The FCC’s Sponsorship Identification Rules: Ineffective Regulation of Embedded Advertising in Today’s Media Marketplace

I. INTRODUCTION II. EMBEDDED ADVERTISING: DEFINING THE PHENOMENON III. DEVELOPMENT OF EMBEDDED ADVERTISING: A MAJOR SHIFT IN THE ADVERTISING MAINSTREAM IV. SPONSORSHIP IDENTIFICATION REGULATION AND ITS CURRENT INABILITY TO REGULATE A. Historical Background. B. Current Regulation and Why It Fails C. Call for Change--Potentially V. CONFLICT AND THE NEED FOR CHANGE A. Conflict Overview B. Critics' Views of Increased Regulation C. Negative Consequences of Embedded Advertising VI. CONCLUSION I. INTRODUCTION The advertising industry increasingly relies on embedded advertising in the contemporary media landscape to reach consumers. The scope of embedded advertising in today's marketplace raises significant concerns and complicated First Amendment questions regarding the type of regulation needed to best suit the interests of all parties concerned. While many critics argue that increased sponsorship identification regulations would inhibit First Amendment fights and harm the modern consumers' viewing experiences, this Note argues that the negative consequences stemming from embedded advertising are far more threatening than any potential negative consequences that the increased regulation might have on First Amendment rights and the interests of venture consumers. Thus, this Note contends that the FCC needs to revise its sponsorship identification rules to address the growth and implications of embedded advertising in the contemporary media landscape. Part II of this Note defines embedded advertising, providing insight into exactly what this phenomenon is today. Part III describes the development of embedded advertising and its effect on the advertising mainstream. Part IV outlines the history of sponsorship disclosure law and its inability to regulate in the current media marketplace and discusses the FCC's 2008 Notice of Inquiry ("NOI") and Notice of Proposed Rule Making ("NPRM") regarding the potential revision of its sponsorship identification rules. Part V identifies criticism facing increased regulation of embedded advertising. Part VI concludes that the FCC needs to revise its rules to avoid the numerous undesirable consequences caused by embedded advertising today. Revising the law to more effectively regulate within the current media mainstream would better serve society's interests as a whole. II. EMBEDDED ADVERTISING: DEFINING THE PHENOMENON Carrie Bradshaw typed her weekly column on a Mac, while she dreamed of Manolo Blahnik Mary Janes in the hit series Sex and the City. (1) In the film Demolition Man, the character Lenina Huxley explained that the only restaurants in 2032 are Taco Bells, which won the franchise wars. (2) And on 30 Rock, after discussing the virtues of Verizon Wireless, Liz Lemon looked straight into the camera and asked, "Can we have our money now?" (3) Embedded advertising can take many forms, but it is generally defined as the inclusion of sponsored brands into entertainment media content. (4) "Product placement" and "product integration" are the two terms used most interchangeably with embedded advertising. (5) While both refer to embedded advertising, product placement and product integration are two distinct advertising practices. Broadly defined, product placement is the insertion of "branded products into programming in exchange for fees or other consideration." (6) Narrowly defined, product placement is the placement of a visual or aural reference to a commercial product, brand, or service in media content as a prop. (7) Product integration is the prominent positioning of a commercial product, brand, or service into media content. (8) Instead of a mere glimpse of or reference within the program, the product, brand, or service is substantially integrated into the storyline of the program in exchange for consideration or another anticipated benefit. …