Product Placement and Embedded Advertising

A small wrinkled alien is lured inside a suburban house with a trail of sweets, leading to a warm, loving relationship with the human occupants.

Twenty-five years on, the candy trail in E.T.: The Extra-Terrestrial remains the classic example of product placement, which is the placement of a sponsored product or brand into entertainment content. E.T.'s favourite food, Reese's Pieces, enjoyed an estimated 60 percent surge in sales following the release of the movie, showing the power of a canny product placement.

Unlike traditional television commercials, product placement advertisements can't be avoided by channel surfing or technology that skips or filters out commercial breaks. As a result, it has been described as surreptitious, covert and deceptive. It is actually illegal in many European countries. Even in the United States, where product placement advertising is permitted, it must be disclosed if money changed hands. In contrast, product placement advertising in Australia is relatively unregulated.

In this article, we'll look at what regulation there is, and how advertisers can comply.

Specific prohibitions and controls

There are a few specific prohibitions and controls on product placement advertising in Australia. Product placement advertising for cigarettes and tobacco is prohibited in virtually every form of media. The ACT and NT have payola laws which make it a criminal offence to accept cash for comment. In other States and Territories, commercial arrangements between presenters of radio current affairs programs and their sponsors are permitted, but must be disclosed. This leaves a broad scope of product placement advertising that is and does not have to be disclosed.

Consumer protection laws - do they apply?

Advertisers engaging in product placement advertising will need to comply with consumer protection laws, just as they would for any other form of advertising. For example, if a business' advertising is misleading and deceptive then it will...