ANA Regulatory Rumblings

Food Marketing to Children Declines and Shifts

Two subcommittees of the U.S. Senate Appropriations Committee held a hearing today on food marketing to children.  For that hearing, ANA and the Grocery Manufacturers Association (GMA) submitted a report from Georgetown Economic Services (GES) with important data on food, beverage and restaurant advertising to children.  The report, the first to analyze 2007 ad spending and impressions, finds that children and adolescents are seeing fewer TV commercials for these products and that the mix of commercials is shifting toward lower-calorie food choices.

Among the highlights of the report:

• The typical child saw nearly 10% fewer food and beverage ads on children’s TV in 2007 than in 2006.  Since 2004, the decline is 25%.
• Spending for food, beverage and restaurant advertising, adjusted for inflation, dropped 6% over last year.
• The mix of advertising seen by children continues to shift.  Since 2004, advertising is growing fastest for bottled water and fruits and vegetables.  Advertising is shrinking the fastest for cookies, gum and snacks.

The report is based on Nielsen Media Research data and is an update of the 2004-2006 GES study on food, beverage and restaurant advertising spending, which was also commissioned by ANA and GMA.  It is critical that policymakers have reliable measures of the various efforts that marketers have taken in recent years to respond to concerns about childhood obesity.

Last July, the FTC released its long-awaited report on food/beverage ad spending in all media.  The report found that the total amount spent on food/beverage advertising to children aged 2-17 in 2006 was $1.6 billion.  This figure is significantly lower than the $10 to $12 billion figure that was cited in a 2004 IOM report on marketing to children.  The FTC report also had positive reviews for the Food and Beverage Advertising Initiative of the CBBB.  That initiative now has 15 members which represent two-thirds of all children’s food and beverage TV ads.  In July, the CBBB released a report indicating that all of the program members had met their pledge obligations in the first year of the program. 

We have a very positive story to tell about how our industry has responded to the childhood obesity crisis.

The Food Fight Continues

Over the past few months I have been dedicating a lot of time to speaking about the advertising policies surrounding childhood obesity. It is an extremely important issue for the ANA and the advertising industry overall, and we continue to reach out and provide insight on the real facts of this problem.

Recently I spoke at the Second National Forum on Obesity Policy, Regulation and Litigation in Chicago. As I recapped the events of the past few months, I was reminded that we still have a long way to go in communicating all of the efforts that the advertising industry is making to combat childhood obesity.

From our industry’s self-regulatory system, the Children’s Advertising Review Unit (CARU), which monitors the advertisements that potentially take advantage of a child’s credulity, to the Ad Council’s “Small Steps” program, which strives to educate the public with numerous methods and examples of how to combat obesity, we are actively working to do our part.

But what concerns me most is that despite all of this positive and progressive action, the advertising industry continues to be targeted as a leading contributor of this epidemic.

I wanted to point to some articles from just last week that demonstrate the challenges we face as an industry:

*Aiming at kids: Pressure builds on foodmakers, Star Tribune

*Snack foods sweet on adults: Childhood obesity forces marketing twist; firms insisting products are for grown-ups, Fort Wayne Journal Gazette

*Empire of nutritionists strikes back at childhood obesity, Boston Herald

What is even more frustrating is that there is an ever-growing body of evidence that demonstrates that advertising is not a major factor in the obesity challenge that we increasingly face around the world. In Sweden and Quebec, for example, they banned all advertising to children, including food advertising,  yet their obesity rates are not lower than many societies that have no such restrictions and substantial rates of food advertising. Also, in the United States where food and restaurant advertising is relatively uniform throughout the nation, there are wide variations in obesity rates from locality to locality, even in closely contiguous areas. This type of substantial variation would not be expected if advertising were a major engine generating this problem.

In fact, recent data provided by Nielsen Media Research, Inc. and Nielsen//NetRatings and analyzed by Georgetown Economic Services, LLC for the Association of National Advertisers (ANA) and the Grocery Manufacturers of America (GMA) found that during the past 10 years, food, beverage and restaurant television advertising expenditures, as well as the number of food, beverage and restaurant ads seen by children under age 12, have declined. This decline took place during the very period cited as the time during which obesity rates grew the most and at the fastest rates. The number of food and restaurant commercials seen annually by children 12 and under, for example, peaked at nearly 6,000 in 1994 but declined by over 13% over the next 10 years. Adjusting for inflation, in order to hold the value of dollars constant over the same time period, TV ads for foods and restaurants reached nearly $6 billion in 1994, but dropped below $5 billion in 2004.

The new data, in addition, examined the exposure of children to messages from food and restaurant companies in the online environment and found that they continue to be miniscule in comparison to the ads on broadcast and cable.

As noted earlier, the advertising community is committed to helping combat obesity through public service advertising and the rapidly accelerating development and advertising of new and improved food, beverage and restaurant items that are lower in fat and calories. Our community, however, needs to strongly oppose efforts to restrict food and restaurant advertising that will take us down regulatory and legislative blind alleys under the guise of obesity prevention.

Food Advertising to Children an Increasingly Weighty Issue in Washington

Concern over food, beverage and restaurant advertising in general, and to children in particular, is certainly not losing strength on Capitol Hill or in the media. The issue has continued to grow since the beginning of the year. Here are some highlights from the past few months:

* At a January press conference, the Center for Science in the Public Interest (CSPI) called for the Department of Health and Human Services (HHS) to devise strict food guidelines based on a good food/bad food dichotomy. CSPI then called on the Federal Trade Commission to use the guidelines to restrict or ban ads for so-called “bad foods” directed to children 18 and under.

* Earlier this month, Senator Hillary Rodham Clinton (D-NY), in a conference sponsored by the Kaiser Family Foundation, argued that excessive violence and sexual content in various media and entertainment are creating a “silent epidemic” that threatens the health and emotional well being of America’s children. The Foundation recently released a new study on children’s media use. Senator Clinton also commented on the impact of food advertising on obesity and announced reintroduction of legislation to examine the impact of media on children’s mental development. Senator Clinton was joined by Senators Joe Lieberman (D-CT), Rick Santorum (R-PA), Sam Brownback (R-KS), Richard Durbin (D-IL), John Ensign (R-NV) and Mary Landrieu (D-LA). One of the mandated pilot studies in the legislation would examine children’s media use and its effects on obesity.

* Also this month, Senator Tom Harkin (D-IA) announced plans to reintroduce his legislation to grant the FTC “unfairness” rule-making authority in the children’s advertising area. Senator Harkin also announced plans to introduce legislation to ban “junk food” ads in schools.

* Finally, Federal Trade Commission Chairman Deborah Platt Majoras announced a two-day workshop in Washington to be sponsored by the FTC and the Department of Health and Human Services to examine self-regulation in the food, beverage and restaurant industry.

Obviously, food, beverage and restaurant advertising, especially to children, is continuing to come under increased scrutiny. The ANA fully agrees that children deserve special protection from inappropriate content, and has been a major supporter of the Children’s Advertising Review Unit (CARU) to assure strong self-regulation in regard to children’s advertising. The obesity problem, however, is the result of multiple forces in American society, and singling out advertising for blame will not solve it.

In fact, leading marketers are responding to consumer concerns with a vast array of new and healthier product formulations, including low-fat and low-calorie varieties. Advertising is vital to get the message out to consumers about these products.

ANA has been active on other fronts. Our CEO, Bob Liodice, sits on the boards of both the National Advertising Review Council and the Ad Council. The Ad Council has a number of public service campaigns aimed at promoting good nutrition and increased physical activity, including the “Small Step” campaign in conjunction with the Department of Health and Human Services (HHS).

In reaction to the CSPI’s call for new food guidelines in January, we responded strongly with a detailed op-ed in AdAge. In Washington, we have created the Alliance for American Advertising (AAA), with a number of trade association and individual companies, which seeks to inform policymakers of our industry’s commitment to responsible advertising. We also have been involved in the American Council for Fitness and Nutrition (ACFN) which promotes physical activity and better nutrition.

Fighting unreasonable restrictions on food advertising is an ongoing effort -- one that requires enthusiastic support from the entire marketing community. Look for the ANA and other leading organizations to challenge erroneous claims and to provide the facts necessary so that marketers can continue to meet consumer demands effectively in the marketplace.

Data Highlights Why Banning Ads to Kids Won't Work

The Cato Institute held a policy forum this week entitled “Kids, Cartoons and Cookies: Should We Restrict the Marketing of Food to Children?” I participated (PowerPoint link) on the panel along with Dale Kunkel, Professor of Communication at the University of California-Santa Barbara; and Todd Zywicki, Director of the FTC’s Office of Policy Planning.

Mr. Zywicki and I separately presented important new data that helps demonstrate that food advertising should not be linked to rising obesity rates in the United States. Mr. Zywicki’s presentation tested the hypothesis presented by some critics that increased advertising exposure has led to increased obesity rates. His analysis looked at a number of factors, including whether children are watching more television and thus seeing more ads; whether children are seeing more ads per hour of programming; and whether the mixture of ads has changed in composition so that more food ads are being shown. His research found that television viewing and the number of ads per hour has gone down, while ad composition has remained constant. He also examined whether parents are just “giving in” to their children’s demands. His research found that children tend to eat what their parents eat, leading him to conclude that parents still have control over food choice. Mr. Zywicki emphasized, as most analysts do, that obesity problems are caused by multiple factors. He also emphasized that banning ads would be “impractical, ineffective, and illegal.”

I later presented an analysis drawn from a study carried out for the ANA and the Grocery Manufacturers of America (GMA). This study analyzed data provided by Nielsen Media Research covering the period 1993 to 2003. This ten year period has been cited as the time in which obesity rates grew the most and at the fastest rate.

The study drew the following conclusions:

1) Adjusting for inflation in order to hold the value of dollars constant over the time period, real expenditures on food and restaurant advertising on all television, including cable, fell over the ten year period 1993-2003;

2) Rather than being increasingly bombarded by restaurant and food advertising, kids 12 and under, in fact, saw less food and restaurant ads between 1993 and 2003;

3) Therefore, obesity rates in the U.S. cannot be blamed either on the increase in expenditures or the quantity of ads for food and restaurants viewed by kids 12 and under.

The following tables and explanatory material provide more detail in regard to these findings (click on the thumbnails to view).

This chart shows that total spending on food and restaurant ads over the ten year study period reached $5.92 billion in 1994, and fell to $4.98 billion in 2003. Annual expenditures over the last four years of the survey period, from 2000 to 2003, averaged $4.92 billion per year. In comparison, over the first four years of the survey period, from 1993 to 1996, ad spending averaged $5.60 billion per year.

This chart shows that the number of ads seen by children under 12 declined in the same ten year period. The number of ads reached 5,909 per year in 1994 and dropped to 5,038 in 2003. There was a decline of 13% when the last four years are compared to the first four years of the period.

This final chart expands on the second chart to show how many commercials were for foods and how many were for restaurants. It shows that the commercials directed at children for restaurants have remained relatively constant, and that overall; the trend for these ads is down.

These data are consistent with the experience of other countries where bans or severe restrictions on children’s advertising have failed to lower obesity rates in comparison to nearby countries where there are no restrictions on advertising to children.

These data also provide a strong foundation of facts to answer those who see banning or severely restricting ads as the solution to the obesity problem.