AAF Comments on Proposed FCC Product Placement Study

January 17, 2008

To: AAF Members

From: Clark Rector Jr., Senior Vice President – Government Affairs

Re: Product Placement/"Embedded Advertising"

The Federal Communications Commission is currently considering whether product placement (or "embedded advertising" in their terminology) in television programming should be accompanied by a simultaneous disclosure.

The matter is currently circulating among the commissioners, meaning that if a majority sign on, it would go directly to a Notice of Proposed Rulemaking. While this does not commit the FCC to adopt a rule, and industry would have an opportunity to comment, it suggests a presumption by the agency that regulatory action is necessary.

The American Advertising Federation has joined with the AAAA and ANA to send a letter to the commissioners asking that the agency consider the action under a Notice of Inquiry. Given the significance, complexity and economic implications of the issue for free media, we believe the commission should conduct a closer examination of the issue to determine if any problems exist before considering possible regulatory solutions.

A copy of the letter is here. Please do not hesitate to contact me if you have any questions.