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TV ads to be hidden in programmes

30th January 2006

Anyone noticing the odd reference to food products during TV shows have not seen anything yet. Under new proposals from the EU such covert advertising, known as 'product placement', is set to boom.

The European Commission has completed its drafting of the new regulations to replace the Television Without Frontiers directive. According to the industry itself, 'the proposed text is, to a great extent, in line with the views defended by the advertising industry'.1 In particular it authorises the use of product placement across the EU. It also assumes the continued role of self-regulation whereby the industry sets its own rules and promises itself that it will abide by them.

The draft Directive maintains the country-of-origin rules, whereby only one Member State – the one where the head office of the broadcaster is established – has jurisdiction over a media service provider. Thus Sweden cannot prevent advertising to children being beamed in from British satellites run by UK (or US) companies, even though such advertising is banned in the local media.

The draft claims that self-regulation can 'play an important role in delivering a high level of consumer protection in all audiovisual media service' and extends the meaning of such services to include any audiovisual material delivered through any media, including internet broadband and third-generation mobile phones.

Media Commissioner Viviane Reding said that 'effective self-regulation is a necessary complement to legislative rules', and the pursuance of public policy objectives 'must be achieved by encouraging the industry to act responsibly'. She even pointed out that the increasing sense of responsibility of the industry could eventually lead to deregulation in the field of advertising.2

Further proposals include the abolition on the current daily limits for advertising and tele-shopping, but limits hourly advertising levels to an average of 12 minutes. Films can be interrupted with ad breaks every 40 minutes and children's programmes and news every 20 minutes. The draft also proposes to limit the introduction of lucrative ‘isolated spot commercials’ to sports fixtures only – for example, screening these only during natural breaks such the taking of a corner kick.

Product placement is likely to be a major sticking point with consumer groups. The proposals state that programme sponsors must be identified at the start of the programme, and that placements should not directly encourage the purchase of the products being placed in the programme.

Tobacco products are banned as are medical treatments available only on prescription. In a concession to consumers, the proposals state that product placement should not occur in children's programmes or during news or documentaries.

However, the RTL Group, Europe's largest TV conglomerate, wants to push the boundaries even further. RTL chief executive Gerhard Zeiler stated: "We are truly disappointed. We think they have missed an opportunity really to modernise advertising rules in a fast-moving environment with new technologies and competition."

RTL has lobbied loudly for greater ‘flexibility’ with commercials, arguing that the restriction of advertising during news broadcasts and children's shows might threaten funds for programme-making in those sectors.3

Meanwhile, in another branch of the European Commission responsible for health, a Platform on Obesity4 (an ongoing series of meetings between Commission officials, consumer groups and the food industry) discussed the need to limit the marketing of unhealthy foods. While food companies and the Commission were keen to develop a programme of advertising of healthier food products, consumer groups expressed strong reservations on the effectiveness of such schemes, and were also deeply critical of self-regulatory methods for ensuring industry compliance with advertising controls.

1 International Advertising Association, Briefing from Brussels 31, November 2005.
2 International Advertising Association, Briefing from Brussels 30, September 2005.
3 Financial Times Online 2 Jan 2006; WARC 2 Jan 2006.
4 For details of the European Platform on Obesity, see: http://europa.eu.int/comm/health/ph_determinants/life_style/nutrition/platform/platform_en.htm