Markets Wired

The Federal Trade Commission today announced the results of a study on food marketing to children and adolescents. The report, Marketing Food to Children and Adolescents: A Review of Industry Expenditures, Activities, and Self-Regulation, finds that 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.”

“Our study makes a path-breaking contribution to understanding how food and media industries are marketing food to youth,” said FTC Chairman William E. Kovacic. “We call on both industries to deploy their talents to promote healthier choices for children and adolescents.”

The Commission obtained the data for this report through compulsory process orders requiring financial and marketing information from beverage manufacturers and bottlers; producers of packaged snacks, baked goods, cereals, and prepared meals; makers of candy and chilled desserts; dairy marketers; fruit and vegetable growers; and quick-service restaurants.

The report finds that approximately $870 million was spent on child-directed marketing, and a little more than $1 billion on marketing to adolescents, with about $300 million overlapping between the two age groups in 2006. Marketers spent more money on television advertising than on any other technique ($745 million or 46 percent of the 2006 total.) But for most food products, they employed the full spectrum of promotional techniques and formats when advertising to a young audience: themes from television ads carried over to packaging, displays in stores or restaurants, and the Internet.

That same year, cross-promotions tied foods and beverages to about 80 movies, television shows, and animated characters that appeal primarily to children. In total, the companies spent more than $208 million, representing 13 percent of all youth-directed marketing, on cross-promotional campaigns. For some food categories, such as restaurant food and fruits and vegetables, cross-promotions accounted for nearly 50 percent of reported child-directed 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.”

The report finds that, although there is room for improvement, the food and beverage industries have made significant progress since the FTC and the Department of Health and Human Services co-sponsored the Workshop on Marketing, Self-Regulation & Childhood Obesity in 2005. The report cites the Children’s Food and Beverage Advertising Initiative, launched by the Council of Better Business Bureaus (CBBB) in 2006, for taking “important steps to encourage better nutrition and fitness among the nation’s children,” by changing the mix of food and beverage advertising messages directed to children under 12 and encouraging them toward healthier eating and better physical fitness. To date, 13 of the largest food and beverage companies – accounting for the majority of food and beverage expenditures directed toward children – have adopted the initiative, pledging either not to advertise to children under 12, or to limit their television, radio, print, and Internet advertising to foods that meet specified nutritional standards. In addition, several major food and beverage companies have adopted the Alliance for a Healthier Generation guidelines, which are designed to lower the caloric value and increase the nutritional value of foods and drinks sold in schools outside the school meal program.

The report recommends that all companies that market food or beverage products to children under 12 adopt meaningful, nutrition-based standards for marketing their products – standards that extend to all advertising and promotional techniques, including, for example, product packaging and in-store marketing. Companies also should improve the nutritional profiles of products marketed to children and adolescents, whether in or outside of schools; cease the in-school promotion of products that do not meet nutritional standards; and improve the quality and consistency of the nutritional criteria adopted for “better for you” products. The report also recommends steps to enhance the Council of Better Business Bureaus’ initiative.

Finally, the report recommends that more media and entertainment companies restrict the licensing of their characters to healthier foods and beverages that are marketed to children, so that cross-promotions with popular children’s movies and television characters will favor more nutritious foods and drinks. Media companies also should consider limiting ads on child-directed programs to those that promote healthier foods and beverages.

The Commission vote to approve the report was 4-0, with a separate concurring statement from Commissioner Jon Leibowitz.

“Most large food marketers are beginning to take their self-regulatory obligations seriously, and for that they deserve recognition,” Commissioner Leibowitz stated. “Yet some companies still need to step up to the plate and others need to strengthen their voluntary measures, not only because it is in the public interest, but also because it is in their self-interest.”

View the complete text of the statement.

Copies of the report are available at the FTC’s Web site, www.ftc.gov, and from the FTC’s Consumer response Center, Room 130, 600 Pennsylvania Avenue N.W., Washington, DC 20580.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.