Product Placement Scrutinized

Feb 3, 2008  •  Post A Comment

A majority of the five members of the Federal Communications Commission has approved a plan to rewrite disclosure rules for product placement on TV, throwing some uncertainty into a fast-growing area of TV advertising.
Final announcement that the agency will launch a formal rule-making is awaiting the vote of Commissioners Robert McDowell and Deborah Taylor Tate. The FCC had been expected to vote in December on the proposal, but delayed a vote because it had too much on its meeting agenda.
While the proposal calls for rewriting existing rules, it’s not likely to offer any specific suggestions and is expected to seek comment about what should be changed.
Commercial Alert, the watchdog consumer group that first asked both the FCC and the Federal Trade Commission to examine product placement, has requested that media companies be forced to disclose placement at the instant a product is seen.
Product placement as a form of TV advertising has been increasing because of advertiser concerns that viewers are switching from watching live airings of shows to recording programs on digital video recorders for later viewing and fast-forwarding through traditional ads. Integrating products into a show’s content ensures viewers see the products.
A recent study by PQ Media said spending on product placement on TV topped $941 million in 2005, up 70.5% from 2004.
Advertising groups and media companies have strongly opposed the FCC moving ahead with any rewrite of current disclosure rules, arguing that there is no evidence consumers are hurt or misled when they see a product in a show.
The Advertising Coalition, in two letters to FCC commissioners, argued that any decision to rewrite rules puts the cart before the horse by moving forward with a rules change before there is evidence that viewers are either confused or misled by current practices.
“The question that is raised is what incident of product placement led to this,” said Jim Davidson, executive director of the Advertising Coalition. “Normally when you see rule-makings, it’s based on a number of hearings that have established the need for it. We don’t see the evidence” that any need has been established.
Mr. Davidson and officials of advertising groups note the FTC rejected a similar request for action, finding there was little evidence of confusion and saying that individual cases could be handled with enforcement actions.
Some consumer groups and legislators take a different view.
Robert Weissman, managing director of Commercial Alert, which is out to limit commercial infringement into media and society, said one of the group’s concerns is “the ability through product placement to convey an advertising message without a viewer being aware they are marketed to.”
Last year U.S. Reps. Henry Waxman, D-Calif., and Ed Markey, D-Mass., also suggested the FCC might need to act, warning that product placement is increasingly “blurring” the lines between content and advertising, leaving viewers without any certainty on whether they are seeing commercial messages. Mr. Waxman heads the House Oversight & Government Reform Committee; Mr. Markey heads the House Energy & Commerce Committee’s telecommunications subcommittee.

13 Comments

  1. The people who claim that there is no evidence that product placement has an impact on the audience are the same people who claim, when need be, that advertising does not move the pubic.
    If product placement did not achieve its goal, as conventional advertising does, no one would pay the billions they do.

  2. Without business to support entertainment, it will not exist. As DVRs (Digital Video Recorders) and viewing online become prevelant, the consumer can watch their favorite programs without any commercials. So how will these productions be funded? It is true now that if a program does not have sponsors, it will not survive.
    Why does government care about regulating product placement, when they buy millions of dollars in advertising themselves when it comes to time to time for them to run for office?

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