Germany's Product Placement Problem

"With carpets you have less dust, they absorb sound, they look impeccable and make it easier for children to take their first steps."

A line from a pamphlet advertising floor coverings? Hardly. Its a piece of dialogue taken directly from "Marienhof," an evening television soap opera that runs on Germany's publicly funded broadcaster, ARD. And the flooring-friendly text wasn't written by a screenwriter with a carpet fetish. The lines were proscribed by the Consortium of Textile Floor Coverings, and brought hard cash to Bavaria Film, the production company responsible for "Marienhof."

Journalist Volker Lilienthal recently researched the issue of product placement on German TV. He found that the daily soaps "Marienhof" and "In aller Freundschaft" have for years been systematically violating a section of the public broadcasting code that forbids the inclusion of unmarked advertising. The rule aims to reduce confusing viewers by commingling content and advertising.

In the meantime, Bavaria Film has admitted to having "cooperated with third parties" during production of the series. Proceeds were used "within the framework of additional development and further production."

Buying dialog

The so-called "active integration" of products in the show were brought about by H.+S. and Kultur + Werbung, two firms dealing in product placement that are run by an ex-actor named Andreas Schnoor.

In the mid 1990s, Schnoor got the Federal Ministry for Economic Cooperation and Development to shell out the equivalent of around 140,000 euros to the ARD hospital-based series "Klinik unter Palmen." In exchange, the characters happened to discuss German aid and development programs.

Treading a fine line

These days, the EU commission is showing particular interest in the use of disguised advertisement by publicly financed broadcasters; it is currently observing developments in which EU grievance procedures are pending on public broadcasters due to competition-distortion claims.

The question is: How far can the commercial activities of public broadcasters go? Thomas Gottschalk (photo), the host of the publicly-financed game-and-talk show "Wetten Dass...," sidelines as a spokesman for both candy company Haribo (maker of gummi bears) and the German Postal Service. Can he use these products in his popular Saturday night show?

He shouldn't, according to journalist Lilienthal. Already in 2004, Lilienthal published numerous examples of programs on publicly financed broadcaster ZDF -- Germany's "Channel Two", -- where advertisements had found their way into scripts. The criticisms prompted ZDF's Broadcasting Advisory Board to create a "10 point plan" toward combating the "creeping self-commercialization" of the broadcaster. Since then, observers have noticed a reduction in such borderline product placement.

Defining 'meaningful'

"Advertising disguised as content is forbidden, although product placement is allowed," said Peter Widlok of the Communications Commission for the State of North Rhine-Westphalia. "When the inclusion of a product is necessary or meaningful in terms of dramatic or content, there is absolutely no reason that a police commissioner on television can't drive a BMW."

The problem is defining what is meaningful use of a product and what is simply gratuitous advertising.

"Its not always possible to be certain whether something is deliberately or just incidentally in the picture," Widlok said.

Uncertainty in random test

Recently, state communications commissioners criticized an increase in product placement.

"In a random sample in February, questionable instances were found in ten cases," Widlok said. "We encouraged the responsible state communications commissions to take action."

In this case, action means allowing the broadcasters to respond in a statement to the accusations. Sanctions can only be used in a case where deliberate intent is proved. But that is rarely possible, Widlok said.

Ingeborg Zahrnt, a communications commission consultant in the state of Brandenburg, said the increase in product placement and disguised advertising is due to the raging crisis in the advertising industry.

Famous cases

"The private broadcasters are fighting against falling advertising revenues, and viewers tend to switch channels during long advertising segments," Zahrnt said. "So they have to get creative with their advertising."

Manufacturers have seen many a product placement success story over the years: In the 1967 classic film "The Graduate," Dustin Hoffman drove an Alfa Romeo, and the Italian carmaker immediately felt the results in the form of improved sales.

Since then, manufacturers have tried to get their cars used in films. Its not incidental that BMW cars have a star role in James Bond films. In 2004, Pepsi managed to get placed in seven blockbuster films. Computer maker Apple is especially active in the field; their computers have had 'bit' parts in films from "Independence Day" through "Garfield."

Like other large firms, Apple has its own division responsible for placing products in films and television shows. More recently, PR strategists have found another niche to aim for: computer games. In the virtual world, products can not only show up in the form of banner ads or logos, but they can become active props in the games themselves.

According to a study by market researchers TNS Emnid, 71 percent of games users say it is not a problem when they come across real name brand products in a game. On the contrary, one out of two players thought it made the game more realistic when actual brands were used. And realism is exactly what the gaming community is after.