands embedded in the programme will remain and be seen whenever, and wherever, the show plays.

For international brands placed in UK drama this can effectively double the communication value of the placement

This unique process combines NMG’s Tracker™ database detailing which brands have appeared in specified episodes of programmes, with ETS’s database which tracks when these episodes are played in more than 40 countries worldwide, together with Madigan Cluff’s database which values each overseas transmission.

Read the full document (pdf)

The attached PDF is the Madigan Cluff autumn update on changes influencing how brands interact with programmes transmitted around the world. This edition features:-

• Why football is more local than global.
• Edging into the spotlight – how Product Placement is slowly rolling out in Europe.
• How the $6 billion market for imported drama in Europe is holding steady.
• The influence of brands looks at reaction to brands in and around Celebrity Big Brother?

If you are interested in further information on any of the articles please feel free to contact us at info@madigancluff.com

Read the full newsletter (pdf)

After extensive research work we are pleased to announce that our report on the legalisation, initial selling, broadcast and measurement of product placement in major European markets has now published in partnership with Screen Digest.

Copies of the report can be obtained from Screen Digest (www.screendigest.com) at a cost of £995.

Read details of the report (pdf)

More and more Broadcasters and Production Companies are waking up to the potential to showcase brands in their programmes.

But it’s all a bit of a maze for brand-owners.

Who to go to for advice? What’s right for my brand? How much should I be paying? How to measure?

Madigan Cluff is the UK’s leading media consultancy specialising in placement.

To meet brandowners’ needs, we have launched a unique product, the Madigan Cluff Product Placement Review.

We take a brief for you. Go away and do our work. Then deliver:

• A comprehensive Market Update
• Best Value Guidance
• A Tailored Competitive Analysis
• An Opportunity Analysis for your brand
• And finally – a draft Action Plan

It’s highly affordable, in cost terms. But it could be absolutely priceless.

For more information contact peter@madigancluff.com