Consumer Group Loses Product Placement Request

A request that could have limited advertisers' ability to place products in television shows without regulation was rejected yesterday by the Federal Trade Commission (FTC). The 2003 request was made by Commercial Alert, a consumer advocacy group based in Oregon and founded by Ralph Nader.

The 17 page September 30, 2003 letter to the FTC referred to "product placements" as embedded advertising and "stealth advertising" and asked the FTC to determine whether product placements should be disclosed as advertisements.

In a written response yesterday, Mary K. Engle, the Commission's Associate Director for Advertising Practices, stated that "...there may be instances in which the line between advertising and programming may be blurred...", but concluded "...existing statutory and regulatory framework provides sufficient tools for challenging any such deceptive acts or practices."

“Today, the FTC has essentially endorsed the deceptive and dishonest practices of the product placement industry, and turned its back on children who are suffering from an epidemic of marketing-related diseases like obesity and type 2 diabetes,” responded Gary Ruskin, executive director of Commercial Alert

A Penn State study partially support the concept that product placement were more effective at "increasing positive brand attitudes" and increasing recognition and recall of featured products. The 2000 study was presented at the 50th conference of the International Communication Association.

More recently, a Washington Post profile of public relations agent Jonathan Cheban showed the secrets behind how product placement for products like Evian water work. The article quotes Cheban as saying, "We're not tricking anybody...It's a service for consumers because they want to know. Average people want to know what's hot. And I only will do things that are classy and high-end."

The same paper reported the next day that Cheban was banned from VH-1's The Fabulous Life. The article quoted a VH-1 spokesperson as saying, "The network had no idea that there was any connection between Evian water and Jonathan Cheban. We're not going to be booking him in the future."

posted by Consumer Help Web Editorial Team at 10:20 AM |