Advertising to Children: Consumer Perceptions and Implications.

Advertising to children has been a marketing plan staple for many food companies since the advent of television. Even as adults, many of us can still recall signature advertisements, from the “Tony the Tiger” and “Trix Rabbit” campaigns to “Punchy”, the combustible Hawaiian Punch character. Indeed, some brands have historically devoted up to 50% of their media budgets to ads targeting children.

And why not? In many ways, children are the ideal advertising audience – they are receptive, influential (“pester power” is a well-documented phenomenon), and have a lifetime of purchasing ahead of them.

But mounting factors such as the childhood obesity epidemic, more intense government scrutiny and an increasingly active, vocal consumer base have placed children’s advertising under the microscope. These forces recently culminated in the decision by 11 major U.S. food companies to voluntarily reform their children’s-advertising practices. As part of its Nutrition*Buzz monitoring program, Nielsen BuzzMetrics examined the proposed changes to children’s advertising, the events driving these changes, and implications for food marketers.

Ten of these 11 companies to boost advertising of more healthful products on children’s television programs.

New rules are adopted

At a July 18, 2007 workshop on Children’s Obesity and Marketing organized by the Federal Trade Commission (FTC) and the Department of Health and Human Services, 11 of the largest food concerns in the U. S. vowed to adopt new rules governing advertising to children under 12.This commitment is actually an extension of a less-publicized pledge by ten of these 11 companies to boost advertising of more healthful products on children’s television programs1. While precise standards vary by company, there are several core features of the plan:

Main Features of Children’s Advertising Restrictions

* Program participation is voluntary.

* The products that can be advertised on “children’s shows” are affected; not the ads themselves. For example, cereals containing over 12 grams of sugar per serving will no longer be advertised on children’s shows, but the current commercials for those cereals may run on other programs.

* The Better Business Bureau will monitor and report on adherence to the new policies using an industry-accepted ad-tracking service (Nielsen’s KeepingTrac2).

* The protocol contains several perceived “loopholes.” For instance, companies could work around the guidelines by manipulating serving sizes or by advertising on “family shows” whose audience includes large numbers of children, but are not technically children’s programs.

Altruism or self-interest?

Several factors appear to have contributed to the adoption of these new guidelines. In January 2006, a consortium of consumer advocacy groups sued Nickelodeon and Kellogg’s for allegedly marketing “junk food” to children. Kellogg’s settled this action in June of this year. Concurrent with the settlement, Kellogg’s voluntarily restricted its advertising to children, effectively becoming the first of the 11 firms to adopt new standards. Kellogg’s announcement generated a fair amount of media coverage and consumer buzz.

The FTC threatened to introduce compulsory child-marketing regulations.

At the same time, the FTC was increasing pressure on food companies to combat the rise in childhood obesity by reforming their marketing practices. The FTC threatened to introduce compulsory child-marketing regulations, similar to those that exist in a number of European countries. The combination of these events appears to have contributed to the decision to voluntarily restrict advertising to children, and to the timing of the announcement.

Consumer reaction

The volume of buzz on this issue is in the typical range observed for key food and health events in the media. Consumers are paying attention to which companies are participants and which are not. Companies subscribing to the new guidelines tend to be more strongly associated with the new restrictions than equally large companies that are not subscribers. This suggests it will be difficult to hide in the shadows of participating firms should interest in this issue continue to increase, as we suspect it will.

Consumers’ take on companies that proactively limit advertising aimed at children is both surprising and familiar.

Consumers’ take on companies that proactively limit advertising aimed at children is both surprising and familiar. What is surprising is the range of attitudes reflected in consumer conversations. Opinions are spread across three large, distinct areas:

1. Approve of Corporate Responsibility. These consumers endorse the change in companies’ marketing policies as a move in the right direction, and praise the participating firms.

2. Suspect Ulterior Motives. Consumers in this camp believe the restrictions were adopted out of self-interest. They see them as an attempt to preempt more restrictive government regulations or damaging litigation.

3. Blame the Parents. This group believes parents are responsible for controlling their children’s diet, not the food industry. When parents yield to children’s demands for less healthy foods, these consumers question who the adult is in the relationship, and chide parents for shifting responsibility for their children’s health onto corporations. Still, even some in this group believe restricting advertising to children will have a positive effect on children’s health.

This sentiment pattern is similar to that observed in connection with last year’s announcement that New York City would ban the use of trans fats at restaurants. In that case, consumers were also divided on the issue of where corporate or government responsibility ends and individual choice begins. These are weighty issues that transcend businesses and brands. From a tactical perspective, the most obvious conclusion is perhaps the most important: actions like restricting advertising to children or banning trans fats increase the saliency of these issues. It becomes important, therefore, to understand how business intersects with these topics, and to consider whether course corrections are indicated.

What will the future hold?

Advertising to children is likely to remain a visible issue, and other food industry practices may come under scrutiny in the coming months. This will likely be the case for several reasons:

* The 11 companies pledging to regulate children’s advertising represent a broad swath of the food industry, and include some of the largest, most respected firms. Other firms will likely follow suit, due to pressure from consumers, public officials, and the complying companies themselves.

* The root cause of increased scrutiny around advertising to children – the obesity epidemic – is not likely to be solved in the near term. To the extent this trend maintains or accelerates, expect the food industry to remain in consumers’ crosshairs.

* The July 18 announcement continues to fuel awareness and discussion of children’s advertising, as well as the broader issue of the food industry’s responsibility to the public health. Further, the regulatory machine was revved up prior to the announcement. It will continue to churn, as evidenced by the FTC subpoenas issued to 44 food companies in early August for a report it is preparing on marketing to children.

* If restricting advertising to children is shown to improve their health, there will be calls for further reforms that build on the program’s success. If restricting advertising to children fails to improve children’s health, there will be calls for further reforms to shore up the program or extend restrictions to other food industry practices.

Prepare and take action

Though the voluntary regulation of children’s advertising is a dynamic issue, marketers should investigate smart choices in order to better position themselves to address the matter as it unfolds:

* Develop a game plan. Examine your communication plan, and be ready to alter your brand presentation and media tactics. Flexible copy rotation and media plans will be helpful.

* Take credit. Flagging the labels and ads of qualifying foods will help consumers make choices and reinforce your company’s commitment to children’s health.

* Act in good faith. Consumer antennae are already up concerning potential loopholes in the voluntary guidelines. To maintain consumer trust in your brand, food industry actions must be consistent with the spirit of the new restrictions.

* Do not overreact. Parents will continue to buy less healthy foods, and kids will continue to eat these foods. If possible, offer choices as opposed to instituting wholesale changes. If you decide to reformulate some products, ensure the new formulations deliver against consumers’ expectations for the brand.

To view charts CLICK above on ‘More IMages’.

1 Children’s programs are programs whose audience is comprised of at least 50% children.
2 KeepingTrac provides next-day summary of commercials’ program placement and audience composition.