Product-Placement Peril?

-By John Consoli and Todd Shields

Media buyers are opposed to a petition filed last week with the Federal Communications Commission by consumer watchdog group Commercial Alert that calls for the agency to require TV networks to "prominently disclose" product placement in their shows.

Commercial Alert, founded by consumer advocate Ralph Nader, said in its petition that "pretending that this is just [part of] ordinary programming rather than paid ads...is an affront to basic honesty."

Honest or not, buyers claim the disclosures proposed could end product placement as an advertising option for clients. "It would diminish the very reason why we do product placement deals--to integrate products into a show without calling attention to them as commercials," said one media buyer, who spoke on condition of anonymity.

Laura Caraccioli-Davis, vp/director of Starcom MediaVest Group Entertainment, said, "It's unrealistic to say, 'Look here, product placement.' It should be disclosed at the end, as it is in [CBS?] Survivor." She added, "If you told people that a Survivor or American Idol [on Fox] might go away without embedded advertising, the 18-24 [demo] group might say, 'I don't mind seeing Ford or Coke there.'"

Commercial Alert director Gary Ruskin said the argument against product placement follows the same lines pursued by his group in a 2001 complaint that led to the Federal Trade Commission warning Internet search engines about including undisclosed ad messages in the search results produced for users. While the FTC's Bureau of Consumer Protection did not recommend formal action against the search engines, it warned them about "the need for clear and conspicuous disclosures of the paid placement [of ads]."

Broadcast networks are now obligated to disclose at the end of each show any "promotional considerations," but those are usually found in game shows, when advertisers donate the prizes, or on talk shows, when specific hotels or car services are used.

"[Advertisers] must not pretend that their ads are something else. The [FTC] has invoked this principle many times in banning unfair or deceptive acts," said Ruskin.

Placing screen crawls when a paid product placement is actually on screen would be a major shift in the TV viewing environment, but buyers and network executives were skeptical that the FCC would require that. "Personally, I think it will be much ado about nothing," said one network sales executive.

Commercial Alert has also asked the FTC to investigate the six broadcast networks regarding possible violation of the Communications Act for failing to comply with sponsorship identification requirements.

Neither the FCC nor FTC last week had turned their attentions to the petitions.