Monday, June 30, 2008

FCC Inquiry into Product Placement

By way of David Goetzl at MediaPost's MediaDailyNews, news today that the FCC has finally agreed to investigate contemporary product placement and embedded advertising practices in television, radio and cable. The rumors have been flying for the past couple of weeks that this was coming, as both media reformists and unions from the creative industries (such as the Writers' Guild and the Screen Actors Guild) began putting some concerted pressure on the FCC to recognize growing public concern about the lack of transparency when it comes to product integration. Last Friday, the government body issued a split docket Notice of Inquiry (NOI) / Notice of Proposed Rulemaking (NPRM), and is now seeking comments from the public and relevant interest groups. Here's an excerpt from Goetzl's coverage:
In its notice, the FCC wrote that as product placement becomes more widespread, FCC rules must "protect the public's right to know who is paying to air commercials or other program matter on broadcast television, radio and cable." But it added that the rules must be considered in light of "the First Amendment and artistic rights of programmers."

FCC regulations currently do not cover cable, so extending them to that medium would be notable. But most of what the FCC is exploring could be a game-changer.

For example, one issue under consideration is whether the FCC should mandate disclosures during a program simultaneously as a paid-for sponsorship on the screen. Also up for debate is whether disclosures should be required before or--more radically--before and after a show that includes product integrations.

The FCC has specified that the inquiry will include an investigation into political ads, reality TV, and that new trend of advertising during programming via a banner that pops up along at the bottom of the screen. However, on the issue of embedded advertising in children's programming, there seems to be a little ambiguity. Here's an excerpt from Commissioner Michael Copps' statement:
[T]he NPRM section tees up certain key issues on which we can move directly to rules—such as whether and how to make sponsorship identification more obvious to consumers, and rules regarding embedded advertising in children’s programming.

On the latter point, it is my strong initial belief that embedded advertising in children’s programming is already prohibited because it would run afoul of our existing requirement that there be adequate separation between programming content and advertising. The Commission’s existing policies in this area—which also include a ban on host-selling and tie-ins on children’s programming—target those practices that unfairly take advantage of the inability of children to distinguish between programming and commercial content. I hope we can move quickly to clarify our rules in this area as necessary and to take any appropriate enforcement action.

I'm really hoping that this "enforcement action" will result in some real changes in kids' marketing practices. Although the existing policies might be sufficient -- if they are strengthened, expanded and better integrated (what about cable? what about cross-promotional tactics that seem to loop-hole through existing definitions of "program-length commercial" and "host-selling"?) -- the problem remains that they are not really being respected or enforced. This will have to be addressed. I suppose however that Copps' statement could also be seen as a serious call to action...as these existing rules are tested and retested via the existing complaint system...we'll see.

Although this is just an inquiry, the FCC's announcement just makes me all the more embarrassed by our own government right now -- as the rest of the world seems on the verge of a significant media policy renaissance, our own CRTC is still marching steadfastly (and blindly!) toward media deregulation and corporatization. That said, however, it took the US's initial media policy actions in the 1960 and 70s to get our own government moving again on media regulation, leading to the implementation of many of our better policies and industry standards (including the Broadcast Code for Advertising to Children). My hopes for the FCC inquiry therefore definitely also extend to its causing some public pressure of our own to start mounting against the removal of ad-limits and the rest of the nonsense the CRTC has been up to in recent years.

In response to the announcement (and possibly in retort to Copps' assertion that embedded ads in kids' programming is already addressed within existing policy), the CCFC released the following:
We are pleased that the FCC has begun to respond to the concerns of parents and advocates about the erosion of clear boundaries between programming and advertising. The rise of product placement and product integration is turning television shows – including those watched by millions of children – into program-length infomercials. As part of this new rulemaking process, it is essential that the FCC extend existing prohibitions on product placement in children’s programming to include programs watched by large numbers of children. We also support new rules that would require real time disclosure of embedded advertising in programs for adults so viewers can better understand when they are being targeted by marketers. We look forward to working with FCC on this important process.”

All in all, it's always a good thing when debates start spreading into more formal platforms of the public sphere. First the UK and now the US...fingers crossed that this debate makes its way back to Canada next.

You can read more about the inquiry here:
Ars Technica
Commercial Alert
World Advertising Research Centre (WARC)
NPR
AdAge

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