FTC Will Look At Product Placement

Agrees to review Nader group's complaint

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%%STORYIMAGE_RIGHT%% When Ralph Nader's Commercial Alert recently filed a complaint with the Federal Trade Commission exhorting the group to demand the TV networks to identify all paid product placements in their programming, the branded entertainment world for the most part reacted with a collective shrug.

Now that the FTC agreed yesterday to review the complaint, executives are still playing down its significance.

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

Commercial Alert wants to see upfront credits telling viewers that there is paid product placement in the shows they are watching.

In a letter to Commercial Alert, the FTC wrote: "In determining whether to take enforcement or other action in any particular situation, the Commission may consider a number of factors, 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."

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 group's complaint does not include those situations where brands are organically woven in by the show's creative staff without a formal deal or payment. The complaint names all six broadcast networks, ABC, CBS, NBC, Fox, UPN, and The WB.

The industry is taking a wait-and-see attitude. Laura Caraccioli-Davis, VP-Director 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."

Caraccioli-Davis adds that broadcast networks have been forced to respond to the more freewheeling environment in cable, where brands often sponsor shows and provide goods for make-over series for example. She does wonder if the media hype about product placement has simply made the practice more visible than it has been in the past.

Mitch Kanner, a partner in Integrated Entertainment Partners, Beverly Hills, Calif. said: "Have they [Commercial Alert] been watching the last sixty years of television…there are already end credits for a lot of product placement."

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

Separately, Mark Workman, CEO of FFG-FirstFireworks Group, Los Angeles, feels that while the complaint has prompted a dialogue about product placement, regulation isn't the answer. "Labeling of video games was a similar broad issue, but it has had virtually no impact."

Workman points out some of the difficulties that TV stations might have in trying to identify all the product placements and then list them in the credits. "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?"

Workman suggests that perhaps TV stations could be encouraged to post product placement details on their Web sites. He adds that there have been numerous occasions when producers have just said no to certain placements.

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