FCC to Review Product Placement Rules

24 June 2008

WASHINGTON DC: US media watchdog, the Federal Communications Commission is planning to crack down on what it views as product placement by stealth.

The watchdog is mulling new rules that will require broadcasters and television program makers to make it much clearer that a marketer has paid to include their product within a show.

The FCC is quick to point out it is not planning to ban the practice nor any other embedded ads used by marketers to reach commercial-skipping DVR viewers.

Nonetheless, it wants consumers to know who is pitching to them and what is being sold. Current rules demand disclosure only at the end of a show

Says commissioner Jonathan Adelstein: "You shouldn't need a magnifying glass to know who's pitching you. A crawl at the end of the show shrunk down so small the human eye can't read it isn't really in the spirit of the law."

The watchdog will look at whether TV shows should include notices similar to those that political candidates must say before or after campaign ads.

In addition, it will investigate if embedded ads violate rules on children's programming, which require a few-seconds' break in between the show and a commercial.

Commissioners will examine the need for product-placement rules to be extended to cover cable programmers, which are currently exempt.

Product placements on broadcast TV shows rose almost 40% in the first quarter from the year-earlier period, according to The Nielsen Company. Reality shows such as American Idol had most placements.

Researcher PQ Media claims US paid product-placement spending increased 33.7% to $2.90 billion (€1.86bn; £1.47bn) in 2007 from a year earlier. The US leads the world in the practice by a significant margin.

Comments Dan Jaffe, evp of government relations at the Association of National Advertisers: "The FCC has already taken some significant actions in this area. If you pay for placement of a product in a program, you have to clearly and conspicuously make that evident."

Data sourced from Wall Street Journal Online; additional content by WARC staff