Advertising merged with media content has rapidly developed from a new marketing tactics to the key marketing strategy on global scale. The reason for this was a constant search for marketers promoting brands, the constant search for more effective methods to establish an emotional connection with consumers.
The development of product placement in America and Asia is associated with the fact that the format of an integrated advertising has more opportunities than traditional advertising constrained by legislative restrictions.
In Europe, the amount of such advertising is growing more slowly because of strict rules of its placement.
In most countries, advertising integrated into media content is prohibited, but taking into account new trends of merging content with advertising it is difficult to definite it, and the practice of punishment for such advertising is not known. Scholars and analysts have not yet worked out the basic principles for identification all forms of integrated advertising in both information and advertisement fields (Galician 2004).
Thus, media integrated advertising is not labelled as such, placed under the guise of news, editorial or copyright material, presented as a private message or other non-promotional information.
Children are particularly exposed to such advertising, trying to imitate their idols and memorize everything related to them. And then in 10-15 years when the child becomes fully secured independent person, he will have established ideas that, for instance, BMW is a luxury car for successful people, Hilton is a super class hotel (Hackley 2008).
Main subjects of economic advertising activities are (Circus 2007):
Advertiser (legal or natural person who is a source of advertising information for production, positioning and subsequent distribution of advertising);
Advertisement producer (legal or natural person who fully or partially creates advertising information in the final form ready for distribution);
Advertisement distributor (legal or natural person carrying out the placement and distribution of promotional information by providing and using property, including tools for radio, television broadcasting, as well as communication channels, air time etc.);
Advertising consumers (legal or natural persons, who are given promotional information and correspondingly influenced by it).
The responsibility of advertisers, advertisement producers and distributors to consumers is defined by the criterion of guilt for the crime committed. Legislation regulates the responsibilities of the main subjects of advertising activity emerging with improper advertising, which can mislead consumers or harm their health, property, harm the environment or threaten one’s honour, dignity or business reputation.
Improper advertising is unfair, unreliable, unethical, obviously false advertising, violating the requirements for its content, time, place and method of distribution prescribed by the law (Plaisance 2008).
Unfair advertising is advertising that discredits legal and natural persons who do not use the advertised goods; contains incorrect comparison of the advertised goods with goods of other entities or persons, and also contains statements, images discrediting honour, dignity or business reputation of competitors; misleads consumers concerning the advertised product by simulating the project, text, advertising formulas, pictures, music or sound effects used in advertising of other goods, or through abuse of trust of individuals or their lack of experience, knowledge, including the lack of necessary information in the advertising (Plaisance 2008).
Advertising merged with media content also refers to improper advertising. It has an unconscious impact on the consumer’s perception, including influence through radio and television broadcasting, as well as special videos and other methods of hidden influence of advertising on consumers.
According to different scientists, advertising effectiveness is directly linked to the notion of influence on subconsciousness. When an advertising message is perceived on a subconscious level, consciousness gets “switched off” due to several characteristics: an advertising message is already known; it is broadcast quite often and finally stops surprising. Surely integrated advertising is more dangerous for the psyche of an individual, rather than direct advertising because it uses techniques breaking associations, settings, stereotypes and attitudes of the audience and aiming to impose new ones, not always having a humanistic nature. Scientists tend to consider the impact on subconsciousness to be the major aspect of the emergence of hidden advertising and media content merged with it.
In this aspect, it is actually impossible to forbid advertising to influence the subconsciousness at the legislative level. However, it is possible to go in an alternative route and determine what integrated marketing content is: finding out all possible mechanisms of production of such content makes it possible to introduce the norm of banning the impact on subconsciousness by those categories. Otherwise, this norm should be just removed as the one that is factually regulated in no shape or form (Harker 2000).
Recent trends in the Western legislation indicate the beginning of the gradual “legalization” of product placement and similar advertising technologies. The new version of the directive “Television without Frontiers” adopted by the EU has given two main areas for discussion. First, the proposed statutory definition of product placement as the any form of audiovisual commercial communication by means of using images or references to products, services or trademarks, so that a product or a trademark could be identified, with the payment of remuneration or other similar compensation. Secondly, the directive establishes a number of mandatory requirements, cases and conditions, under which product placement is legitimate and which make commercial communication recognizable in the media content, so that viewers get more protected from the usage of subliminal and surreptitious techniques (Hardy 2009).
Generally, product placement and similar indirect advertising techniques are prohibited. Their usage is possible only in cinematographic works, films and TV shows, sports and entertainment programs, as well as in cases when an advertiser pays not money but commodities, giving them as a prize or requisite. They cannot appear in programs for children. Cigarettes and other tobacco products, as well as medical products and treatment methods that require prescription cannot also be the objects of product placement.
In addition, such advertising should meet the following criteria: 1) its content and time of broadcast should not concern the independence of the media; 2) it should not directly influence the purchase of goods or services, in particular through the use of direct advertising slogans; 3) the consumer should be informed about the presence of product placement in a film or TV program at the beginning, at the end, and – in case of presence of commercial breaks – after each of them.
But the question is how to determine whether the integration of a product or trademark into an artistic work is organic. This question has no clear answer, and the decision is made on the basis of subjective factors, often requiring additional evidence (expert opinion or public opinion polls). However, there are also three conventional signs, helping determine whether the integrated marketing content is advertising or not (Hardy 2009).
The first one runs that if a product or trademark can be removed without prejudice to the artistic value, it is advertising, if not – it is an integral part, a creative element for the description of reality. The second mark examines whether the placement of a trademark has any promotional value, i.e. whether it promotes, increases interest to a product, trademark, manufacturer or seller. The third sign concerns the payment for placement: if the placement is paid for – this is advertising, if not ”“ a part of an artistic concept. Thus, in most cases product placement turns to be the full-fledged advertising (Plaisance 2008).
In this context, if such techniques are factually advertising, these tools should meet the same requirements as advertising spread in any other way. Moreover, taking into account the requirements of the law, the total duration of media advertisement cannot exceed 15% of broadcast time per an hour. The question of whether these requirements are applicable to films and shows with integrated marketing communication remains open.
The lack of a clear legal understanding of integrated content produces another very important practical problem, which is the uncertainty of contractual regulation. While current relationship between advertisers and advertising agencies are based on detailed and well-developed agency contracts, the issue relating the integration of advertising to the media content requires a contract, which is in practice ill-conceived (Harker 2000).
Service contract is often used as a contract for product placement. The obvious advantage of such contract for integrated advertising is that it is familiar for both lawyers and tax specialists; therefore, the chance of recognizing it economically unjustified and retraining into another type of contract is minimal. However, the major disadvantage of such contact is the inability to address all the individual features of relations existing in practice.
Integrated advertising is not just a service for advertising a product, but also the opportunity to promote it by means of the popularity of a film, publishing house or cinema hero. And it is almost impossible to fit all this into the framework of a standard service contract.
Another difficulty occurs with partnership and sponsorship agreements, which are also often used for integrated content. It is important to emphasize that although cooperation agreement is considered fairly common, tax authorities are paying much attention to it and for tax o purposes often reclassify it, taking into consideration real relationships. The most significant disadvantage of the sponsorship agreement lies in the fact that it is possible to mention about the person or company as a sponsor, but it is not allowed to require positioning of products in the content in the frameworks of sponsorship contract, which is more common in the practice of integrated advertising (Circus 2007).
Thus, media law comes across a number of serious difficulties in defining the area of marketing communication integrated into the media content. The legislation is still not perfect, and it factually cannot separate informational and marketing content under current conditions. However, the main purpose of media regulation namely lies in identification of the borders of advertising and of the level and mechanism of its influence on viewers.