Commercial Alert Response: Placement comes under FTC review

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The Federal Trade Commission agreed last week to review the complaint of activist group Commercial Alert, which is demanding TV networks identify with upfront credits paid product placements in their programming.

Mary Engle, associate director of the FTC, confirmed that the federal body would take a thorough look at the complaint, but couldn't say at this stage whether it was likely to start any action or investigation.

"In determining whether to take enforcement or other action in any particular situation, the Commission may consider a number of factors," said the FTC in a letter to Commercial Alert, "including the type of violation alleged; the nature and amount of consumer injury at issue and the number of consumers affected, and the likelihood of preventing future unlawful conduct and securing redress or other relief." It concluded, "we will conduct a thorough review of your petition to determine whether action by the FTC is warranted."

No FCC response yet

The Portland, Ore.-based nonprofit consumer watchdog group made a similar complaint to the Federal Communications Commission, which has yet to respond. The complaint charges that TV networks are deceiving the public by failing to disclose paid product placements. The complaint names all six broadcast networks.

The industry is taking a wait-and-see attitude. Laura Caraccioli-Davis, VP-director of SMG Entertainment, Starcom MediaVest Group, said, "When I talk to folks about it, no one thinks that it is an issue. I'm not sure people are taking it as seriously as they should be."

"Have they [Commercial Alert] been watching the last 60 years of television?" asked Mitch Kanner, a partner in Integrated Entertainment Partners, Beverly Hills, Calif. "There are already end credits for a lot of product placement."

Mr. Kanner argued that the current period of experimentation with product placement is something that needs to be explored given the crisis in both TV and advertising. "We should let it find some success before we start clubbing a dying horse."

Mark Workman, CEO, FFG-FirstFireworks Group, Los Angeles, feels that while the complaint has prompted a dialogue about product placement, regulation isn't the answer. "This whole [product placement] thing came about because people weren't watching the commercials. If TV stations spent more time rolling credits, wouldn't people just skip that too?"

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