Junked Food

FOOD MARKETERS AND LEGISLATORS have each zeroed in on kids marketing in an effort to cut obesity among children. It’s a one-two effort that could change food marketing dramatically over the next few years.

The Federal Trade Commission met with marketers and child-health advocates in July to draft voluntary restrictions on food marketing to kids, while federal and state legislators mull legislation. At the same time, the Ad Council launched a Coalition for Healthy Children to get food marketers on board with a consistent message. Meanwhile, top food brands are running their own healthy-eating campaigns, reformulating some recipes and encouraging kids to get active.

Under the flurry of activity is one urgent question: Will food companies be forced to change the way they market to kids?

The stakes are huge: Marketers spent about $15 billion on kids marketing last year, more than double the $7 billion spent in 1994, per the Center for Science in the Public Interest.

Some politicians and advocacy groups are pushing for legislation that would put the FTC in charge of monitoring kids’ marketing. Food companies, in response, are pulling for self-regulation by fielding healthy-eating messages, imposing limits on their own ads to kids, and advocating broader authority for CARU, the 31-year-old Children’s Advertising Review Unit of the National Advertising Review Council (NARC).

But CARU has been criticized as too soft on industry. Sen Tom Harkin [D-IA] — whose Healthy Lifestyles and Prevention America Act (called the HeLP America Act) is now before the Senate Finance Committee — called CARU “a poster child for how not to conduct self-regulation.…CARU is a tiny group tasked with oversight of a multibillion-dollar industry.”

Plus, CARU reviews only advertising and Web sites. The national conversation is likely to broaden to other disciplines, including promotion, as regulators and advocates look beyond the TV screen at the same time that food marketers, feeling the heat, cut ad budgets for kids under 12 and mull other strategies.

“We need to differentiate between TV ads and other marketing strategies,” said Lisa Sutherland, a research assistant professor at the University of North Carolina and a panelist at the FTC’s July “Perspectives on Marketing, Self-Regulation, & Childhood Obesity” workshop. “My 12-year old is collecting bottle caps [for a promotion]. What’s the impact of that? How does it compound TV advertising?”

“The FTC should research contemporary marketing tactics to kids and teens. Those practices may break existing rules,” says Patti Miller, VP-director of the Children and the Media Program sponsored by advocacy group Children Now.

One researcher criticizes food companies for disingenuous marketing. “Coke says it doesn’t advertise to kids under 12, but it has rampant product placement in American Idol, which consistently scores at the top of the Nielsen ratings for kids 2 to 11,” says Susan Linn, associate director of the Media Center, Judge Baker Children’s Center and Harvard Medical School. “Without the threat of consequences from an outside agency whose first allegiance is to kids, it’ll be business as usual.”

The Grocery Manufacturers Association is apparently willing to go along. It has suggested that CARU should also oversee ads in video, computer and online games; forbid paid product placement in kids programming; and govern the use of licensed characters in ads.

In addition, GMA suggests CARU should have greater resources and enforcement capacity; offer consumer access via toll-free lines and a Web site; post regulatory activities online, including details of complaints and their resolutions; and push food companies to let CARU review more ads.

GMA is also calling for broader advice from CARU to parents, educators, nutritionists, fitness experts, behavioral experts and experts on FTC and FDA policy; and a closer working relationship between CARU and the FTC and Health and Human Services.

“We strongly believe that CARU can continue to be the standard for strong, effective, and credible self-regulation of advertising that American consumers can count on,” says GMA President-CEO Manly Molpus. “We will re-commit ourselves to that goal and pledge our companies to providing the financial support that is required.”

But no one, in the industry or government, has suggested tighter regulations for sales promotions. Industry insiders say that’s because advertising is the first big battle.

“Advertising is what most advocates and regulators see as the front line,” says Ali Pohn, VP-chief youth officer at Strottman International. “Advertising is such a big bite, it’ll be a while before they get beyond that. And there are so many levels: For example, if Nickelodeon licenses SpongeBob SquarePants for spinach, but he’s still on Cheezits, how do you address that?”

No one is calling for tighter reins on promotions to kids because “no one sees the promotions industry as a block, the way they see the ad industry,” says Steve Rotterdam, chief creative officer for EastWest Creative, whose clients include food and entertainment companies. Plus, marketing money isn’t tied up in a promotion for as long as it is with advertising. “Promotions come and go; advertising does not,” Rotterdam says.

Would the industry fund even more CARU oversight, to encompass all marketing? When an FTC rep posed the question this summer, Molpus demurred: “We set our suggestions based on CARU’s current scope. This is a significant expansion of scope.…”

Molpus also suggests that the federal government (via the Department of Health and Human Services) establish an award program recognizing companies that promote healthy lifestyles, and that the government continue funding “healthy lifestyle communication programs,” such as the HHS and Ad Council “Small Steps” campaign and the Center for Disease Control’s “Verb” campaign (see sidebar, p. 36).

Industry insiders say GMA’s proposals are similar to Harkin’s plan: Input from parents, public-health and child-development experts, as well as industry; strong enforcement, including independent monitors; an overview of the effects of food ads; and oversight beyond traditional media.

“Marketing has grown incredibly sophisticated and diverse. It has spread to the Internet, to products placements and tie-ins, to adver-gaming, and much more,” Harkin says. “An effective system of self-regulation…must evolve to keep up with rapid changes in advertising and marketing.”

“We can work with CARU to strengthen self-regulation [and encompass] Sen. Harkin’s four objectives,” said Brock Leach, Pepsico senior VP-new growth platforms and chief innovation officer, at the FTC workshop.

Can CARU carry the weight?

Enforcement became noticeably stricter in March, when CARU took Burger King and Wm. Wrigley Jr. Co. to task. BK’s ad and Web site didn’t show all the menu options in a Big Kids Meal; BK agreed to show all options in future. Wrigley’s print ads used fake band names in URLs that sent kids to its site, where a TV spot showed a kid killing a medical dummy that stole his gum. Wrigley pulled the print ads from Disney Adventures magazine and pulled the TV spot from its kid-directed Web site.

CARU touches some promotions through advertising: In May, CARU rapped Kraft Foods for not clearly stating the alternate means of entry on its Web site and in a TV spot for Lunchables’ Music Download Instant Win Game. The TV spot had run its course; Kraft agreed to add a “no purchase necessary” line to its Web site, but disagreed that CARU guidelines require an audio notice in TV spots.

CARU does have jurisdiction over sweepstakes and promotions directed to kids, says Linda Goldstein, an attorney with Manatt, Phelps & Phillips. “In fact CARU has been extremely active in challenging sweepstakes directed to chidren.”

A unit of the Council of Better Business Bureaus, CARU is funded by about 250 corporations to monitor ads and Web sites targeting kids under 12. Its policy is set by NARC, itself a collaboration between the Better Business Bureaus and the Association of National Advertisers, AAAA, and American Advertising Federation.

CARU monitors about 1,000 TV spots a month (and print, radio and Web sites); it has conducted inquiries into 1,200 ads since 1974. Since 2003, CARU has asked for 253 ads or Web sites to be changed or withdrawn, and 247 were (a 97.6% compliance rate).

“The self-regulation system has sought to help young children make wise food choices, free of misleading and incomplete information, and to respect the right of marketers to promote honestly products that have not been determined to be inherently harmful,” CARU Director Elizabeth Lascoutx said during the FTC workshop. The question now: whether restrictions should cover other marketing disciplines, and if CARU is the right group to handle that.

CARU’s guidelines evolve to address emerging issues, like advergaming, says American Advertising Federation President-CEO Wally Snyder. But “CARU’s expertise is in the message, not what foods should be marketed.”

Yet such standards are just what advocates are calling for. Consumer advocacy group Center for Science in the Public Interest suggests all ads for junk food be banned. CSPI also would ban ads on shows where kids are 25% or more of the audience; product placement in kids’ media; use of licensed characters; and all school-based marketing and fundraising.

Produce for Better Health Foundation (known for its 5 A Day campaign) wants nutrition standards for foods advertised to kids, as well as incentives for marketers who promote healthy foods for kids. “The food playing field must be leveled in favor of healthier choices,” says the PBHF Nutrition Marketing Manager Linda Brugler.

The idea of nutritional qualifications was shot down by ANA Executive VP Dan Jaffe at the FTC workshop: “Banning marketing for certain foods would be certainly unconstitutional. There are no bad foods, just bad diets.…Restricting advertising would be counter-productive.”

There are two logistical problems with proposals such as CSPI’s, Lascoutx says. First, limiting ads to kids under 17 would impact nearly all media, since teens watch much the same TV as adults. Second, it would be onerous to review the content of all foods, especially restaurant items, before approving ads for each.

CARU “was not established to be the arbiter of what products should or should not be manufactured, sold, or marketed to children, or to decide what foods are ‘healthy,’ or to tell parents or children what they should or shouldn’t buy,” Lascoutx told the FTC.

But food marketers want nutrition standards; most are using their own, based on Food & Drug Administration data. “We can get all we want via self-regulation, as long as we have the right guidelines,” says Kellogg executive VP-CMO Alan Harris.

Kraft’s “better-for-you” nutrition criteria (from USDA data) governs which brands can be marketed to kids six to 11. In January, Kraft began shifting ad dollars away from brands that don’t meet its standards to healthier products like sugar-free Kool-Aid, and half-sugar Fruity Pebbles cereal. Kraft will phase out kids’ advertising for non-compliant products worldwide by 2007.

“This is a response to concerns consumers expressed to us, [but it’s also] a good business decision and is driving prod development,” says Mark Berlind, Kraft’s executive VP-global corporate affairs.

“Nutrition standards are useful to motivate our own organization, a much more productive application…than [restricting] advertising,” adds Brock Leach, Pepsico senior VP-new growth platforms and chief innovation officer.

Even the FTC speaks in favor of letting business decisions drive the marketplace.

“Competition can help foster best practices in marketing healthy food choices. If [one] company adopts such marketing, others will follow,” says FTC Commissioner Pamela Jones Harbour. “Competition will lead to healthier food choices and marketing, and encourage the industry and media to adopt guidelines on best practices.”

Next month: What food marketers are doing, what consumers want, and how the Ad Council is helping out.

Government’s Carrot and Stick

Campaigns move kids; bills prod marketers

Food marketers spend about $12 billion a year on advertising; government-funded nutrition education, meanwhile, gets a mere $300 million, says Carol Berg, a researcher at Rutgers University. “We’re asking marketers to work with nutrition educators to teach us how we can reach consumers the same way your marketing does,” Berg said at the FTC’s July workshop.That could improve the U.S. government’s two education campaigns. Meanwhile, legislators mull further restrictions on food ads.

THE CARROTS

The U.S. Department of Health and Human Services’ 18-month-old Small Steps campaign encourages adults to make little changes in diet and exercise to improve their health. Media have donated $106 million worth of TV, radio and Internet ads. The Web site www.smallstep.gov gets 80,000 unique visitors a month, according to the Ad Council, which coordinates the campaign. McCann-Erickson, New York, handles pro bono.

The Centers for Disease Control’s four-year-old VERB campaign gets kids moving with TV, school programs, a tour and Web site. Last year’s 16-week Anytour sent six trucks to 100 cities to engage 840,000 tweens 8-13 in dancing, playing ball, inventing sports to win gear. Verbnow.com lets kids create “ViRTS,” virtual characters fueled by kids’ own play: Kids (313,000, so far) record hours of play to bank energy for their ViRTS. The site also has video tips from athletes and a ZIP code search for local activities. Arc Worldwide, Chicago, handles for CDC.

THE STICKS

Sen. Tom Harkin’s (D-IA) Healthy Lifestyles and Prevention America Act (called the HeLP America Act) would return authority over all kids marketing to the Federal Trade Commission; it would also prohibit food ads in schools, dictate more fruits and vegetables on school menus, and mandate nutrition labeling in restaurants. Introduced in May; in committee.

Sen. Joe Lieberman’s (D-CT) CAMRA Act would authorize funding for the National Institute of Child Health and Human Development to study the impact of electronic media on kids’ development. Introduced in March; in committee.

Sen. William Frist’s (R- TN) Childhood Obesity Reduction Act asks schools to increase physical activity and make cafeteria meals more nutritious. A separate IMPACT Act asks for grants for health services to improve nutrition and increase physical activity. Both introduced in June; now in committee.

Sen. Edward Kennedy’s (D-MA) Prevention of Childhood Obesity Act would coordinate federal programs and fund state programs and grants to curb obesity. Introduced in April; now in committee.

Meanwhile, food marketers in the European Union began self-regulation in March, a collaboration between food companies, advocacy groups and non-governmental organizations. Commitments are expected to increase next year, and a trans-Atlantic meeting is slated for May 2006, with as many as 50 U.S. experts (from food companies, and regulators) discussing best practices in the U.S.