Product Placement on Television

1. Product Placement on Television

2. Commercial Alert’s Request to the FTC and FCC for Guidelines to Require Disclosure of TV Product Placement

3. “…keep the commercial culture within its proper sphere, and prevent it from exploiting children and subverting the higher values of family, community, environmental integrity and democracy.”

4. “Put simply, TV networks and stations are shifting advertising from commercial breaks to programming itself. They are inserting branded products directly into programs, in exchange for substantial fees or other consideration.”

5. Remote controls and TiVo enable viewers to avoid ads • A substantial majority of viewers are • fed up with advertising generally and on television in particular • Looking for ways to avoid ads • Advertisers find embedded ads effective because viewers are caught off guard

6. Some programs so packed with placements they resemble infomercials • But lack disclosure requirements of infomercials • Particularly problematic where children are involved • Children more vulnerable to this influence • Are they “program length commercials”?

7. Product integration • “a presence woven into the plotline—often across multiple episodes—accompanied at the very least by a supporting medial buy and, at best, by an integrated marketing and public relations campaign replete with a sweepstakes overlay and other consumer touchpoints”

8. Examples • CBS: Survivor • GM, Reebok, Target • Fox: American Idol • Ford, Coca Cola • ABC: Who Wants to be a Millionaire • AT&T

9. CSI Miami • Extreme Makeover Home Edition • The Apprentice • Oprah Winfrey

10. Product placement is growing • Nielsen Media Research and Advertising age track placements • Approaching $1 billion in revenue • Survey by Association of National Advertisers indicated 63% took part in “branded entertainment” • Networks planning shows that eliminate traditional commercials altogether

11. Product placement works • Reece’s Pieces/ET • 65% • RayBan/Risky Business • Tripled in one month • “Successful product placements are more effective than ads at generating recall, promoting brand awareness and ultimately, increasing sales at a fraction of the cost of traditional advertising.”

12. “When somebody is jumping up and down because they have a beer as a reward, and they make it seem like it’s the greatest liquid they ever drank in their lives and they’re real people—that probably is more effective than having some model saying ‘Hey, drink Budweiser.’ It can be very effective.”

13. Evidence suggests product placement may be implicated in epidemic of marketing-related diseases in children • Obesity • Type-2 diabetes • Alcoholism • Smoking-related health problems • gambling

14. “Is it totally coincidental that the products associated with the epidemic of marketing-related diseases are the very ones that the marketing industry has been pushing through stealth ads—junk food, soda pop, beer, alcohol, and gambling?”

15. Examples • Soda • Coke in American Idol and Young Americans • Pepsi in Pepsi Smash and The Runner • Fast Food • McDonald’s in Beg, Borrow and Deal, Nashville Star, Big Brother and Baywatch

16. Beer • Anheuser-Busch in Survivor I and II • Rolling Rock, Labatt Blue and Dos Equis in The Best Damn Sports Show Period • Tobacco • Gambling • Casinos in Fear Factor and Las Vegas • 20% of adolescents have gambling problem

17. CA’s request to the FTC • “Investigate current TV advertising practices regarding product placement and other embedded ads, and take the steps necessary to restore some honesty and fair dealing to the presentation of these ads, by requiring concurrent disclosure that the ads are, in fact, ads.”

18. CA’s request to the FCC • “Product placements should be identified when they occur. This should be in addition to disclosure at the outset of a program. Disclosure should be large enough, and kept on the screen long enough, so that it can be read and understood.”

19. Concurrent disclosure should read ‘Advertisement’ when the product placement is on the TV screen • Disclosure at the outset of the program should be in plain English, such as • ‘This program contains paid advertising for…’

20. Freedom to Advertise Coalition • Interrupting television programs with ‘pop up’ disclosures is ‘impractical and border on the ludicrous’ • Pose a threat to artistic freedom • Noted that FTC rejected similar proposal in 1992 from Center for the Study of Commercialism regarding placement in movies

21. FTC’s response • Principal reason for identifying an advertisement is that consumers give more credence to objective claims from third parties than from advertiser itself • Cited case involving infomercial for BluBlocker sunglasses • represented as investigative report • implied reporting objective product data

22. CA’s complaint does not suggest product placement results in consumers giving more credence to objective claims about product attributes • In product placement few objective claims appear to be made about performance or attributes • Thus no rationale for requiring disclosure that advertiser paid for placement