Watchdog group hits TV product placement

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Ralph Nader's Commercial Alertconsumer watchdog group is taking aim at product placement in TV programming, filing a complaint with the Federal Trade Commission and Federal Communications Commission. The complaint, which names Walt Disney Co.'s ABC, Viacom's CBS, General Electric Co.'s NBC, News Corp.'s Fox, United Paramount and WB Television networks, charges that TV networks deceive the public by failing to disclose the placements.

As reported first on, (QwikFIND aap03y) the complaint calls for FTC and FCC investigations and new rules to require TV networks and stations to disclose to their audiences all product placements in their programming. Commercial Alert's letter to the FCC requests an investigation into product placement on TV and petitions for rule making, while the FTC letter contains a similar request for an investigation and for creating guidelines that would require adequate disclosure of product placement.

A CBS spokesman declined to comment. A Fox spokesman said the network does not comment on litigation. Calls for comment made to other networks were not returned at press time.

"Advertising has to be distinguished as infomercials, not a misleading format," said Commercial Alert Executive Director Gary Ruskin. "Part of our argument is that there should be separate context. Television enterprises have to disclose when ads are ads. There are rules for Internet searches and for magazine advertising."

Nearly three years ago, the consumer advocacy group filed a complaint that made almost the same argument against the practice by Internet search engines of adjusting search results to favor advertisers who had purchased the rights to certain terms or phrases. Ultimately, the FTC issued a warning letter to the larger online search-engine companies, urging them to label advertising search results so they clearly stand out from editorial search results. Search engines now routinely follow this procedure.

Mr. Ruskin's group would now like to see TV networks running concurrent identification of product placements when they occur, preferably at the start of a program. One problem, he said, is that many marketers say that no money is exchanging hands, they are merely providing props without charge.

Sophisticated packaging

While product placements have been around since before the `50s, placement agencies in their current guise are highly sophisticated at packaging together marketers, prop masters, networks, producers and even talent agencies. Many would argue that their role has made it easier for producers to finance their shows.

Patti Ganguzza, president of AIM Productions, a New York-based product placement agency, said that while she has no problem with the idea of rolling credits, any new guidelines should come from the parties involved, ratherb than be enforced by a lobby group. "We can't have full disclosure when there are no guidelines. Everyone is still testing the water and if it's reactive, then that's bad."

Ms. Ganguzza added that it was naive for anyone to think that there wasn't already a huge commercial relationship between brands and the TV networks, one which has stretched back years. "There is a paranoia about our business that shouldn't be there. We don't control the storyline, or the brands that are included. The writers and producers do."

The Commercial Alert complaint and challenge comes as the product-placement business gains increasing traction throughout the marketing, advertising and entertainment communities, such as NBC's "The Restaurant," starring Rocco DiSpirito interacting on screen with brands such as Coors and American Express. Faced with rapidly rising TV prices and declining viewers, marketers have turned to product-placement and branded-entertainment.

Commercial Alert's complaint letter includes references to a number of articles about product-placement deals that are part of larger sales agreements. One of these is NBC's agreement with Avon to weave cosmetics story lines into soap operas; another, Fox Sports' deal with Snapple, Labatt USA and Ford Motor Co.'s Lincoln Navigator.

Ironically, product placement has become so prevalent that even the federal government is involved in pursuing such marketing services. The U.S. Treasury, through its public relations agency, WPP Group's Burson-Marsteller, hired Omnicom Group's Davie-Brown Entertainment and talent agency William Morris to help promote the new colorized $20 bills on a variety of TV quiz shows and late-night talk shows.

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