FCC Issues Embedded Advertising Notice of Proposed Rulemaking

June 23, 2008

To: AAF Members
From: Jeff Perlman, Executive Vice President – Government Affairs
Clark Rector Jr., Senior Vice President – State Government Affairs
Robert Kohlmeyer, Manager – Government Affairs
Re: FCC Embedded Advertising/Product Placement

The Federal Communications Commission has indicated it will conduct a Notice of Proposed Rulemaking (NPRM) on embedded advertising disclosure. The commission is considering whether it should require simultaneous disclosure of all product placement instances on television.

The FCC decision is troubling to the advertising industry because it suggests that regulatory action is necessary. In 2005, the Federal Trade Commission considered and rejected a similar proposal, saying there was no evidences that product placement was unfair, deceptive or resulted in consumer harm.

The AAF, along with AAAA and ANA, wrote to the FCC commissioners in December asking that the agency consider embedded advertising under a Notice of Inquiry (NOI). Given the significance, complexity and economic implications of this issue for free media, we believe the commission should conduct a closer examination of the subject to determine if any problems exist before considering possible regulatory solutions.

A copy of the letter the AAF sent to the FCC is available here. Please do not hesitate to contact us if you have any questions.