Is it an Ad or a Prop?

Is that bag of potato chips in a TV actor’s hand simply a prop, or a sneaky way to advertise? Right now, there’s no way to tell, and the public is increasingly seeing products popping up in television shows long before commercial breaks.

Product placement is the growing practice that allows advertisers to insert a product into the storyline of a show as another form of marketing. The FCC is  considering whether it should strengthen its sponsorship identification rules, and last week Free Press submitted comments to the Commission asking for greater transparency when product placement – also known as embedded advertising – is being used.

Even though these practices are deceptive more companies are resorting to embedded advertising because it is an effective method of reaching customers. According to Nielsen Media Research, more than 5,100 embedded ads appeared on network TV in 2007, a 13 percent increase from the previous year. Advertisers also spent $2.9 million in product placements in TV and films in 2007, up 33.7 percent from the previous year.

Embedded advertising goes against the FCC’s established policy of transparency and is inconsistent with the Commission’s goals of ensuring that viewers are conspicuously informed of all sponsorship of the programming they watch. Viewers watching their favorite TV programs do not know when an embedded ad appears unless they watch the fine print on the closing credits at the end of each show.

Prominent Disclosure of Embedded Advertising

The Commission’s current rules are not sufficient to address the growing use of embedded ads because the media landscape has changed the techniques advertisers are using to reach consumers.

The 1934 Communications Act adopted sponsorship identification regulations in an effort to “protect the public’s right to know the identity of the sponsor when consideration has been provided in exchange for airing programming.” But these decades-old rules must be amended to reflect the need for greater transparency for current ad practices.

Embedded advertising practices cannot be examined independent of recent controversies surrounding the use of video news releases (VNRs) by the government and corporations to deceive the public. Free Press has been active in opposing the use of VNRs that do not clearly bear the disclosure of their sponsors.

Advertisers have adopted embedded advertising techniques because the ads exploit the “emotional connection” a character or a program has with a viewer. But television viewers should not be subjected to hidden and subliminal ad messages. The public has a right to know when someone is making an attempt to sell them a product.

Free Press supports the recommendations of the Writer’s Guild of America, West for simultaneous disclosure whenever an embedded ad appears in a program. The disclosure would appear on a crawl on the bottom third of the TV screen with the name of the embedded product featured in readable text. At the very least, the Commission should adopt the Commercial Alert’s recommendations that call for clear verbal and visual disclosures at the beginning of segments that an embedded ad appears, as well as at the outset and end of the program that explains “the nature of the hidden advertisement.”

Children Deserve Further Protection from Embedded Ads

Although the FCC has banned embedded advertising in children’s programming, Free Press supports strengthening the current sponsorship identification rules on kids’ shows. The Commission should codify its rules and explicitly prohibit embedded ads on all children’s programming, enforcing the ban that currently exists.

As the Campaign for a Commercial-Free Childhood (CCFC) has stressed, direct marketing to children is harmful and is a factor in the rise of childhood obesity as well as other health risks and social disorders.[1]  One disturbing example noted by CCFC was a study that asked kids to choose between receiving a chocolate bar or a head of broccoli.  It should come as no surprise that 78 percent of children selected the chocolate bar.  But that figure changed once a sticker of the Sesame Street character, Elmo, was placed on the broccoli.  Half of the children chose to pick the Elmo-labeled broccoli, demonstrating the effect persuasive power of advertising on children.

The Commission should also extend the ban on the use of product integration to primetime programming watched by children. Children watch family-oriented programming with their parents and siblings. Parents should not have to worry about exposing their children to insidious advertising techniques. Yet family-oriented programming contains a significant number of embedded ads. “American Idol,” referred to by the CEO of NBC Universal as “the most impactful show in the history of television,” featured more product placements than any other show on the small screen. Even if the Commission passed rules calling for simultaneous disclosure, it would not protect children who are unable to understand their meaning. The Commission must extend the embedded ad ban on children’s programming to primetime, family-oriented programming watched by children.

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Journalism by Press Release

With thousands of journalists losing their jobs, how are the media filling all those column inches?

Press releases.

As media companies buy up more media outlets and slash newsroom budgets and staff, reporters have less time to do their jobs, often resorting to writing entire stories based on a press release alone, and sometimes printing stories that mirror an organization or agency’s exact press statement.

It seems actual reporting is becoming something of an anomaly, and especially in science coverage, according to ongoing analysis by MIT’s Knight Science Journalism Tracker. Charles Petit, a veteran science reporter who runs the Tracker, has found an alarming number of newspapers running stories based only on press releases.

“What is distressing to me is that the number of science reporters and the variety of reporting is going down. What does come out is more and more the direct product of PR shops,” Charles Petit told the Columbia Journalism Review.

Press releases should used as a tip, or a starting point, to begin investigating a story. Crafting questions, finding holes in data, reaching beyond the press contact – that’s where the true journalism lies. As Petit told CJR, science news “spoon-fed” to reporters via press releases “become a powerful subversive tool eroding the chance that reporters will craft their own stories.”

What’s worse, many newspapers aren’t fessing up to their press release plagiarization, leaving readers unaware that the story they’re reading came straight from the pen of a PR flack.

While Petit is monitoring science journalism, the practice of presenting fake news as as the real thing has infiltrated local television news across the country.

A 2006 investigation by Free Press and the Center for Media and Democracy revealed that stations are slipping corporate-sponsored “video news releases” — promotional segments designed to look like objective news reports — into their regular news programming. This deception is illegal under FCC rules.

A series of CMD investigations have caught 113 local stations airing the so-called VNRs without proper disclosure. Free Press and CMD have filed complaints with the FCC, urging the agency to take action against all stations that have violated sponsorship identification rules. So far, the FCC has fined only one cable channel for airing fake news.

And just why have television stations resorted to airing VNRs? Runaway media consolidation has squeezed TV newsrooms, too, which are trying to fill more hours with fewer reporters.

If we want to stop junk journalism, we need to start at the top with the owners of our media.

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Bloodletting in the Newsrooms

The news keeps getting worse for newspaper journalists and the communities that depend on their daily papers for local coverage. Across the country, newspapers are trying to maintain their high profit margins by slashing newsroom jobs and news coverage.Last month, the Star-Ledger, the largest newspaper in New Jersey, became the latest paper to scale back its newsroom operation. The paper announced plans to lay off 40 percent of its staff. The Los Angeles Times laid off another 75 journalists. Since 2001, the Los Angeles Times has gutted its newsroom, cutting staff from 1,200 to 660. Gannett, a company that owns 85 daily newspapers, said it would lay off 10 percent –  or 3,000 – of its newspaper employees. Meanwhile, Time Warner Inc., the world’s largest magazine publisher, plans to lay off 600, or 6 percent, of its magazine employees.

Dean Singleton, the CEO of Media News Group, one of the largest newspaper owners in the country, recently told a publishing group that he may consolidate copy-editing desks at his 54 newspapers to one location to cut expenses. He is even entertaining the possibility of moving all copy-editing operations overseas, something at least two other publications have already begun doing.

While my heart goes out to all the journalists who have lost their jobs and to the communities being affected by reduced news coverage, it is hard to feel sorry for the newspaper industry, where greed and profit have led to the situation we see today.

Astonishing Cuts

Over the past year, newsrooms have been bleeding journalism jobs. UNITY: Journalists of Color reported recently that an astonishing 2,415 newsroom jobs have been lost since September 15. The Project for Excellence in Journalism estimates that newspapers have cut about 10 percent of newsroom jobs — 5,500 positions — this decade.

The latest announcements come as newspaper circulation and ad revenue continue to slide. A recent Audit Bureau of Circulations report found that circulation for daily newspapers dropped close to 5 percent over a six-month period that ended in September 2008. Newspapers in larger cities have been the hardest hit. Circulation at the Los Angeles Times fell by 5 percent; the Chicago Tribune, 7.7 percent; the Boston Globe, 10.1 percent; The Philadelphia Inquirer, 11 percent; the Philadelphia Daily News, 13.2 percent; and the Atlanta Journal Constitution, 13.6 percent.

Meanwhile, the Newspaper Association of America (NAA) expects total ad revenue for the industry to drop by 11.5 percent this year.

Greed and Profit

The Internet has transformed the media industry and how the public consumes news. More people are reading their local newspapers online than ever before. Online ad revenue grew for 17 straight quarters until its recent decline. Nevertheless, the NAA expects online ad revenue to continue its growth next year.

Despite the changing industry, newspapers remain extremely profitable. The Project for Excellence in Journalism (PEJ) reported that the average pre-tax profit margin for newspapers was 18.5 percent in 2007. Some newspaper profits remained above 20 percent. “The industry remains profitable, but it has come time to take the ‘obscenely’ out of that commonplace observation,” PEJ said in its annual State of the News Media report.

But the majority of newspapers are publicly traded companies for which any decline in profits is unacceptable. As a result, newspapers are trying to please Wall Street by axing jobs and scaling back coverage.

With fewer reporters on the beat — and less quality local coverage — it’s no wonder people aren’t subscribing to the paper. While these cuts may please stock analysts, they harm the public. There are fewer journalists covering the business of government at city halls and state capitals across the country. Media companies are closing their Washington and foreign bureaus, while the number of lobbyists pushing the legislation agendas of their corporate clients at the local, state and national levels has increased under the diminishing watchdog eye of the Fourth Estate.

Failure to Adapt

What is rarely discussed is that media consolidation and a lack of leadership within the newspaper industry have resulted in the newspaper industry contributing to its revenue decline.

Too many executives were slow to embrace the Internet as part of their newspapers’ business models. It was just last year that PEJ reported that mainstream media had began to show a serious commitment to growing online ad revenue.

Media consolidation has also resulted in a handful of newspaper chains that are owned by publicly traded companies. Major chains like Times Mirror and Knight Ridder were swallowed up in recent years by other chains. Companies like Tribune and Media News are reducing their staff to pay off their debt for going on a merger spree.

To help ease their debt burden, the industry has turned to the FCC to bail them out by deregulating the industry to allow newspapers to purchase a TV or radio station in the same market, a station that has most likely maintained “obscenely” high profit margins. Last year, the FCC voted to lift the newspaper-broadcast cross- ownership regulation that helped to protect media diversity, competition and localism for more than 30 years. The proposed new rules include gaping loopholes that would allow for consolidation in potentially every media market in this country. The new rules are currently being challenged in court.

If upheld, journalists should expect more layoffs, and the public should see a declining commitment to news as newspapers take on greater debt to please their Wall Street investors.

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A Blow to Big Media’s Internet Claims

Big Media’s favorite scapegoat is the Internet. In broadcasters’ attempts to convince the Federal Communications Commission to allow them to increase their media holdings, they cry that the Internet is stealing their viewers.

For instance, in appealing to the FCC to lift the ban on cross-ownership, the National Association of Broadcasters (NAB) said: “Internet users, especially broadband Internet users, are turning to the Web as a supplement and replacement to traditional television, radio and the newspaper.”

The argument was one of the central themes when the FCC capitulated to Big Media in 2003 and gave the green light to more media consolidation. But while Big Media has failed to provide any specific evidence to backup their assertion, a new study released last week by Nielsen reveals what consumer groups have long been arguing: Consumers do not use the Internet as a substitute to traditional television watching but as a complement.

Nielsen, the company that decides the ratings for television shows, installs equipment on TVs to track the nation’s viewing habits. Nielsen recently implemented a program to also track Internet usage in these same households and found that “television viewing and online video streaming are complementary activities.”

“The top fifth of Internet users spend more than 250 minutes per day watching television, compared to 220 minutes of television viewing by people who do not use the Internet at all,” the findings say. Nielsen said there is a significant amount of simultaneous TV and Internet usage.

Nielsen’s conclusions echo the evidence put forth by consumer groups. Using the FCC’s own data, Free Press illustrated last year that at most one hour of Internet usage results in a less than two-minute decrease of television viewing.

The discovery by Nielsen is just one more brick in the towering skyscraper of evidence illustrating that the last thing we should allow is more media consolidation, and the last entity we should trust to base policy on fact is Big Media.

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