Coalition Calls on FCC To Crack Down on Product Placement

Says the FCC needs to act on its notice of inquiry into how its sponsorship identification rules apply to embedded advertising

By John Eggerton -- Broadcasting & Cable, 9/24/2009 3:20:20 PM

A coalition of 50 groups including Consumers Union and the American Academy of Pediatrics has called on the FCC to crack down on product placement.
 
In a letter to FCC Chairman Julius Genachowski sporting 50 signatures, the groups, calling themselves the Fairness and Integrity in Telecommunications Media, said the FCC needs to act on its notice of inquiry into how its sponsorship identification rules apply, and should apply, to embedded advertising.
 
The FCC has not taken any action and the reply comment period on the proceeding closed last November.
 
The coalition argues that current broadcast sponsorship ID are ineffective because they are confusingly worried or buried at the end of the show, while cable networks, unless local origination channels, are not subject to the sponsorship rules at all.
 
The issue was a big one for Commissioner Jonathan Adelstein, but he has moved on to the Agriculture Department.
 
The FCC is currently reviewing all its kids TV rules in the digital age, and the coalition points out that kids are "particularly vulnerable to covert marketing." They encouraged the FCC to codify that embedded advertising in kids rules is prohibited. There are already host-selling rules that prevent in-show plugs because they automatically
render the show a program-length commercial in violation of kids TV ad limits.
 
Not mincing any words, the coalition said they could document "growing disregard for public health and broadcasting ethics in an industry that has embraced ‘payola’ as a business model."
 
The groups point out that the Federal Trade Commission supports disclosure in online embedded advertising practices, and that the FCC should exercise its authority to amend or extend the rules to protect both kids
and adults from what they called "stealth and misleading commercial propaganda."
 
"We agree that the FCC should act," said Dan Jaffee, EVP, government relations, for the Association of National Advertisers. "We believe they should act by rejecting the consumer group's demand that the it impose substantilly inceased restrictions in regard to product placement."
 
Jaffee says the current rules already cover the issue. "The FCC right now requires that any product placement be disclosed either at the beginning or the end of the program, and that is certainly sufficient," he says.
 
"The suggestions that there should be a crawl or pop-up whenever prodcut placement is put forward is not only terribly disruptive of the TV experience," he says, "but it is almost certainly an unconstitutional requirement as more extensive than necessary."
 
The FCC in June 2008 unanmously proposed mandating that on-screen disclosures of product sponsorships be a certain size and duration, as is the case now with the disclosures of sponsors of political ads. It also pondered extending product-integration rules to cable and removing a waiver for identification of plugs used in feature films aired on TV.
 
Currently, the FCC only requires that the sponsorship ID appear once during a show and remain on long enough to be heard or read by the average viewer.
 
The FCC said it was proposing changes to its 70-plus-year-old sponsorship-identification rules to reflect the rise of video-news releases, product placement and product integration.
 
It was almost a year ago to the day (Sept. 23, acutally) that the broadcast networks got together to oppose the changes under their own coalition, the National Media Providers.
 
They argued that the FCC lacks jurisdiction in one case and justification in all cases, and that, legally speaking, product placement isn't even advertising but more akin to the sponsorship IDs in noncommercial shows.
 
They also said that product integration was integral to the survival of ad-supported media, and that was only days after the financial meltdown and before it was clear just how far down it was going to melt.
 
The National Media Providers opposing the changes include Fox, ABC (Disney), CBS, NBC, Viacom, Discovery Communications, LIN TV, Journal Broadcast Group, Citadel Communications, Entercom Communications, the Motion Picture Association of America, the ANA, the American Association of Advertising Agencies and the American Advertising Federation.