Friday, August 01, 2008

New FTC Report on Kids' Food Advertising

Via Kevin Freking and the Associated Press, news this week of a new report conducted by the FTC on the status of food and beverage marketing to children and teens. The report, entitled Marketing Food to Children and Adolescents: A Review of Industry Expenditures, Activities, and Self-Regulation, found that (cited from the press release):
44 major food and beverage marketers spent $1.6 billion to promote their products to children under 12 and adolescents ages 12 to 17 in the United States in 2006. The report finds that the landscape of food advertising to youth is dominated by integrated advertising campaigns that combine traditional media, such as television, with previously unmeasured forms of marketing, such as packaging, in-store advertising, sweepstakes, and Internet. These campaigns often involve cross-promotion with a new movie or popular television program. Analyzing this data, the report calls for all food companies “to adopt and adhere to meaningful, nutrition-based standards for marketing their products to children under 12.

Out of the $1.6 billion, as Freking writes, $200 went to "cross-promotional campaigns" designed to ensure repeat exposure over several different formats. This included the use of about 80 films, TV shows and videogames to promote food/beverages to children. Cross-promotional strategies accounted for nearly 50% of restaurant food (and fruit & vegetable!) advertising expenditures.
For example, characters from Superman Returns and Pirates of the Caribbean appeared in ads that were shown in movie theaters; and on television, product packaging, the Internet, and in-store displays. According to the report, food marketers created special limited-edition snacks, cereals, frozen waffles, and candies “in honor” of these movie characters. In cross-promotional campaigns, television ads and packaging often directed viewers to a Web site where they could enter a sweepstakes to win a related premium, such as movie posters, character action figures, and cash. Consumers might also be directed to "advergames" (video games advertising a product), free downloads such as screen savers and ring tones, podcasts, and online video episodes known as "Webisodes."

As the advertising industry was quick to point out in their own coverage of the report, the total spending was much less than previous studies had indicated (sometimes up to 10x as much). It just goes to show you what a couple of years and a whole lot of controversy, industry self-regulation, strategy shifts and governmental monitoring can do...and the FTC report acknowledges the progress that the food and beverage industry has made during this period. However, the FTC wants the industry to do a bit better, particularly since the largest portion of the advertising spending goes to promoting unhealthy foods. The report and press release outline a number of recommendations, which you can access here.

There was also some much-needed nuance in the report's discussion of Internet ad-spending, pointing out that internet ads cost much less than television...something to remember when making comparisons based solely on expenditure, and not on frequency. As Freking reports,
"The Internet — though far less costly than television — has become a major marketing tool of food companies that target children and adolescents, with more than two-thirds of the 44 companies reporting online, youth-directed activities," the FTC report said.

Coincidentally (just kidding!), the Council of Better Business Bureaus' (CBBB) also released its first report on the Children's Food and Beverage Advertising Initiative (CFBAI), concluding that its members were indeed complying to their pledges (as vague and minimal as these actually are) and that rogue food giant Nestle has finally agreed to join the Initiative.

A number of academics and child advocacy groups weighed in on the report, including Kathryn Montgomery, who was interviewed in the AP article, and the Campaign for a Commercial-Free Childhood (CCFC). Says Montgomery:
"On the Internet, it's virtually an unregulated media environment and one that's hard for people to keep track of. Parents who are concerned abut their children's eating habits have to understand that you can't just look at what's happening on television. That's not the way it is anymore. It's a pervasive marketing environment."

In response, the CCFC's Susan Linn released a statement emphasizing the FTC study's various limitations and highlighting its many gaps in terms of the spending modes included in the final figures. These include:
* Program-length commercials/Integrated product placement:

"Companies report $46 million for character or cross-promotional brand licensing fees. However, most cross-promotional arrangements do not require a fee. In 2006, there were 81 media properties used by the target companies to promote their brands. These cross-promotions turn entire programs and movies into advertisements for the foods they promote, yet they are not counted as expenditures."

* Prime-time advertising:

"The total expenditure figure does not include spending for advertising and product placement on general audience programming watched by children, even though primetime shows such as American Idol and The Simpsons typically have larger child and teen audiences than programs considered children’s shows.

* In-school advertising:

"In-school advertising does not include regional and local or franchise spending for fast food companies. For example, McDonald’s infamous report card advertising in Seminole County Florida was sponsored by a regional marketing association and would not have been counted in the FTC Report."

* The full implications of online marketing:

"As the FTC notes, internet advertising, particularly on company sponsored websites, is relatively inexpensive. Expenditure data does not begin to capture its impact—the amount of time children spend with the sites and the frequency of their visits."

As both Linn and Montgomery point out, what the figures do not show is how the food and beverage industries, along with the marketing industries, are shifting their strategies...both to better target kids who use various forms of media, and potentially to get around regulatory restrictions, which already lag behind industry practice. The CCFC's last point about internet advertising is key in this respect. There's only so much that an assessment of dollars spent can really measure. Of course, this is also true of traditional media...for example, a study conducted last year out of the University of Arkansas found that a year into the food and beverage industry's self-imposed ad restrictions, very little had actually changed within the kids' media advertising landscape.

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