Published Articles

September 15th, 2003

Do You Have to Tell Consumers That It’s “Advertainment”?

Marketers are increasingly looking to "advertainment" projects in the hope that they will be a more effective way to connect with consumers. These are not run-of-the-mill product placements and ordinary sponsorships, but a hybrid of entertainment and advertising, where the advertiser not only sponsors the project, but has creative control as well. While the use of entertainment properties primarily as advertising vehicles presents new opportunities, it also raises challenging legal questions.

One reason why "advertainment" projects are so enticing to marketers is that they may break through the clutter and reach jaded consumers without those consumers even realizing that they have been exposed to advertising. But is that fair? Is it legal? When can advertisers create "advertainment" without disclosing their involvement?

Although there are no easy answers, both government and the media have provided some guidance about how these issues ultimately will be resolved.

The FTC and the FCC

About a year ago, the staff of the Federal Trade Commission – the main federal agency that enforces the nation’s consumer protection laws – told a number of Internet search engines that consumers have a right to know when they are being advertised to. Without disclosure of advertiser involvement, how can consumers accurately evaluate what they are watching?

The FTC was responding to a complaint alleging, in part, that some search engines were displaying search results that included paid insertions, without adequately disclosing the sponsorship. Although the FTC didn’t take enforcement action, the FTC staff did advise search engines that the failure to disclose paid placements adequately "deviates from the established deception principle of clearly distinguishing editorial content from advertising content."

This wasn’t the first time that the FTC warned advertisers about this. The FTC has long told infomercial marketers that it is deceptive to misrepresent that an infomercial is actually programming, and that they should include disclosures such as "the program you are watching is a paid advertisement." The FTC also told a book publisher that using an advertisement, that actually looks like a real book review, is a deceptive practice.

The Federal Communications Commission – the main federal agency that watches over the nation’s airwaves – also generally requires broadcasters to disclose who is sponsoring a commercial or even a product placement. (Cable companies have historically been treated differently.) Not surprisingly, the FCC has said that the broadcast of subliminal advertising is deceptive as well.

Media action

Many in the media have reached similar conclusions. In addition to requiring sponsor identification (as mandated by the FCC), the major television networks place limits on some techniques that advertisers may try to use to confuse the distinction between advertising and programming.

Networks commonly restrict the use of news simulations, horizontal crawl supers across the bottom of the screen, and the use of language like "we interrupt this program." In response to last summer’s uproar over the airing of celebrity interviews, during which their medical problems (but not their ties to drug companies) were discussed, some stations have said that they will now disclose these ties.

So, disclose?

Disclosure of advertiser support is not universal, especially as advertisers try to find better ways to reach consumers. There are also many situations -- an obvious product placement, for example -- where advertisers may not feel that disclosure is necessary. But with many in government and the media saying that consumers have a right to know when they are being advertised to, when an advertiser creates "advertainment," a clear disclosure of advertiser involvement is always going to be the safer bet.

Wrestling with these disclosure issues is only the tip of the iceberg. We haven’t even begun to address the truth-in-advertising and intellectual property challenges that arise when creating "advertainment." But more on that in future columns.

- Jeffrey A .Greenbaum

This article first appeared in the September 2003 issue of SHOOT magazine. It presents a general discussion of legal issues, but is not legal advice, and may not be applicable in all situations. Consult your attorney for legal advice.