Product Placement

A stealthy form of advertising in which products are featured on television shows as props and even woven into story lines has drawn the government's attention. The Federal Communications Commission said Thursday it will consider new rules to make it clear to viewers when brand-name products appear in shows in exchange for money.

Turner Broadcasting plans to introduce a new advertising system designed to match commercial messages with the content of its programming. Turner calls the system “TVinContext” and says it has been in development for more than a year.

Cisco seems to be showing up in all kinds of entertainment mediums, and is bringing digital signage to the forefront when advertising or doing product placement in those mediums. In addition to the digital signage placement in the video game Rainbow Six Vegas 2, Cisco is also working closely with major networks such as CBS, FOX and NBC to integrate its products into TV shows, such as Heroes and CSI.

In the 1950-51 television season, among the top six shows were Texaco Star Theatre, Philco TV Playhouse, The Colgate Comedy Hour, and the Gillette Cavalcade of Stars. NBC apparently remembers, and is reviving the full program sponsorship. Liberty Mutual is first off the blocks, adding its name to a pair of TV movies. It's a sensible tactic. When viewers start skipping those "words from our sponsors," you'll still get attention with shows from our sponsors.

By tastefully integrating a brand into good storytelling, research has shown that most users' affinity for the brand grows. More important, perhaps, the effects of the traditional 30-second advertising around these shows is bolstered by the three to five minutes of brand exposure during the show.

According to Jake Pitt, "The lifecycle of internet advertising follows traditional media advertising. First, there is no advertising, as consumers are just beginning to adopt the new technology. Once the consumers are there, the advertisers come in, throwing their ads up all over the place (commercials, infomercials, etc.). Finally, advertisers wise up and realize that product placement is more efficient, more effective, and the best way to go, especially since big traditional ads are just plain annoying."

User generated content will attract increasing amounts of revenue this year but analysts disagree on how much and the form the ads will take. One trend is clear: Brand advertisers are increasingly placing messages in highly controlled UGC environments around target niches where the community is easy to understand and inappropriate content is unlikely to appear. In some cases, the advertisers themselves have created the spaces, or had it made with their sponsorship in mind.

The government officials who've been looking at product placement look like they're granting a reprieve. FCC Chair Kevin Martin said the commission as a whole does not support strict regulation. General advertisers would be thrilled to remain exempt from burdensome disclosures, but DRTV marketers are right to look puzzled. They have to slap up disclaimers both early and often. This seems more than a little discriminatory.

The Firebrand TV and web service launched to great fanfare last year as a model of branded entertainment -- that's where marketers agree that their usual stuff's boring, so they try to turn ads into programs that we want to watch. Unfortunately, this big idea attracted too few. NBC Universal told The New York Times that it isn't putting any more money into the venture. At last check the site was still live and show was still running. But without any more money, its fire is definitely flickering.