Monday, September 28, 2009

Should Product Placements Be Disclosed?

When Chef Jamie Oliver cooks with Barilla pasta as he plugs his cookware on HSN--a channel devoted to shopping--how much disclosure should viewers receive about the product placement deal? In this case, since the channel is explicitly selling stuff, would viewers be misled somehow if Barilla's didn't prominently disclose the product placement arrangement?

The WSJ looks at this issue today, quoting HSN's EVP of programming and marketing, who says:
"Remember, viewers come to us to learn about products."
Across the pond, UK commercial TV networks can now use product placement, although the BBC cannot, nor can Irish TV Networks. Yet. In China, product placement in online programming is ramping up, with entire plots that revolve around or feature branded products.

Last week, the FCC received a petition signed by 50 US groups (aligned as the Fairness and Integrity in Telecommunications Media) seeking stricter rules for product placement disclosure. According to a report in Broadcasting & Cable, the FCC only requires that the sponsorship ID appear once during a show and remain on long enough to be heard or read by the average viewer. Also, cable channels are largely exempt from the FCC's product placement rules.

What are the transparency issues in product placement? Do viewers expect that any brand featured in a program has paid for product placement? What are the implications for the effectiveness of product placement on consumers' perceptions and--most important to sponsors--consumers' buying behavior?

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