Using unprecedented data collected through subpoenas to 44 major food and beverage companies, the Federal Trade Commission (FTC) today estimated that $1.6 billion was spent in 2006 on food marketing to children.
The FTC study, which was requested by Congress, will provide a benchmark or baseline for evaluating marketing changes under the current system of industry self-regulation, especially the effectiveness of the Children's Food and Beverage Advertising Initiative established in 2006.
That Initiative has been criticized as weak and voluntary, and several major companies including Yum! Brands and Nestle have declined to participate. FTC officials said today that they believed that the Nestle company will announce its participation in the Initiative later today.
The FTC officials said all food companies should join this self-regulatory Initiative and, moreover, that the voluntary company pledges under the Initiative should be seen just as a starting point. Lydia Parnes, who leads the FTC Division of Consumer Protection, quoted SpiderMan: "With great power comes great responsibility."
The data used by the FTC are different and in some ways better than anything else used previously in research on this topic. The FTC subpoenas asked companies to account for not just traditional "measured media," such as television and print advertising, but also the whole gamut of commonly unmeasured marketing techniques. Furthermore, FTC required breakdowns by food category.
FTC reported today that television advertising was 46% of total expenses for marketing to children. Internet advertising is very important in marketing to children, but comparatively inexpensive to produce, accounting for only 5% of expenses. Premiums or prizes were also a modest percentage, unless one counted the toys in fast food meals to children, in which case premiums ranked second only to television advertising.
Mary Engle, who leads the FTC's Division of Advertising Practices, described how companies integrate across media types in supporting a coherent branded message. Children might see an ad on television, for example, and have the message reinforced by packaging on a supermarket shelf. Or, the television ad might send the child toward more marketing at an internet site. The description makes clear that mild restrictions in one setting, such as a pledge to advertise only comparatively healthy products in a particular branded line on television shows for children, can be overcome by using similar branding and images that promote sales of the whole line, including lucrative less healthy products, in a wide variety of other settings.
Updates (late afternoon 7/29):
-- Are the FoxNews.com headline writers are a bit weak on the math, or am I missing a subtle distinction of some sort? "Federal Trade Commission: Kids Target of $1 Billion in Food Ads." But what's $600 million between friends?
-- A press release and copy of the report are now on the FTC site.