Product Placement Disclosure Dispute Heads Toward Deadline at FCC

By Ira Teinowitz

An advertising group, TV networks and TV news directors are urging the Federal Communications Commission not to increase TV sponsorship and placement disclosures. Consumer groups, meanwhile, want the agency to make the disclosures more prominent.

The dueling views are showcased today in final comments to the FCC as the agency considers rewriting its disclosure guidelines, amidst some complaints that the current requirements don’t go far enough.

The concerns about disclosure aren’t only affecting the FCC. The Federal Trade Commission on Friday offered a proposal to require advertisers using endorsers to have objective justification for claims the endorsers make in an ad.

The FCC generally requires placement be disclosed in “clear and conspicuous language” but doesn’t specify either the amount of time the language should be visible or how big the type should be. TV networks and TV shows usually make the disclosure in a program’s closing credits, sometimes in small type that is often cut down or squeezed with promos inserted for other shows or for local news.

Consumer groups, among them Commercial Alert, have complained about increasing product placement as advertisers try to find new ways to advertise in order to offset the impact of commercial-skipping technology in digital video recorders. The groups have said the increased placement demands higher disclosure standards.

They also have complained disclosure of placement can now come long after a product is seen. Some of the groups have urged the FCC to require disclosure at the moment a product is seen on screen.

The consumer groups have found some support for tougher standards from FCC Chairman Kevin Martin and Commissioner Jonathan Adelstein.

In today’s comments, the advertisers, networks and news directors argued against boosting standards.

The Association of National Advertisers, which represents major advertisers, said the current FCC guides provide “useful and meaningful criteria” for compliance and additional steps are “not warranted.”

In its comments, Disney took a similar tone.

“No additional regulation or product placement or sponsorship identification is warranted,” it said, adding a warning that additional disclosures would interrupt the viewing experience and be duplicative. Disney also warned that product placement is one way to deal with the challenges of increasing DVR penetration.

“Given the rising costs of program productions and increasing DVR penetration, product placement offers an opportunity for all parties involved to recoup some programming costs … in the face of a changing marketplace,” Disney said.

The Radio-Television News Directors Association’s concern was about identification of video news releases and suggestions that any content from them be immediately identified.

The group suggested proponents of increased disclosure were offering “tired arguments” that “appear motivated by a singular distaste of all things commercial” and warnings of “calamitous risks to our society.” It said the government shouldn’t be inserting itself into broadcast newsrooms.