Product Placements May Require In-Programming Disclosure

Today’s edition of the Wall Street Journal includes an article reporting that product placements are going to get FCC scrutiny. It’s one each of us in the marketing business should read and a developing story we should follow, because it could have a big impact on both paid and unpaid product placements going forward.

With more consumers using digital recorders to fast forward their way through TV spots, product placements are on a significant rise to reach them within programming. The WSJ article reports that Nielson Co. found product placements are up 40 percent in the first quarter alone on broadcast TV shows and that spending on paid product placements is up 33.7 percent from a year ago.

The FCC is expected to start a formal look at new requirements for product placement disclosure. New rules could completely change the product placement game for advertisers and PR folks, depending on the outcome of the FCC’s rule review. One of the biggest recommendations for the tool is to think of it as product integration. The product should show up contextually, relevantly and become part of the story. Anything too promotional becomes a distraction to viewers and typically turns them off. So imagine what may happen the next time you’re watching “The Office.” Those prominently placed HP computer monitors may require a flashing bubble across the bottom to make sure you know that HP provided them.

This is also big news for those on the TV side of the fence. I’ve received calls from several producers who work on reality shows asking if a client would like to provide free products in return for recognition in the credits. It’s one way they look to cut back on expenses and fall under their budgets.

What do you think about product placements? Do you think the FCC is going too far or do you think it needs to reign in the dramatic growth of what some are calling “stealth advertising?”

*Image from msnbc.msn.com

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(Cross-posted from relentlessPR, another blog I write for often. Thanks to my friend Maria Lachapelle for sharing the WSJ article with me!)

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6 responses to “Product Placements May Require In-Programming Disclosure

  1. This inevitably happens because there are policy considerations specific to tobacco, alcohol and other public health concerns, such as fatty foods, among other things. I would say it’s inevitable and is only delayed by the ability of the FCC to get around to it. Mostly it’s already been mandated in the fine print of major legislation.

  2. We used to do a lot of product placement when I was at Iams. I’m not sure whether it actually moved the needle on sales, but I do know we got lots of anecdotal feedback from customers who called to let us know they were excited to see bags of Iams Dog Food in the movie Beethoven, for example. I see product placement as more of a relationship enhancer with existing consumers than a way to reach out and win over new customers.

    As for the new FCC scrutiny, they must not have enough to do over there. Seriously – do people really need to be told that Coke sponsors American Idol? I can see the considerations mentioned by the commenter above as being valid – prescription drug products, other adult products – but for consumer products like beverages or laptops? I am not sure why we need to be protected like that.

  3. “Seriously – do people really need to be told that Coke sponsors American Idol?”

    That’s exactly what I thought as I read about it, Lara.

    Thanks to you and Mike for sharing your insights!

  4. I think that we have to combat DVR syndrome somehow. I don’t even watch commercials anymore because I usually record what I want to watch and then fast forward right through them. Occasionally the product placement gets overwhelming and sometimes just plain annoying… but we advertisers gotta do what we gotta do.
    Don’t forget the car company on American Idol too! I think it’s Ford. Either way the faux-mercials that the idols are forced to make just get ridiculous.

  5. thecoconutdiaries

    I’m not sure I’ve ever seen a product in a movie or on a TV show and went “Damn, I FORGOT that I needed denture cream! Thanks for the reminder!”. Now that product placement is so OBVIOUS it’s gotten more annoying. I don’t care that Paula Abdul drinks Coke. In fact, I have drawn a direct correlation between Coke/Starbucks drinkers and the increased incidents of bat-sh*t craziness. But it might just be me.

  6. I do not have a problem with product placement, if that means less interruptions from real commercials, then great have at it. I would never buy anything unless I wanted it, and had researched it anyway. If FCC mandated screen crawls do occur then it will mean the end of watchable television, nothing will be the same.

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