First, the advertisers gave us their messages during ‘commercial breaks’. Then, as we started to ignore them, they began to sponsor the programmes on TV. Now, in a European first, Audi has begun its own sponsored channel. This is a welcome move.
For one thing, it’s transparently honest. You know where The Audi Channel is coming from. Second, it recognises the failure of the hard sell and the need for softer brand communications (public relations fits in here). Third, it’s free (unlike those supermarket magazines that attempt something similar in print format). Ironically, it will also remain almost advertising-free because this niche channel is unlikely to appeal to many other commercial interests. Fourth, it promises to fill some gaps in the broadcasting schedule. (Polo isn’t everyone’s favourite sport – but it must be of interest to some and the BBC isn’t going to cover it.)
Of course, a broadcast medium lacks interactivity and so doesn’t meet the challenge of establishing a conversation between an organisation and its publics. But – dare I say it here – broadcast technology is still years ahead of the internet in terms of quality, usability and reliability. Above all, the trend I noticed in the US two decades ago is now firmly established in Europe. Broadcasting it overtaking publishing. Watch this space (Channel 259 on Sky Digital).
PR Studies 
Not really a comment to your post, but I was watching a popular UK soap last week and one character asked another what they wanted for breakfast and the other character replied “Marmite”.
I thought this was a little strange as Marmite is a brand. If the character had replied with jam then that could have meant any brand of jam.
Surely this is a type of product placement? Not that I’m an advertising (or PR!) expert but it did seem strange.
Quite right. Product placement has grown as another more surreptitious way for the advertiser to promote products. What’s interesting for us is that it becomes harder to distinguish between what’s advertising and what’s public relations.
David Phillips picks this up this theme and adds some context at LeverWealth (http://leverwealth.blogspot.com/2005/10/opensource-value-relationship-media.html).