Culture minister Ben Bradshaw announced last week that he would lift the ban on all UK-produced TV shows on commercial stations, just three months after the government's Digital Britain strategy ruled out such a move.
Estimates for the extra advertising revenue varied between £70m and £100m, but advertisers were likely to shift spend away from conventional TV advertising, said Billetts analyst Mike Baker a sentiment echoed by brand analysts.
"In this era of Sky Plus, iPlayer and similar products, more of us simply don't watch TV adverts, so companies are changing their strategies," said Anna Eggleton, a director at The Value Engineers.
"Product placement won't work for everyone. Anyone needing to get across product information or build a new brand would struggle, but in categories such as soft drinks, which are based on image and brand recognition, product replacement could almost entirely replace TV ads."
The same could apply to alcohol and confectionery, she warned.
However, placement was not without risks, she added, as advertisers would need to be careful about the context in which their product was placed.
A spokesman for the ASA said product placement would fall under Ofcom's remit.
But rules on advertising food and drink to children were likely to be extended to cover product placement, even if regulated by a different body, according to an industry expert.