FCC May Crack Down on Product Placement

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American Idol

American Idol's Paula Abdul flanked by Coke cups. Kevin Winter/Getty Images hide caption

itoggle caption Kevin Winter/Getty Images

The Federal Communications Commission is exploring new rules about product placement in television programs. Often called stealth ads, product placement are paid promotions that appear not in separate commercials but in television programs themselves.

This week the FCC is expected to begin proceedings to determine whether broadcasters will be required to let audiences know when they're watching a paid-for product placement.

The FCC is not going to prevent stealth ads, says journalist Amy Schatz, who has been covering the issue for The Wall Street Journal. "They're saying if you do it, you're going to have to tell consumers about it."

Consumer groups have been pressuring the FCC to ban stealth ads altogether, but the advertising industry has fought back hard. Consumers, who can now easily skip over commercials in many cases, simply aren't watching TV ads anymore, says Schatz. "Advertisers are desperately trying to find new ways to get their products in front of you." As a result, they spent $3 billion on product placement last year, up by roughly 30 percent from 2006.

Viewers are used to seeing prominent product placement ads on TV. For example, American Idol judges have prominently displayed Coke cups on their desk. NBC's 30 Rock has even written product placements into scripts as jokes, and its characters ask on-air, "Do we get paid now?"

Most product placements aim to be more subtle, and it's the lack of clarity that the FCC wants to address, especially in children's programming. Schatz says that the FCC is probably going to ask broadcasters to put an announcement at the end of each program stating the names of sponsors who paid for ads during the show itself. That's already a win for advertisers who, at least for now, will probably not have to acknowledge the spots at the times they actually happen.

But Schatz says that the FCC will probably insist that any notices should be full-screen, clearly readable and on for more than the blink of an eye. That would be a far cry from current TV program credits, which scroll at an accelerated pace, in tiny lettering that takes up a fraction of the screen while other shows are being previewed.



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