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FCC Considers Product
Placement Rules for TV
Matthew
Lasar
Ars Technica
September 28, 2008
As the filings stream in during the Federal
Communications Commission's proceeding on what to do
about embedded advertising, one thing is clear: you are
either for a crackdown on the practice or against one.
If you are a public health or consumer advocacy group,
you belong to the first category. If you speak for the
media companies and broadcasters, you are firmly
ensconced in the second.
One side sees embedded ads as an intrusive, dishonest,
and unhealthy innovation. The other sees product
placement as the new foundation of the media's economic
well being. It is really that simple.
Pop ups and scrolls
As Ars has reported, the FCC is currently running a
comment cycle on whether to make it more obvious to TV
watchers that some of their favorite shows are stuffed
with embedded ads. According to Nielsen, American Idol
logged a impressive 4,636 product placement shots during
the first half of this year.
Groups like Commercial Alert want "simultaneous
disclosure" of embedded placements. "Product placement
advertisements should be disclosed at the time they
occur," the group writes in its latest FCC filing, "with
the word 'advertisement' appearing on screen during the
airing of a product placement." A pop up window would do
the job, the organization suggests.
To skeptics who argue that most people know a product
placement when they see one, Commercial Alert responds
that it is just not true. The advertising industry likes
embedded ads, they charge, precisely because TV viewers
don't mentally filter them out like commercials.
Placements often portray what consumers see as an
"authentic use of a product," the group contends, unlike
a conventional ad.
The filing argues that couch potatoes rarely watch
credit scrolls at the end of shows, when TV programs
acknowledge various companies for the Big Gulp sodas,
designer clothes, laptop computers, candy bars, video
games, that populate most episodes. And toddlers
wouldn't know what the scrolls meant even if they did
watch them.
Commercial Alert concedes that a simul-disclosure rule
might "reduce the number of hidden advertisements on
TV." But this triggers no First Amendment concerns, the
group argues, because "the viability of this category of
ads, by definition, depends on deception."
Why does Commercial Alert think this issue is so
important? The question goes beyond the harmful effects
of the many junk food products hawked on TV. There need
to be some places in civil society where no one will try
to "dangle an ad in front of our eyes" every minute of
the day, says the group, particularly in schools, health
care, and government. "We fight for the right to be let
alone," they write.
Not that consumer advocates aren't worried about what
they see as the immediate dangers of embedded ads. The
filing of the Marin Institute charges that product
placement encourages alcohol abuse. The Children's Media
Policy Coalition warns that embedded ads worsen
toddlers' "inability to distinguish commercials from
programming, and makes it more difficult for them to
discern persuasive content." The steady stream of
advertising directed at children is a "proven factor" in
the childhood obesity phenomenon, says the Campaign for
a Commercial Free Childhood's 25-page filing. It also
helps cause "eating disorders, precocious sexuality,
youth violence, and family stress and can contribute to
children's diminished capability to play creatively,"
the non-profit says.
And the San Francisco Department of Public Health argues
that embedded ads for pharmaceutical drugs allows
advertisers to skirt disclosure rules included in
conventional ads. "Prescription drug product placements
do not provide consumers adequate information about drug
side effects, therapeutic alternatives, efficacy, and
costs," the agency writes.
Needless to say, the media industry sees the matter
differently.
Blame it on TiVo
Many of these groups charge that embedded ads simply
respond to the DVR/TiVo phenomenon. Consumers now record
and fast forward past conventional commercials, they
say, so the ad agencies promote product placement as a
workaround strategy.
The broadcast industry does not dispute this, it only
challenges the claim that something is wrong with the
response. The "TiVo effect," the National Association of
Broadcasters' filing observes, "has required programmers
and stations to address legitimate demands from
advertisers that are growing increasingly concerned that
the classic 30-second television spot is being skipped
by viewers."
Commercial radio and television depend on advertising
for their survival, NAB warns. If advertising revenue
slips even a small amount, "the free broadcasting model
may be in jeopardy, particularly in today's highly
competitive media marketplace." Crucial services like
local programming, news, and emergency announcements
could suffer as a result. "While changes to the
sponsorship identification rules are designed ostensibly
to help the public interest, the real world effect could
be the opposite."
Ditto, says the Motion Picture Association of America,
which wants the FCC not to apply more stringent product
placement rules to televised movies. MPAA calls product
placement and integration "key tools that help to offset
rising production and marketing costs, providing
critical support to the film industry." The National
Cable and Telecommunications Association asks the FCC
not to interfere with the "evolving programming
marketplace." Regulating product placement could have
"adverse collateral effects," NCTA warns, such as higher
subscription fees for consumers.
A joint filing by eighteen top media companies and trade
associations puts the matter even more bluntly.
Consumers now have a wide variety of broadcast media
platforms "that provide users substantially greater
control over how, where, and when they view or hear
their selections," they write.
The result? The "traditional 15- or 30-second
advertising spot is in jeopardy." Solutions? The comment
describes product placement as "an essential adjustment
in the form of commercial support needed to preserve
ad-supported media in the face of increasing competition
and technological change."
The statement comes CBS, Fox Entertainment, Entercom,
NBC Universal, Viacom, the Disney Company, the MPAA, the
American Advertising Federation, and ten other parties.
All these commentaries grapple with the complex
questions swirling around the product placement
regulation issue. Does the FCC have statutory authority
to make new rules? Does the First Amendment restrain the
agency's hand? Does the Children's Television Act
already guard children's TV shows against embedded
advertising?
But beyond these concerns, a prominent divide on the
issue stands out. Consumer advocates see product
placement as a clear and present harm to civil society.
Big media sees it as the future.
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