As part of its review of the Television Without Frontiers directive, the European Commission asked commentators to look at new TV advertising techniques and how to regulate them.
Who: The European Commission, Carat Crystal and Bird & Bird
When: October 2002
The EU "Television without frontiers" directive set a variety of regulatory benchmarks for TV advertising across the European Union. Thirteen years on, however, it is creaking and the EU is in the process of re-examining the directive with a view to formulating proposals to adapt it in line with changes in broadcasting techniques.
As part of that process, the European Commission arranged a study on the development of new TV advertising techniques.
Particularly focused on in the report are interactive advertising, the "split screen" technique and virtual advertising. None of these, however, and no other development noted in the report lead the authors to recommend major changes to the current directive on this account or on account of "convergence". More appropriate, as the report suggests, would be clarifying the application of the directive or amending it to a moderate extent, without seeking to formulate a completely new directive applicable to all media.
So far as the split screen technique is concerned, the report notes that many member states including the Netherlands, Portugal, Sweden and France ban this technique, whilst other countries such as the UK and Germany have authorised it. The report suggests that the situation be liberalised so that across the European Union the split advertising technique is permissible. This would be on condition that there was always spatial separation between the advertising and the programme in question, for instance by way of two discreet screens within the main screen.
So far as virtual advertising, or what the report alternatively calls "virtual sponsorship" is concerned, it is noted that this is banned in Italy, France, Portugal and Norway, whilst the UK and Germany specifically authorised it and in Greece and Spain, whilst there are no specific rules on the subject, it is tolerated.
The report takes the position that provided consent is obtained from the holders of rights in events where the or technique is used, there would seem to be no fundamental problem with allowing this practice across the Union
In a separate section, the report focuses on rules relating to the length and frequency of advertising breaks. It bemoans the differing rules that apply in this area across the EU and the complexity that results from this. In its recommendations it advocates simplification.
When it comes to sponsorship, the report highlights the many different types of sponsorship currently used in the European Union. These include bill-boards, sponsoring spots, break-bumpers, consumer competitions, trailers, and "mentions", all of which are very highly valued in their own way.
Also highlighted are the variety of differing regulations that apply to these methods, depending on which EU country is involved. However, the report does not appear to consider that further radical changes to the directive are needed on this account.
Product placement is also looked at briefly and the "taboo" that surrounds this form of advertising on TV is noted. The report notes, however, that this technique is widely used in other media such as the cinema and the internet, and as the possibilities for product placement on television become ever more numerous, the report does suggest that it would be appropriate to consider whether it might be opportune to legalise use of product placement on TV subject to certain conditions.
So far as interactive advertising is concerned, the report records that this enables the viewer to provide information directly to the broadcaster/advertiser thanks to a return path. The technique is used on digital television and also in environments other than broadcasting, for example the internet or mobile telephony. The Television Without Frontiers directive does not apply to the internet or mobile telephony, but other directives do apply in these areas.
In the television context, the question asked is the extent to which the current Television Without Frontiers Directive applies to interactive advertising on digital television. The main problem in terms of regulation is related, the report comments, to the fact, that, "tele-viewers" who use interactive applications deliberately leave a linear televised programme to enter an interactive (commercial) environment.
At this point, the current Television Without Frontiers Directive ceases to apply, and the report's concluding recommendation in this area is that this should continue to be the case. In other words, the regulatory position up to the point at which the consumer clicks to go out of the television environment would be regulated by a regime similar to that currently applied by the UK's own Independent Television Commission. Indeed, the United Kingdom is apparently the only EU member state with specific regulations for interactive advertising, and even this is more in the nature of a guidance note addressed to broadcasters to enable them to apply the existing rules to interactive television. It is the approach adopted by these guidelines, emphasising the importance of clear separation between advertising and television programmes, for instance by way of the split screen technique, and the need to ensure that the nature of the various types of content is always transparently clear to the television viewer.
For instance under the ITC guidance note, the television viewer must not be directed straight from a linear television programme to pure commercial content. The first click on a neutral interactivity button must lead the viewer to an intermediate stage containing at least 50% editorial content. This content (for example the television programme present on part of the screen) can be surrounded by commercial content or links and the second click on that link would then take the television viewer to the strictly commercial content, which could be the website of an advertiser.
Why this matters:
Such have been recent developments in television advertising techniques that this review was clearly timely. However, as the report indicates, the current depressed state of Europe's advertising market generally has slowed their rate of development.
In consequence, the report does not feel that, at least for the next 5 to 7 years, there is any desperate need for radical change to the TV Directive, for instance to extend its ambit so as to become media neutral. As a result, the recommendations of the report are very limited and quite conservative and are probably of less general interest then the "state of the nation" parts of the report. These give an interesting snapshot of the state of European television advertising in Europe as we move further into the first decade of the 21st century.