FCC to consider new rules for "embedded" TV ads

By Peter Kaplan

WASHINGTON (Reuters) - U.S. regulators are expected to take the first step this week that could rein in advertisers' growing use of product placements on television shows, two sources close to the agency told Reuters on Monday.

The Federal Communications Commission will vote to study whether TV shows should carry more conspicuous notices informing viewers when advertisers paid to have food, automobiles and other products prominently displayed during programs, the sources said.

The issue of so-called "embedded advertisements" is a concern of consumer groups and some lawmakers in Congress.

In 2007, there was a 13 percent increase in the number of product placements in prime time network programming, a coalition of 23 consumer and health advocacy groups said in a letter to the FCC.

"We must not allow television programs to become Trojan horses, carrying messages that would otherwise be criticized by the public or even deemed illegal," wrote the coalition, which includes Public Citizen and the Parents Television Council.

They also expressed concerns that current FCC rules do not address a related tactic known as "product integration" which weaves product promotions into the script of a TV program.

The issue has been on the FCC's radar screen since last year.

In a September speech, FCC Chairman Kevin Martin said programmers were turning to embedded advertising because many viewers now use TiVos and digital video recorders to skip over traditional ads.