Claire Atkinson of Advertising Age reports that Channel One's financial woes stem from the reluctance of Kellogg's and Kraft to advertise with the in-school commercial television news network. Channel One has been controversial, because it uses schools as a venue for advertising to a captive audience of children. Atkinson quotes the outgoing CEO Jim Ritts: "We took a big hit from Kellogg and Kraft." Parent company Primedia said, "The concern by certain advertisers about the obesity issue in schools caused them to stop or reduce advertising in schools." See Commercial Alert for the full story.
In a second news item, the Federal Trade Commission has denied a request by Commercial Alert to require television shows to identify product placements, the practice in which the producers are paid to display commercial products. However, the most interesting thing about the FTC's letter to Commercial Alert is how weakly it defends product placement. It says the product placements may mislead consumers. Plus, it essentially lays out a research agenda, which if completed, might convince the FTC that surreptitious product placements are against current law. In essence, somebody would have to show that product placements are effective -- that they cause people to believe something favorable about the products. Since advertisers spend millions on the assumption that this is true, and the advertisers are no dummies, I suspect such research should be feasible to do.
[Update -- I just noticed the second "news" item should have been called an "almost as good as news" item. It is a February story that somehow appeared today in my Bloglines feed from Commercial Alert.]