December 19th, 2007
FCC Postpones Decision on Embedded Ads
By Brooks Boliek and Gail Schiller
FCC chairman Kevin Martin said he expects the commission to examine the issue of product integration—or embedded advertising—on TV despite his last-minute decision to remove it from a commission meeting agenda.
“The meeting was just going to be so long already with all these issues that were all related more to ownership,” Martin told The Hollywood Reporter. “I thought it was more important to not overload the meeting.”
While the FCC didn’t vote on the notice of proposed rulemaking—considered the first official step toward creating new FCC regulations—top aides said it had the three votes necessary to win approval.
The FCC still could approve the notice by a process known as circulation before year’s end. “It was on circulation before the meeting,” Martin said. “It’s still on circulation.”
If the notice doesn’t make it through before New Year’s Day, the aides said they expect the FCC to take it up early in 2008.
Martin’s comments were certain to disappoint Madison Avenue, which hoped it had convinced the commission to reconsider issuing the notice on embedded advertising.
The three main U.S. advertising trade groups—the American Association of Advertising Agencies (4A’s), the American Advertising Federation and the Association of National Advertisers—sent a letter Friday to the FCC urging it to instead issue a less-stringent notice of inquiry, which is designed to gather information as a means of generating ideas.
Before Martin’s comments, 4A’s senior vp and legal counsel Adonis Hoffman said that while no reason was given for the FCC’s decision, “I’d like to believe it was the strength of our letter and the persuasive rationale we provided, including the fact that the Federal Trade Commission decided against further regulation in 2005.”
Jeff Perlman, executive vp at the American Advertising Federation, realized the reprieve could be temporary. “But we hope this is a good sign that the commission has said, ‘Wait, let’s stop and think about this,’ “ he said.
Hoffman said the trade associations believe there already are sufficient rules in place to provide notice and disclaimers as to which products are paid for in on-air content, including promotional considerations listed in the end credits. Crawls at the bottom of the screen being demanded by consumer groups like Commercial Alert that would appear at the moment products are featured in a show are unnecessary, he said.