FTC rejects Product Placement transparency rule

[Moses]

February 11, 2005
ADDENDA

F.T.C. Decides Against Product Placement Rule

By THE NEW YORK TIMES

F.T.C. Rejects Rule On Product Placement

The Federal Trade Commission rebuffed a challenge to product placement yesterday by an advocacy organization that criticizes the practice as deceptive.

The organization, Commercial Alert, in Portland, Ore., called on the commission in September 2003 to require that placements be prominently identified with a superimposed message like "advertisement" as they occur during programming.

In its response yesterday, the commission wrote in a letter to Gary Ruskin, executive director at Commercial Alert, that even though "there may be instances in which the line between advertising and programming may be blurred," additional regulation was unnecessary because "the existing statutory and regulatory framework provides sufficient tools for challenging" deceptive practices.

The Association of National Advertisers applauded the decision. "The proposals put forward by Commercial Alert to require pop-up disclosures with every product placement were radical and misguided," said Daniel Jaffe, executive vice president at the association, "and are not necessary to protect television viewers." The association formed a coalition with other industry organizations in November 2003 to oppose Commercial Alert's attacks on product placement.

Mr. Ruskin, in his response to the letter, said yesterday that the commission had "essentially endorsed the deceptive and dishonest practices of the product placement industry."

Copyright 2005 The New York Times Company

[Moses]

Subliminal Advertising OK! Television content just one long whoring product pitch to "consumers".

Fri, Feb. 11, 2005

Placement of products clears FTC
Washington Post

WASHINGTON – The Federal Trade Commission staff on Thursday rejected a request from a consumer group to regulate the practice of advertisers’ paying to strategically place products on TV shows as part of the programs.

Commercial Alert, a group founded by Ralph Nader, wanted the agency to require advertisers to clearly label such “product placements” as advertisements. Companies spent an estimated $3 billion in 2003 to get products displayed in movies and TV shows, according to an ad agency study.

The FTC said there’s no indication that such product placements mislead or deceive consumers because no claims are made about the products.

The product or its logo – such as the Coca-Cola logos on the judges’ drinking cups on “American Idol” – just appears on screen, wrote Mary Engle, the agency’s associate director for advertising practices, in a letter to Commercial Alert. “The product’s performance is not discussed. Therefore, the rationale for disclosing that an advertiser paid for a product placement ... is absent.”<br>
Engle also said there was no consumer harm from product placements in children’s programs, even if they prompted kids to pester their parents to buy a particular product.

[Moses]

02/11/2005
FTC Rules Against Disclosing Product Placement Ads.

Those who would like to further blur the lines between content and advertising got help from the Bush Administration Thursday when the Federal Trade Commission ruled against a petition by the consumer watchdog group, Commercial Alert, asking that TV shows disclose in some fashion that brand placements in TV shows are paid advertising.

As a journalist, I always think more information is better than less. I always think of the children in these cases. If a child, or parent and child, is watching a TV show and the storyline takes the characters to Burger King for a Whopper, I think it's worth knowing that the trip to the fast food joint was bought and paid for. The point of such a placement is to model the behavior of going to Burger King. Advertisers don't want us to know we have been advertised to. The FTC thinks that's a good thing.

Product integration into TV shows, video games and even magazines is taking off. More and more advertising is going to be woven into the shows we watch, the games we play and the magazines we read. Why? Because advertisers have spent so many years hurling static, uninteresting or obnoxious ads at us, we have driven demand for technology that enables us to skip the ads. Advertisers don't like that, especially when they are paying big bucks for the time and space.

Back in the day, shows like The Andy Griffith Show ran a full slate of credits at the end of the show (still, thankfully, available on TV Land). There was a clear disclosure that Ford Motor Co. provided Andy and Barney's squad car. At the end of The Dick Van d**e Show, it was made clear that his wardrobe was supplied by Botany 500. The advertisers wanted us to know their stuff was in the show. Game Shows, of course, still do this. I suspect one of the reasons advertisers fought and won this one is because they want the freedom to squish credits to an unreadable type-size and scroll them so fast no one can read them. By doing so, they have extra time to run advertising and promote their own programming.

Lord knows, we can't be against advertising. That would be like being against free speech (though there are plenty of people around who seem to be against free speech, including several people making millons of dollars a year in the media). But there is also a thing called "Freedom of Information," and the FTC just seems to have ruled against that particular freedom.

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David Kiley covers Marketing and Advertising for BusinessWeek

[Moses]

TV Content: All advertising, all the time.

publications.mediapost.com/index.cfm?fuseaction=Articles.showArticleHomePage&art_aid=27148

The FTC yesterday declined to order such a disclosure on the theory that simply showing or mentioning a product without also touting its merits doesn't necessarily mislead or deceive viewers. "In product placement, few objective claims appear to be made about the product's performance or attributes," wrote Engle.

Gary Ruskin, executive director of Commercial Alert, criticized the rationale as stemming from a narrow view of advertising--one that apparently discounts the possibility that marketers can subtly influence consumers without direct testimonials. The FTC's position, Ruskin said, was "based on a totally antiquated notion that advertising persuades only through objective claims, and not imagery."

But advertising industry representatives praised the FTC decision. "If the industry was looking for a favorable ruling, they couldn't dream of one better than this," said Reed Smith lawyer Doug Wood, who represents the Association of National Advertisers. Arguably, said Wood, even a character plugging a product with a scripted line such as "I only drink Coke" wouldn't be considered advertising, because the character didn't explicitly state that Coke was objectively better than other drinks.

Had the FTC gone the other way, Wood said, product placement would have been much more difficult. "There would have been a chilling effect," he said.

Frank Zazza, CEO of iTVX, which valuates product placement in television shows and movies, said that Commercial Alert's proposal would have increased the "clutter" on the air. "It would have been the equivalent of spam," said Zazza.

One of the organizations opposing Commercial Alert's request was the Freedom to Advertise Coalition, made up of six groups: American Advertising Federation, American Association of Advertising Agencies, Association of National Advertisers, Direct Marketing Association, Magazine Publishers of America, and Point-of-Purchase Advertising International. The coalition argued in a Nov. 12, 2003 letter to the FTC that the proposals "seek to extinguish the free speech rights of those who wish to communicate via these means."

The FTC yesterday left open the possibility of requiring more disclosure of sponsorships in the future. "The decision not to take formal action in this matter should not be construed as a formal Commission determination" of whether product placement constitutes an unfair or deceptive trade practice, wrote Engle. The FTC also wrote that it intends to separately consider celebrity endorsements on news or entertainment programs.

Commercial Alert more successfully challenged product placement on the Internet two years ago, when it persuaded the FTC to recommend that search engines do a better job of distinguishing sponsored listings from organic results.

Ruskin said his group intends to continue to push for more disclosure of paid sponsorships on the air by lobbying for new federal legislation and pursuing a still-pending complaint with the Federal Communications Commission. "It's a bedrock part of American broadcast law that viewers have the right to know by whom they're being persuaded."

[Moses]

Even re-runs aren't safe:

URL: www.naplesnews.com/npdn/neapolitan/article/0,2071,NPDN_14939_3535904,00.html

Virtual product placement gives new advertising life to reruns

By RICK KUSHMAN, The Sacramento Bee
February 10, 2005

Here's a fun little development in the world of television that will make your head hurt.

Now, you won't even need a product to have a product placement. Warner Bros. Television is working on letting advertisers insert computer-created images of stuff into the backgrounds of some repeat TV comedies.

Or put more simply, this is virtual product placement (although the people who do it call it "digital branded integration" because, I'm guessing, they're computer geeks.)

That means in a rerun of a Warner Bros.-owned show like "Will & Grace" or "Friends," a soda can or a cereal box will pop up on a countertop. Yes, it starts to get freaky if you think about it too much.

The trade industry magazine Television Week reported this week that Warner Bros. has signed deals with two companies to insert their products into syndicated comedies. It didn't say which products or which shows.

The technology for this has been around a while. It's more or less the same process that rotates logos on signs behind home plate in TV baseball games or superimposes a yellow first down line on football fields.

According to Television Week, executives said Warner Bros. doesn't particularly want a lot of actors connecting to the virtual product placement, so Ross and Rachel won't suddenly be holding Coke cans during a make-out scene, and Monica's shirt won't change to say Nike.

More likely, the kitchens and living rooms so common in sitcoms will start to sprout a few more labels, cans and bottles. All they need is a shot that doesn't move for a few seconds.

The larger question might be whether product placement, virtual or otherwise, has much of an advertising impact. The answer to that is a hard formula to translate into ad rates, plus it isn't like American TV viewers will see something on "Friends," say Jennifer Aniston's hair, then all rush out to get a Rachel cut.

[Moses]

Home Depot in product-placement deal[/size]

By RENÉE DEGROSS
The Atlanta Journal-Constitution
Published on: 02/01/05

Home Depot has signed a multi-program, multi-year deal with Mark Burnett Productions for product placement on several of its new reality shows.

Atlanta-based Home Depot, the nation's largest home improvement retailer, has had product placement with Burnett before, including on the "Apprentice II" last fall.

Exact terms of the deal were not disclosed, but Home Depot product placement will appear on this season's "Apprentice III," and "The Contender," Burnett's reality program set to debut March 7 on NBC.

Themes of empowerment, home improvement and home building, will be showcased on the shows, according to Home Depot.

"We are thrilled to be involved," said John Costello, executive vice president of merchandising and marketing. "This new partnershp enables us to continually reach our target audiences in unique ways."

[Moses]

Slimely sleezy procurers of crap discuss their products:

Product Placement Seen to Grow on TV
Last Update: 1/27/2005 10:44:24 AM



Knight Ridder/Tribune Business News


Jan. 27--As more television viewers embrace digital recording devices that allow them to skip commercials, producers and networks are increasingly incorporating product placement into shows, a panel of experts agreed at the National Association of Television Program Executives at Mandalay Bay Convention Center.

Arnold Peter, moderator for a discussion at the National Association of Television Program Executives, reminded the audience on Tuesday that Stephen Spielberg focused on Reese's Pieces in "E.T. the Extra-Terrestrial," which marked the beginning of the product placement boom. However, advertisers and networks are seeing it as more and more necessary, said Peter, who is chairman of Lord, Bissell & Brook LLP Entertainment Practice Group.

Still, Delbert Mayberry, executive vice president and chief financial officer of Fox Networks Group, said even though product placement is seen as essential, the content of television shows will remain important. Hugely popular shows will keep people watching because they won't want to miss talking about the show with their friends the next day, he said.

"We're worrying about DVRs, but we need event-type programming," Mayberry said. "That's why we focus on sports, news and programming like 'American Idol.' Water cooler programming is so important."

But Eric Schotz, president and chief financial officer of Lmno Productions, told Mayberry that having buzzworthy shows won't solve the problem of lost advertising dollars because people are skipping past the commercials.

"I TiVo 'American Idol,' " said Schotz, whose company is responsible for: CBS's "Kids Say the Darndest Things," "Guinness World Records: Primetime," "Celebrity Boot Camp" and NBC's "Race to the Alter," among others.

Schotz said real dilemma facing advertisers doesn't revolve around content, but how much product placement is too much.

"In one of the first episodes of 'The Apprentice,' the contestants work on a project for Burger King; then at the end of the episode Donald Trump appears in a Burger King ad," Schotz said. "He compromises his credibility because he did an ad for Burger King at the end of the episode. It goes too far when people stop watching. And 'The Apprentice's' numbers are going down."

Schotz told the audience about a product placement debacle that arose on "Wickedly Perfect," a new reality series he is working on for CBS.

"In the third show they (Sears, Roebuck and Co.) wanted something taken out," Schotz said about one of the show's sponsors. "One of the women said her head was going to explode if she didn't get out of the department. The comment was made about her teammates -- not the store. But they worried it would hurt their brand."

Schotz said he considered if omitting the scene would change the story line. He decided it wouldn't and agreed to remove it from the show. He cited this as one of the problems facing producers.

"I don't have to buy stuff, which reduces my budget," Schotz said about having Sears donate their products in exchange for recognition. "It's good for the network, which can have a 'Sears moment' commercials."

Schotz said he meets with potential sponsors of his reality TV shows and tries to identify what they want. When planning for "Wickedly Perfect," Sears told Schotz it wanted to promote the company's gym equipment and televisions. He said the contestants were slotted to engage in a home makeover that could easily feature Sears' specified products.

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To see more of the Las Vegas Review-Journal, or to subscribe to the newspaper, go to www.lvrj.com.

(c) 2005, Las Vegas Review-Journal. Distributed by Knight Ridder/Tribune Business News.

[Moses]

Networks making a bundle injecting product mentions into scripts:

Searching for Product Placement Spots
Author: Jim Hedger

....Over the past seven days we've seen an array of product placements on television shows. For two years, the brand-name Google was used as a noun, a verb and an adverb. It is little wonder the other search engines want to produce a little word-of-mouth of their own. This is the kind of advertising money can't buy and in all cases, the search firms claim they did not purchase the placements.  Yahoo has signed a content distribution deal with the producers of the Apprentice however.
 <br>If the search engines are not purchasing these placements, they are certainly calling favors from contacts in the entertainment industry.
 <br>Recently a character on teen drama The OC was “A9.Com'd” by another character.  The episode was released the day before A9 announced their local-search product A9Yellow Pages.  According to Google-Video, here are the lines from the script:

“Uh, you were right. Caleb Nichol is not a good Guy. Why, why happened? Did he call you? No, but I a9.Com'd him last night, and according to the O.C. Weekly, he's pretty much everything that's wrong with Western civilization, all wrapped up in one Guy.” (Fox - Fox Network - Thu Jan 27 2005 at 8:00 PM PST )
 <br>Next came the Yahoo surveys used in the last episode of the Apprentice in which the destination travel businesses (established overnight by two teams) were voted on via a Yahoo poll.  The product placement promoted the “Review this” rating option featured by Yahoo-local.  Here is some of the text from that episode: <br>
“Each team will be given $20,000 to renovate and refurbish a motel on the Jersey Shore. Then you will welcome paying customers. After the guests check out, they will rate your motel on Yahoo” (NBC - NBC Network - Thu Jan 27 2005 at 8:30 PM PST )
 <br>Previously, the quiet butler Jeeves got in on the action with a placement mentioned on the dysfunctional family comedy, Arrested Development.

“Now, unfortunately, it's a private Stock, so you cannot just buy up the shares unless someone is willing to Sell. Are you sure? That's what they said on "Ask Jeeves." All right, who's the majority shareholder now? A company called "standpoor." "Standpoor"?” (Fox - Fox Network - Sun Jan 23 2005 at 8:30 PM PST )
 

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(rest at link)
www.isedb.com/news/article/1102