The Federal Trade Commission has deemed it unnecessary to let viewers know that product placement in television shows may have been paid for and could be considered an “advertisement.” But it did say that the commission will continue its policy of evaluating on a case-by-case basis whether an advertising format or specific product placement is deceptive or likely to cause consumer injury.

The FTC’s ruling came after consumer watchdog group Commercial Alert asked for an investigation into whether product placement was deceiving and blurred the lines between advertising and programming. A letter to the FTC dated Sept. 30, 2003 from Commercial Alert Executive Director Gary Ruskin also stated that the appearance of products placed in programming is implicated in diseases such as obesity and Type 2 diabetes in children.

Ruskin asked that guidelines be established requiring adequate disclosure of TV product placement including the inclusion of the prominent superscript “ADVERTISEMENT.”

“Some products appear in programming because advertisers pay for such placement, while other products appear because of the creative judgment of the program’s writers,” Mary K. Engle, the associate director of advertising practices for the FTC, wrote in her Feb. 10 response to Commercial Alert. “We are not aware of any empirical data concerning whether consumers distinguish between these two uses of products in programming.”

Ruskin said that the failure to disclose that advertisers have paid for product placement constitutes an unfair or deceptive practice in violation of Section 5 of the FTC Act.

As for the issue raised that product placement can negatively impact children because children see the product and then demand that their parents buy it for them, the FTC said: “I believe that the commission’s policy of evaluating on a case-by-case basis whether an advertising format is deceptive appropriately protects consumers, including children, from misrepresentations, even as advertisers develop creative new forms of promotion.”

Commercial Alert was disappointed in the ruling.

“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,” Ruskin said in a statement.

The Federal Trade Commission has deemed it unnecessary to let viewers know that product placement in television shows may have been paid for and could be considered an “advertisement.” But it did say that the commission will continue its policy of evaluating on a case-by-case basis whether an advertising format or specific product placement is deceptive or likely to cause consumer injury.

The FTC’s ruling came after consumer watchdog group Commercial Alert asked for an investigation into whether product placement was deceiving and blurred the lines between advertising and programming. A letter to the FTC dated Sept. 30, 2003 from Commercial Alert Executive Director Gary Ruskin also stated that the appearance of products placed in programming is implicated in diseases such as obesity and Type 2 diabetes in children.

Ruskin asked that guidelines be established requiring adequate disclosure of TV product placement including the inclusion of the prominent superscript “ADVERTISEMENT.”

“Some products appear in programming because advertisers pay for such placement, while other products appear because of the creative judgment of the program’s writers,” Mary K. Engle, the associate director of advertising practices for the FTC, wrote in her Feb. 10 response to Commercial Alert. “We are not aware of any empirical data concerning whether consumers distinguish between these two uses of products in programming.”

Ruskin said that the failure to disclose that advertisers have paid for product placement constitutes an unfair or deceptive practice in violation of Section 5 of the FTC Act.

As for the issue raised that product placement can negatively impact children because children see the product and then demand that their parents buy it for them, the FTC said: “I believe that the commission’s policy of evaluating on a case-by-case basis whether an advertising format is deceptive appropriately protects consumers, including children, from misrepresentations, even as advertisers develop creative new forms of promotion.”

Commercial Alert was disappointed in the ruling.

“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,” Ruskin said in a statement.