During the last decade, product placement has developed into a business with global revenues of several billion US dollars, with the bulk being generated in the United States. Product placement, sometimes also referred to as embedded marketing, occurs when references to goods or services are incorporated into another work, such as a television program, in order to promote the same.
In Germany, product placement has only been permitted by law for a few years. It is still highly controversial and is associated with persuading viewers to perform certain actions subconsciously. This somewhat negative image is connected to the fact that the prohibition in place until 2010 was frequently circumvented. Product placement struck many viewers as especially inappropriate on public television, which is financed with broadcasting fees paid by German citizens.
The European Directive on Audiovisual Media Services
The European Commission addressed the subject of product placement in the mid-2000s because this form of advertising did not have a legal framework in Europe. The European Directive on Audiovisual Media Services (Directive 2007/65/EC, codified by Directive 2010/13/EU, (AVMS-Directive)) differentiates between surreptitious (unmarked) audiovisual commercial communication and (marked) product placement. While both are in principle prohibited (Art. 9(1)a AVMS-Directive; Art. 11(2) AVMS-Directive), the Directive provides for optional exceptions to the prohibition with respect to product placement.
Unless a member state decides otherwise, product placement is admissible in: cinematographic works, films and series made for audio visual media services, sports programs, and light entertainment programs; and where there is no payment but only the provision of certain goods or services free of charge, such as production props and prizes, with a view to their inclusion in a program.
However, programs that contain product placement need to meet at least all of the following requirements:
The German Interstate Broadcasting Treaty
- Their content and, in the case of television broadcasting, their scheduling, shall in no circumstances be influenced in such a way as to affect the responsibility and editorial independence of the media service provider;
- They shall not directly encourage the purchase or rental of goods or services, in particular by making special promotional references to those goods or services;
- They shall not give undue prominence to the product in question; and
- They shall clearly inform viewers of the existence of product placement by identification at the start and the end of the program as well as after an advertising break.
In 2007, the member states of the European Union were required to implement the provisions of the AVMS-Directive into domestic legislation. They were, however, granted a great deal of leeway in the implementation. Instead of incorporating the provisions into domestic legislation as a whole, legislators could choose to adhere to the prohibition of product placement. Germany transposed the Directive with the 13th amended version of the Interstate Broadcasting Treaty, which entered into force in April 2010.
Since the entry into force of this treaty, German law has also differentiated between surreptitious (unmarked) audiovisual commercial communication and (marked) product placement. Surreptitious audiovisual commercial communication is still prohibited without any exception. However, with respect to (marked) product placement, Germany adopted the exceptions to the prohibition, as optionally provided for in the Directive, almost completely for private broadcasters and to a more limited extent for public broadcasters.
According to Section 7(7) of the Interstate Broadcasting Treaty, surreptitious advertising, product placement, and thematic placement and similar practices are prohibited. Sections 15 and 44 allow product placement in broadcasting in: cinematographic works, films and series, sports programs, and light entertainment programs, unless they are children’s programs, and—in the case of public service broadcasting—which are not produced by the broadcaster itself or produced or commissioned by an affiliated company; or where there is no payment but only the provision of specific goods or services free of charge.
German law sets out the following additional requirements:
- Editorial responsibility and independence concerning content and scheduling must not be prejudiced;
- The product placement should not directly encourage the purchase, rental, or lease of goods or services; in particular it should not contain special promotional references to such goods or services;
- The product should not be unduly prominently placed—this also applies to low value goods provided to the film producer free of charge; for example, a lipstick provided by the brand owner without payment by the film producer would be forbidden from being unduly prominently placed; and
- There has to be clear information indicating that product placement is taking place at the beginning and at the end of a program as well as after an advertising break.
Since 2010, private broadcasters in particular have tested these limits, determining which types of placements are allowed.
Court Decisions so Far—Jungle Camp and Men’s Camp
Since the enactment of the amended version of the Interstate Broadcasting Treaty, there have only been a few judgments dealing with the limits of product placement. In February 2016, a judgment was issued which deals with the placement of the Pick Up! chocolate bar by Leibniz Bahlsen in the RTL television network’s well-known show “Jungle Camp” (Hanover Administrative Court, 18.02.2016, 7 A 13293/15) under the aspect of compliance with the “prohibition of excessiveness” as laid down in Article 7(7), sentence 2, no. 3, of the Interstate Broadcasting Treaty. This provision requires that, for product placement to be permitted, the product shall not be unduly prominently placed. This judgment specifies the principles established by the German Federal Administrative Court in the Hasseröder Men’s Camp
judgment (23.07.2014, 6 C 31.13) with respect to the “prohibition of excessiveness.” The decisions are examined in more detail below.
Men’s Camp—Staying Within the Limits
In the Hasseröder Men’s Camp
decision, the German Federal Administrative Court dealt with the “prohibition of excessiveness” in the context of the German private broadcaster SAT.1’s transmission of the final of the UEFA European Champions League. Before and during the game, SAT.1 presented its cooperation partner, Hasseröder, a German beer brewer, by creating a live connection to a so-called men’s camp named after the brand name HASSERÖDER.
The brand name HASSERÖDER was visible in the short, live transmissions and as lettering on the wall of the room in the background. The trademark was mentioned repeatedly. During the two live connections, the phrase “supported by product placement” and the symbol “P” were displayed on the screen for eight seconds, next to the transmitter’s symbol.
The competent authority complained about the product placement based on Section 44, Article 7(7), sentence 2, no. 3, of the Interstate Broadcasting Treaty. The Federal Administrative Court was of a different opinion and held that Article 7(7), sentence 2, no. 3, does not forbid the advertising purpose of the product placement from being clearly identifiable in the course of the transmission.
The design of the program does not have to exclusively follow editorial criteria as long as an appropriate balance is maintained between advertising and editorial matters. For this balance to be affirmed, the advertising purpose must not dominate the broadcasting process in such a way that the natural course of action slips into the background. Whether this is the case has to be determined according to the number and the length of the product presentations and the overall context.
According to the court, additional requirements apply if a certain storyline is included solely to create the opportunity for product placement. This is permitted only where the storyline has references to the editorial broadcasting concept, and where the product placement fits into the rest of the broadcast’s content.
The Federal Administrative Court did not consider SAT.1 to have exceeded the limits of the permission for product placement by creating live connections to the camp during and in advance of the transmission of a football game. The interviews mainly concerned the football game which was being broadcast that evening. Neither the product nor the emblems of the brewery had been artificially emphasized by the camera, and they did not impede the interviews.
The live TV link up to a social gathering of people who get together to watch a football game was considered to conceptually fit into the transmission of the football game. Furthermore, the court considered that football viewers would be used to encountering commercially motivated presentations to the extent that a wider benchmark could be applied when compared with other broadcasts.
Jungle Camp—Chocolate Cookie Bars
In the Jungle Camp
judgment, the Hanover Administrative Court dealt with the “prohibition of excessiveness” in connection with the placement of the Pick Up! chocolate bar by Leibniz Bahlsen in RTL television network’s well-known TV show “Jungle Camp.”
In the show, celebrity contestants live in a camp in the Australian jungle for up to two weeks. Contestants are constantly monitored by TV cameras, receiving no stage directions at all. They receive only 70 grams of rice and beans to eat daily. They can earn some extra food as a reward for successfully passing tests. In the film sequence that was objected to (approximately 90 seconds long), the contestants received a treasure chest filled with Bahlsen’s Pick Up! chocolate cookie bars as a reward.
When opening the treasure chest and in interviews, which were apparently recorded after the scene, the contestants showed their delight by making statements such as:
- “You don’t even know how to appreciate the little things in life once again. This taste is a bombshell.”
- “The sweet chocolate was absolutely a dream. I would have liked to eat all five bars at once, I must confess.”
- “Awesome, rocking, tasty,” “Yummy,” “Wicked!”
- “It was really fantastic. I would just like more.”
- “This really has got it all: caramel, chocolate, and biscuit. What more do you want?”
The camera showed the contestants enjoying the consumption of the chocolate cookie bars, in part followed by groaning, as well as cheering. The presentation was reinforced by slow-motion elements and gentle background music. The product packaging was shown five times, with the camera zooming in on its lettering.
Not Just Incidental
The court considered this presentation of the Pick Up! chocolate cookie bar to be excessive within the meaning of Article 7(7), sentence 2, no. 3, of the Interstate Broadcasting Treaty.
The court stated that the entertainment concept of the Jungle Camp consists in contestants being monitored while coping with extreme situations. The showing of the reward, here the treasure chest with Pick Up! chocolate cookie bars, still conformed to this plot. In the disputed program, however, the natural storyline was considered to have moved into the background as compared to the advertising purpose and the placement of the product was held to have been afforded too wide a scope. The product packaging alone appeared five times and the statements of the contestants seemed like advertising statements since they referred exclusively to the product. Therefore, the court considered the advertising effect not only incidental, but held that the product was unduly prominently placed.
The court also stated that, in contrast to viewers of sporting events, viewers of Jungle Camp were not confronted with a large number of promotionally motivated presentations; therefore, in evaluating whether the prohibition of excessiveness was violated, no broader standard should be applied than in other broadcast formats.
The court emphasized the Federal Administrative Court’s finding in Hasseröder that additional requirements apply if a certain storyline is included in the broadcast only to create the opportunity for product placement. Inclusion is only permitted where:
Defining Undue Prominence
- The storyline included has references to the editorial broadcasting concept; and
- The product placement fits into the rest of the broadcast’s content.
One of the conditions of permitted product placement is that the product does not receive undue prominence, which also applies to low-value goods provided to the film or television show producer free of charge. The prominence of a product is undue where the advertising purpose dominates the broadcast event; that is, the editorial sequence of events slips into the background when compared with the product. Whether this is the case needs to be determined by the number and length of the product presentations and the length of the remaining broadcast. Undue prominence is not automatically given where the presentation is not justified by the program’s editorial requirements.
In the Jungle Camp
judgment, the court considered the placement of the chocolate bar to be a violation of the “prohibition of excessiveness” governed by Article 7(7), sentence 2, no. 3, of the Interstate Broadcasting Treaty.
When considering the placement of brands, the following points need to be observed:
- The product presentations should not be predominant in number and length, such that the natural storyline moves into the background relative to the product presentations;
- The product presentation should not appear as a foreign element; it should only partially co-direct the broadcast and should not interrupt its flow; and
- The product presentation needs to have a meaningful relationship to the concept of the editorial broadcast; it should not be completely detached from it.
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