Robert Weissman, managing director of Commercial Alert, issued the following statement in response to today’s announcement of a new Hasbro-Discovery Channel joint venture:

The Hasbro-Discovery Channel joint venture sounds like nothing more than a scheme to deliver program-length advertisements to children over television and advertisements disguised as interactive games over the Internet.

The problems with advertising to children are familiar, and qualitatively different than advertising issues involving adults: Children cannot distinguish between ads and programming. To make programming itself into a full-length disguised advertisement is pure exploitation of children for commercial gain, nothing more and nothing less.

We will ask federal regulators to investigate whether the joint venture’s plans are as nefarious as they sound in today’s press release, and to take appropriate preemptive action to block plans to exploit children.

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“Our position remains consistent with that we urged five years ago: The Commission should issue a rule requiring disclosure of product placements and product integrations at the moment they occur,” says Robert Weissman, managing director of Commercial Alert, in the submitted comments. “In addition to simultaneous disclosure, we also urge the Commission to require, at the outset of a program, direct and easy to-understand explanatory disclosures about the nature of embedded advertisements in a program.”

“To watch TV today,” Weissman says, “is to be exposed to a staggering array of product placements, product integrations, product immersions, plot placements, paid spokespeople and branded entertainment—none of which are disclosed to viewers in any meaningful way. As a result, viewers are exposed to a torrent of hidden ads, and unable to apply the filters they normally use in watching commercials. Current product placement practices perpetrate a massive deception on the American public.” Read Commercial Alert’s full comments here. Attachments to the comments (2 MB) can be found here.

Commercial Alert will continue to monitor and communicate with the FCC as it continues its inquiry into this important matter.

Commercialism “is undermining the professed ideals of the Olympic Games, and subverting the Olympics’ veneration of sport with omnipresent commercial messaging and branding,” charges the report, “The Commercial Games: How Commercialism is Overrunning the Beijing 2008 Olympic Games.”

A record 63 companies have become sponsors or partners of the Beijing Olympics, and Olympic-related advertising in China alone could reach $4 billion to $6 billion this year, according to CSM, a Beijing marketing research firm.

The Olympic Partners (TOP) program, run and managed by the International Olympic Committee (IOC) since 1985, includes 12 companies for the Beijing Olympics. These 12 companies have paid $866 million to the International Olympic Committee.

The U.S. Olympic system is awash in corporate sponsor money. Well over 100 corporations are sponsoring the U.S. Olympic Committee or U.S. national teams.

“The Olympic rush to sell sponsorships to the highest bidders has led to partnerships with companies whose products or methods of doing business betray Olympic ideals: junk food hawkers, beer and liquor peddlers, and equipment makers reliant on sweatshop contractors, among others,” says Jennifer Wedekind, co-author of the report and Multinational Monitor associate editor.

“The Commercial Games” documents the extent of sponsorship deals attached to the Olympics and official Olympics-related committees, down to everything from the “official home and industrial flooring supplier” to the “frozen dumplings exclusive supplier” of the Beijing 2008 Olympic Games. 

Commercial relations interfere with proper functioning of the Olympics, as well as undermining Olympic ideals, according to “The Commercial Games.” In at least one notable case, commercial entanglements have called into question the integrity of a national sports governing body. The relative commercial attractiveness of different sports is exacerbating imbalances in the resources and support available to athletes in different events. And, thanks to exclusive marketing arrangements, commercial sponsorship arrangements are improperly subjecting Olympic spectators to artificial monopolies at Olympic venues.

“The horse is out of the barn on Olympic sponsorships, and the world is unlikely to see a commercial-free Games anytime soon,” says Robert Weissman, managing director of Commercial Alert and editor of Multinational Monitor. “Nonetheless, the most egregious problems with the Olympics’ pervasive sponsorship arrangements can and should be addressed.” Right now, “the Olympic ideals of promoting authentic culture and education have been drowned beneath a sea of sponsorship and marketing arrangements.”

“The Commercial Games” recommends that the IOC, National Olympic Committees, and international and national sports governing bodies scale back the overall number of sponsorships. The report also urges the IOC and other Olympic bodies to refuse sponsorships from alcohol or junk food companies, or companies tied to gross human rights violations. It also recommends that they should insist that official, sponsoring apparel and equipment makers disclose where their products are manufactured, and ensure that their products are manufactured in a fashion that respects core labor standards.

“The Commercial Games” is available at: <https://salsa.democracyinaction.org/o/475/images/The%20Commercial%20Games.pdf> and <www.multinationalmonitor.org/2008olympics.html>.

Multinational Monitor is a bimonthly magazine reporting critically on the activities of multinational corporations <www.multinationalmonitor.org>. Commercial Alert is an advocacy group that aims to keep the commercial culture within its proper sphere <www.commercialalert.org>.

The FTC report* confirms what every parent (and kid) knows: Junk food and fast food companies are overwhelming children with marketing messages.

The FTC report demonstrates the comprehensive effort by junk food companies to manipulate kids. It shows how they use “cross promotions” to integrate marketing messages across promotional formats. A TV-centered ad campaign may be supplemented by toys, websites, theme park marketing, video games and sports promotions. For children, there is no escape.

Particularly notable in the FTC report is the more than $150 million spent in schools on junk food marketing (an amount that may be declining), and the extensive use of viral and word-of-mouth marketing. In viral marketing, advertisers shamelessly lure children into becoming witting or unwitting agents to hawk products to their friends.

The huge industry expenditures on advertising are contributing to the childhood obesity epidemic. Unfortunately, Congress, the FTC and other government regulators have stood by and done little or nothing as the epidemic has spiked. Thanks to public pressure, the industry has embarked on some modest, voluntary and nonenforceable self-regulation—a sad substitute for what is needed: laws and regulations that stop the marketing exploitation of children. One place to start would be a ban on TV advertising to children under 12. Another would be stop marketing to kids in school, including through vehicles such as Channel One.

Commercial Alert has proposed a broad agenda to protect children’s’ and parents’ rights from commercial interference in its Parents’ Bill of Rights, available at: <www.commercialalert.org/pbor.pdf>.

Commercial Alert is a Washington, D.C.-based nonprofit that seeks to keep commercial culture in its proper sphere, and keep it from exploiting children.

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* “Marketing Food to Children and Adolescents: A Review of Industry Expenditures, Activities, and Self-Regulation,” available at: <http://www.ftc.gov/opa/2008/07/foodmkting.shtm>.

Following is the text of the letter:

Dear Mr. Karpowicz,

I am writing from Commercial Alert, a nonprofit organization based in Washington, DC, that is concerned with excessive commercialism in society.

We are appalled by your decision to enter a promotional agreement with McDonald’s that requires the placement of McDonald’s iced coffee on the desks of your news anchors.

It is Journalism 101 that commercial influence should be kept as separate as possible from news broadcasts. Your decision to use news anchors to hawk McDonald’s coffee undermines your newscast and the integrity of your programming.

Product placement advertisements on news shows inevitably threaten to bias reporting. It will be harder for Meredith news programs to run stories critical of McDonald’s thanks to the deal. The ad agency which brokered the McDonald’s deal even acknowledged it “would expect that the station would absolutely give us the opportunity to pull our product off the set” if a negative McDonald’s story were to be aired.

Local TV news broadcasts are a crucial means of news and information dissemination. Viewers develop relationships with local news personalities, and rely on them as figures they can trust. Product placement hidden advertisements exploit this trust relationship, deceive viewers, and ultimately will undermine viewers’ remaining ability to rely on local news.

We strongly urge you to end the promotional arrangement with McDonald’s, remove the coffee cups from your set, and adopt a new blanket prohibition on product placement hidden advertisements on your news programming.

Sincerely,

Robert Weissman, Managing Director
Commercial Alert

For Immediate Release:
June 27, 2008

COMMERCIAL ALERT RESPONSE TO FCC PRODUCT PLACEMENT RULEMAKING: AGENCY SIDESTEPS REAL SOLUTION

Following is the statement of Robert Weissman, managing director of Commercial Alert, in response to the Federal Communications Commission’s announcement of notice of rulemaking and inquiry on the issue of product placement:

Five years ago, Commercial Alert petitioned the Federal Communications Commission to address the problem of hidden advertisements aired on television through the device of product placements. We finally have a response.

In the five years since our petition, product placements have grown by an order of magnitude, subjecting viewers to many tens of thousands of hidden ads every year. Nielsen reports that $360 million was spent on product placement in 2003; the figure for 2007 was $2.9 billion, according to PQ Media; and product placement was up 39 percent in the first quarter of 2008.

Is the FCC’s decision to announce a rule making and formal inquiry into product placement issues a case of better-late-than-never? Perhaps. But the Commission’s proposed new rule is wholly inadequate to address the problem of product placement deception. The FCC’s announcement shunts the real issues off to an investigative process. We and allies will certainly work to ensure that the investigative process ultimately leads to a proper remedy—mandatory disclosure of product placement advertisements at the time they air—but the best-case scenario is that viewers and consumers will be denied proper protection for a still-longer period. The worst-case scenario is that advertisers will succeed in arguing that the inadequate remedy proposed by the rule obviates the need for meaningful steps.

In its new notice, the Commission proposes to mandate larger lettering for product placement disclosures at the end of television programs and to require that disclosures air for a pre-determined period of time. It is of course true that the current disclosures at the end of programs—with small and rapid crawls—are a farce. And disclosures in larger type, aired for a longer period, accompanied by an oral statement, should be required at the start and end of programs product placements. But the most robust system of disclosure at the start and end of programs will necessarily be inadequate. 

As a practical matter, many people will not see disclosures, however prominent, at the start or end of a program. Many using DVRs will fast forward past such information—fast-forwarding is an important (but not the only) factor in why advertisers are turning to product placement advertisements in the first place. Even those watching conventional broadcasts are likely to leave the room when a program is over, or not pay attention even if they stay in the room.

The more fundamental problem is that disclosures separated in time will fail even if viewers do watch them. The emotional and persuasive power of a product placement advertisement, like other advertisements, occurs at the moment it airs. It is at that moment when viewers are being marketed to; it is at that moment when they are seeing a product portrayed favorably and forming an opinion, without recognizing that they are being advertised to. Being told earlier or later that the portrayal is an ad will not cure the deception perpetrated at the moment it happens. This is especially so given that disclosures at the end or beginning of shows will not be able to identify every disclosure precisely.

The fundamental principle of broadcast and fair advertising law in this area is simple, ethical, and grounded in common sense: Viewers have a right and need to know when they are being advertised to. The straightforward principle demands an equally straightforward response in the product placement context: they must know about product placement advertisements at the moment they occur.

Viewers experience an authentic portrayal of a product—whether used or talked about by real people, or by fictional characters in a context where no financial conflicts exist—in dramatically different fashion than when seeing an advertisement. They know to have their guard up for an advertisement, and to discount the puffery normally associated with ads. They apply no such filters to what they understand to be authentic portrayals devoid of financial motivation. That is why, when exposed to product placement advertisements, they must be told, at the moment of exposure, that they are being subjected to an advertisement.

See the FCC’s Notice of Inquiry and Proposed Rulemaking here.

Following is the text of the letter:

Dear [Book Review Editor],

HarperCollins Children’s Books recently announced it is publishing a new series for children entitled “Mackenzie Blue.” According to news reports, the “Mackenzie Blue” series will be infiltrated with product-placement hidden advertisements and will be designed effectively as a marketing vehicle for big companies.

The author of the series, Tina Wells, is chief executive of Buzz Marketing Group, which specializes in marketing to children and adolescents.

It is not unknown for works of fiction to advance political and other agendas, but this crosses a line, especially as it is geared toward 8- to 12-year-olds. “Mackenzie Blue” is in the form of a children’s novel. But in reality it is an adjunct of a corporate marketing campaign aimed at impressionable children and adolescents. Its contents have been altered to that end. (Our letter to Susan Katz, publisher of HarperCollins Children’s Books, detailing our concerns, is attached.)

Will you treat this book as a novel to be reviewed, or as an advertisement, which is suitable for discussion in the business pages?

We strongly urge you to choose the latter. Something large is at stake here. There is a difference between a novel and an ad; and if you do not uphold that distinction, then who will?

Sincerely,

Robert Weissman,
Managing Director

Following is the text of the letter:

Dear Ms. Katz,

I am writing from Commercial Alert, a nonprofit organization based in Washington, DC that is concerned with excessive commercialism in society, and particularly the impact on children.

We are appalled at your recently announced plans to publish a new series of books targeted at 8- to 12-year-olds featuring the character “Mackenzie Blue.” According to news reports, the Mackenzie Blue series of children’s books will be infiltrated with product-placement hidden advertisements and will be designed effectively as a marketing vehicle for big companies.

We urge you to abandon these plans immediately.

Your news release touts the Mackenzie Blue series for teaching kids and especially girls about how to relate to peers and develop a positive self-image, and helping them build an environmental consciousness.

These purported objectives of the series are totally incompatible with the overriding commercial partnering strategy of the series.

Excessive commercialism in youth culture is undermining kids’ self-esteem, as it substitutes an inventory of what they possess for the developmental challenge of defining who they are. It teaches children similarly to judge classmates and peers based on what they wear and how they appear, interfering with their ability to relate to others based on their unique personalities and to appreciate diverse personalities and styles. Excessive commercialism is heavily correlated with the youth obesity epidemic.  And, of course, the commercial influences and the emphasis on intensified consumption is incompatible with the fundamental ecological challenges facing the planet.

Beyond these specific concerns, marketing to young children is wrong for the fundamental reason that—even in a technology-heavy environment—many kids under the age of 11 do not have the ability to discern advertisements and promotions from entertainment and life experience.  Hidden advertisements, such as product placements, and integrated multi-media marketing strategies make this line-drawing that much more difficult.

Children and adolescents are already assaulted with advertisements on a daily basis—books, of all things, should be a haven from the commercial assault on kids. Books should educate and entertain children, not serve as a vehicle to deliver hidden marketing messages encouraging them to buy a particular brand of shoe or soft drink or cosmetics.

The Mackenzie Blue concept is a horrible degradation of the honorable field of publishing. If there is virtue in the Mackenzie Blue story concept, it will only be redeemed by liberating it from the commercial entanglements your plans seem to envision. We strongly urge you to remove all product placements and eliminate all tie-ins with external advertisers before proceeding with your publishing plans.

Sincerely,

Robert Weissman,
Managing Director

Dear [School Board Member],

I am writing from Commercial Alert , a non-profit organization that seeks to keep the commercial culture within its proper sphere, and to prevent it from exploiting children and subverting the higher values of family, community, environmental integrity and democracy.

I understand that tomorrow you will consider whether to offer up the children in your school system to predatory advertisers. I am writing to urge you to refuse to allow Bus Radio to deliver a captive audience of Seminole County’s children to advertisers.

Any parent knows that our children are already assaulted by far too many commercial messages and influences. Schools cannot be a perfect haven from commercial pressures, but they should aspire to shield children as best they can. Certainly they should not be accessories to the commercial assault on kids.

Bus Radio likes to tout the notion that its offer of providing radio service for buses, and paying schools for the privilege of doing so, is a “win-win.”

This is a wholly deceptive sales pitch.

Bus Radio is not a social service organization. Its business model involves delivering captive and perfectly age-segmented markets to advertisers. Why would any school official want to be part of such exploitation of children?

Advertising in schools and school property like buses is so inappropriate that even a majority of marketing professionals believes it is wrong. A 2004 Harris poll of youth advertising and marketing professionals found that only 45 percent “feel that today’s young people can handle advertising in schools.” Forty-seven percent believe that “schools should be a protected area” and that “there should not be advertising to students on school grounds.”

This is not fundamentally an issue of whether the ads are age-appropriate from a parent’s point of view, though that itself is no small matter. Schools should be a place for education—to gain knowledge, to acquire a love of learning, to develop and discover one’s own unique personality, to learn how to build friendships and solve conflicts, to internalize community and civic values. Commercial intrusions—already all too present in kids’ lives—undermine virtually every aspect of the educational enterprise.

Every school board member wants to do what’s best for the kids in their district. Bus Radio is a wrong turn for children in Seminole County, and everywhere else. I urge you to reject Bus Radio’s offer.

Sincerely,

Robert Weissman,
Managing Director,
Commercial Alert