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Advertiser Funded Programming (AFP), means programmes created with the input of a brand – often financial but it can also be creative too. Branded content on the other hand, usually means programmes created by producers for a brand where the brand effectively acts as commissioner. Increasingly, the term “branded content” is used colloquially in the TV industry to mean either.
Crucially, AFP for traditional TV is where the brand buys into the existing editorial integrity of the programme and is looking to reach consumers by aligning with the programme’s existing values. As Jon Willers of The Development Network puts it, “branded content for Channel 4 must feel like something they would commission anyway”. In other words, the branding is complementary, or supplementary, to the story being told. Of course, there is branded content which starts with the brand and works backwards, but again, the final product isn’t intended to look and feel like an advert.
The key difference between AFP and sponsorship is that usually with AFP, there is a deeper relationship with the programme makers (the producer and broadcaster) and the programme itself. The Branded Content Marketing Association describes it as “any means by which an advertiser can have a deeper relationship with programming product beyond traditional media activity”. This definition requires a funding relationship with the programme or series that goes beyond sponsorship because the funding goes directly into production. Effectively, it is programming that wouldn’t exist without the brand partner. Sponsors, on the other hand, rely on the right programme being available, and only then are they able to secure sponsorship on it.
Typically, in AFP, brands do not take a share of the intellectual property rights in the programme as they perceive the value of the partnership to lie in the exposure and reach it provides for their brand. This is good news for producers as it leaves them free to exploit the format and the like, subject to any terms agreed with the broadcaster. However, this position may be changing, at least in the digital space, as brands get savvier to the potential upside in owning a share of the IP-pie. Some might even be interested in a share of net revenues from producers’ exploitation of the programme on the secondary market after the initial broadcast. With negotiations wide open, it’s all to play for. For public service broadcaster (PSB) deals, though, under the Terms of Trade, the producer must remain the owner of the IP in the shows (which means that certain brands who are entering the AFP space for the first time may need to have their expectations managed).
The BBC has historically shied away from any type of brand involvement in its shows, primarily due to restrictions on its funding and operational framework. The BBC is funded by the licence fee, which is public money provided by Parliament. It is prohibited from using these funds for services that are wholly or partly financed through advertisements, sponsorship, or other alternative funding methods, unless prior written approval is granted by the Secretary of State. This restriction ensures that the BBC remains independent and free from commercial influence, maintaining its public service remit. That being said, commercial arms of the BBC do engage in brand-funded content, like BBC StoryWorks which commissions branded content for the non-UK market.
The other PSBs however, have previously engaged in a fair level of AFPs, but the last few years has seen a huge rise as the climate for fully funding their shows remains challenging. A good example is Cooking With the Stars in partnership with Marks & Spencer; DNA Journey with Ancestry; and John and Lisa Down-Under with Trailfinders.
However, the PSBs fall under the jurisdiction of Ofcom, meaning any branded-funded content they show needs to comply with the Ofcom Broadcasting Code (the Ofcom Code).
PRODUCT PLACEMENT UNDER THE OFCOM CODE
Product placement involves the inclusion of a product, service or trade mark within a programme in return for payment or other consideration.
Product placement is permitted in certain types of programmes, such as films, TV series’, entertainment shows, and sports programmes, provided it complies with the rules set out in Section 9 of the Ofcom Code. These rules require that product placement does not compromise editorial independence, is not unduly promotional and is clearly signalled to viewers through a universal product placement logo displayed at the start, end and after advertising breaks in the programme. This means that whilst certain brands may want to have control over how their products are featured in content, the extent to which they can do so is limited under the Ofcom Code meaning their expectations need to be managed accordingly.
SPONSORSHIP UNDER THE OFCOM CODE
Under the Ofcom Code, the sponsor may not influence the editorial content of the programme. The sponsorship must be clearly identified and there must be a clear distinction between editorial content and advertising to maintain transparency and consumer protection. Whilst we said above that AFP and sponsorship are not the same, the sponsorship rules in the Ofcom Code may well still apply to brand-funded content.
SO, WHAT DOES THIS MEAN?
In short, setting aside the BBC (which is subject to additional restrictions) branded content for the PSBs is permitted provided producers successfully navigate and adhere to the standards and transparency requirements of the Ofcom Code.
For the PSBs’ digital offerings, like Channel 4, BBC iPlayer and ITVX, the regulatory landscape is currently different than for their PSB main channel counterparts, as the Ofcom Code itself does not apply. The same is true for streamers like Netflix and Amazon Prime. Instead, VOD services are currently regulated by the ODPS (On-Demand Programme Services) Rules which impose alternative broadcast standards. Whilst the ODPS Rules on sponsorship and product placement are broadly similar to the Ofcom Code, they are slightly lighter with regards to how VOD services are allowed to implement them. For example, under the Ofcom Code, product placement must be editorially justified and signalled with a ‘PP’ logo. That being said, the ODPS Rules for signalling requirements must only ensure that viewers are adequately informed about product placement – there is no strict format requirement. This means an ODPS would be able to use its end credits to disclose a promotional consideration.
The Media Act 2024, now in force, gave Ofcom the power to create a new Ofcom code which will apply to Tier 1 Video On-Demand (VOD) services (the VOD Code), This would cover the PSBs’ VOD offerings as well as independent streaming services like Netflix, Amazon Prime and Disney+ etc. Will this tighten up the rules on branded content in the online space? Based on current thinking, the new Ofcom code will not focus on these areas meaning ODPS will continue to be governed by the existing ODPS Rules.
YouTube is the home of long-form branded content; Instagram and TikTok are the home of short-form branded content and clips. Brands and producers make use of all of them as part of a cohesive, multi-platform branded strategy.
Crucially, none of the above Ofcom or ODPS Rules currently apply to YouTube, TikTok or Instagram. A recent Government announcement has confirmed that video-sharing platforms like YouTube, will not in and of themselves be designated as Tier 1 VOD (though some individual channels on YouTube with a high number of subscribers, like the PSB’s own YouTube channels, may be caught).
Instead, branded content on these types of platforms is subject to the CAP Code. This is a separate set of rules governed by the Advertising Standards Authority which states that, where a brand has editorial control, there must be clear labelling to allow viewers to easily recognise the content as an advert, and messages should not be conveyed surreptitiously. On social media sites, influencers must use clear labels like “#ad” to ensure transparency where they are posting a brand-funded video.
Branded Content shows no sign of waning. Whilst the regulatory landscape continues to evolve, producers, broadcasters and brands remain set on navigating the rules and reaping the benefits that collaboration between traditional TV indies and brands can bring.
We are experts in advising on both sides of the fence as well as advising on deals with broadcasters where there is brand involvement. Our advice ranges from deal-making and structuring, contract drafting, negotiation and advice on the regulatory regime. If you are a TV production company, agency or a brand working on a branded content or AFP project, please get in touch.
Clare advises on a broad range of commercial and IP matters across the film, TV and theatre industries, including the development, production, financing and distribution of film, TV and theatre projects and the acquisition, protection and exploitation of rights/IP and content.
Clare works with clients of all sizes and types within the film, TV and theatre sectors, from individual producers, talent and small independent production companies, to major SVODs, high profile production companies, studios, and content financiers. Clare also specialises in advising rightsholders who wish to protect and exploit their IP and rights. Clare works across all genres of film and television, including scripted, unscripted and animation, as well as newer areas such as digital exploitation, branded content and the convergence between traditional TV and content creators.
Clare is described in listed as a ‘Key Lawyer’ and described as ‘a key contact for independent producers and rights holders’ and ‘a pleasure to work with. Fantastic attention to detail and very responsive to client requests. Runs matters efficiently and inspires confidence in her clients’. Clare has also been ranked as a ‘Rising Star’.
Clare presents at numerous industry events, including BAFTA Elevate and Indielab and regularly runs legal sessions for Pact members.
Sacha advises clients from a variety of sectors, including some of the world’s best known brands, agencies and platforms. He is ranked for advertising and digital media in both The Legal 500 and Chambers and Partners and is recognised as one of the UK’s leading advertising lawyers.
Sacha advises on a range of commercial transactions and has particular expertise in advertising-related agreements (such as creative agency, media planning and buying, production and brand partnerships). He is particularly well known for his expertise in digital marketing and adtech.
Sacha also has expertise in general advertising compliance (including prize promotions, native advertising and influencer marketing) as well as ecommerce and online consumer regulations.
Sacha also works within the firm’s retail and technology practices and regularly advises well-known retail brands on a range of retail-focused commercial agreements including distribution, licensing, and franchise agreements, as well as clients across a range of industries on tech focused agreements such as software development, SaaS, and IT services contracts.
In relation to data privacy, Sacha has advised on all the key compliance areas, and has worked with a large number of clients on their data protection compliance programmes. He has particular expertise in the data privacy aspects of marketing, adtech and digital media. He frequently advises on the compliance aspects of adtech vendor arrangements, programmatic advertising, and mobile apps.
Sacha also has expertise in the legal issues associated with AI, particularly in the context of advertising and marketing. He regularly advises clients on the privacy, IP, contractual and regulatory issues associated with the use and deployment of AI for a range of purposes in the advertising and marketing industries.
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