If you wanted to ensure a report gets buried, a good time to release it would be the Friday before a holiday week. That the Federal Trade Commission released its latest report on marketing to children then speaks volumes about how seriously the Obama administration is taking this intractable problem.
The mind-numbing 356-page document is billed as a "follow-up" to the agency's 2008 report, in which we first learned important if not surprising details about industry expenditures and the myriad ways that marketers target children.
As I explained then, the Fed's solution to the problem of industry spending more than $2 billion annually marketing mostly junk food to children isn't government action, but rather improved voluntary self-regulation, despite this non-system being a proven failure, over and over again.
Ignoring the futility of this approach, the feds set out to examine how the food industry has cleaned up its act over the last few years. The report's press release spin -- commending industry for "progress" -- defies the agency's own data. Even the first page of the report's executive summary admits: "The overall picture of how marketers reach children, however, did not significantly change."
Kids Targeted Online, and Everywhere Else
For starters, while total ad spending directed at children dropped by 19.5 percent, the report notes a 50 percent increase in digital ads and other forms of "new media," an indication that companies are just getting smarter and more efficient in how it spends its marketing dollars. Indeed, as the FTC explains:
Internet promotional activities have become an anchor for food marketing, with more than 90% of the reporting companies engaging in online marketing in 2009. Online marketing is far less costly than TV and other media, and more interactive and engaging.
Moreover, cross-promotions, such as when food companies team up with movie studios, video games, theme parks, etc., which FTC calls "a hallmark of marketing food to young people" increased from 80 reported examples in 2006 to more than 120 in 2009. In a sign that it's becoming increasingly impossible to separate TV from online entertainment, FTC offers: "SpongeBob episodes, for example, could be viewed on food company websites with cross-links between Nickelodeon's SpongeBob website and the food company site."
Also, it's not just that spending is shifting from TV to online that's significant, but that digital marketing techniques are more interactive and at times downright creepy, especially when it comes to teens. (See my post about PepsiCo's online video game designed -- according to the ad agency -- to "scare the crap out out of teenagers.") The FTC report describes the social intent of "advergaming":
One game directed the child to hold a cereal box up to a webcam in order to interact with the game. Other popular online marketing activities included allowing children to create their own avatar and personalize their virtual world, creating art work to share with a friend online, joining online "clubs" that offer free or discounted meals on a child's birthday, and downloading screen savers, "emoticons," ring tones, videos, and other items.
The agency also examined industry market research confirming the effectiveness of online techniques:
Other examples of non-traditional forms of marketing included:
... online marketing activities are a worthy investment because they keep children engaged with the company and promote brand loyalty. Other research underscored the importance of frequently updating online content to keep it fresh, and using streaming video and interactive icons to appeal to teens.
- An energy drink company sent sampling teams in branded vans and buses to distribute products at places where teens congregate -- beaches, ski venues, sports events, music festivals and concerts, summer camps, college fairs, and SAT prep courses;
- The Jonas Brothers Band -- which was featured in both a concert tour and a movie -- appeared in television, radio, and Internet ads for cheese slices; a free download of their music was available by purchasing the product;
- A candy company sponsored a safe driving program for high school students.
- Ads for beverages, energy drinks, snack foods, yogurt, cereals, canned pasta, and candy, as well as QSRs, aired ads on Spanish-language radio or television stations or networks. Most were aimed at a general Spanish-speaking audience, with some ads were teen-directed and a few were child-targeted;
- Workshops on healthy eating for Hispanic parents and children were sponsored by a non-carbonated beverage company, while town-hall meetings on college applications and scholarship opportunities for Hispanic teens were sponsored by a QSR;
- One marketer looked at purchasing patterns among Hispanic consumers and identified families with children as accounting for the biggest growth in sales for that company. This research also observed that Hispanic children are the primary drivers of acculturation within their families and are reached effectively through a typical kids' media buy.
Of course, it's not just Hispanic parents that want to please their kids. Market research from the companies showed how effective "pester power" is in getting parents to cave in to their child's requests. Again, from FTC:
For example, one company's study found that a child seeing an ad for a food product or seeing the product on the shelf was a key factor in purchase and that 75% of the purchasers surveyed bought the product for the first time because their child requested it. Another study showed that in-store advertising campaigns using child-targeted character-based themes outperformed those using mom-targeted themes.
Keep Industry in Charge, Why Fix What's Broken?
So then, what does the agency charged with protecting children from this sort of predatory marketing offer up as a solution? Just more of the status quo, based on the food industry's alleged "improvements" in the nutritional quality of the foods they are marketing to children. According to FTC:
... many food companies have continued to improve the nutritional profile of their foods by reformulating existing products and introducing new ones... the Commission believes that the food industry can -- and should -- make further progress in using its marketing ingenuity and product portfolio to address childhood obesity.
That the FTC has determined its role is to nudge the food industry along in making minute reformulations to its products is troubling to say the least. Even FTC had to admit to less than a one gram decrease in sugar-packed cereals along with "slightly more whole grain (an increase of 1.6 grams, or one-tenth of one serving"). Of course, the food industry is jumping for joy over the feds' mostly positive spin.
And it's ironic because in the report the FTC admits, while attempting to assess industry's self-regulatory system that nutrition analysis is not its strength: "Although the Commission does not have the expertise to assess specific nutrition criteria..."
Despite this admission a good portion of the report is devoted to a nutrition analysis of the foods being marketing to children, along with a review of survey data on dietary patterns, presumably to connect any alleged "progress" of the food industry with how kids are eating, despite the lack of scientific merit of connecting those two dots. (Kids' eating habits may get worse or better over time for any number of reasons unrelated to industry marketing practices.)
Moreover, as I have argued before, it's simply unethical to market to children, whether the product is fruit or Froot Loops, so I remain unimpressed with any approach that gives over so much ground to industry.
It also defies logic that the FTC believes voluntary self-regulation could ever work. The report admits that industry conveniently exempts key forms of marketing from its own guidelines: "Product packaging and in-store promotion, including the use of licensed characters from popular children's movies and TV shows, are exempt and continue to be used extensively to market to children." Probably not so coincidentally, industry's own reported market research identified these very strategies at the most effective.
Anyway, industry showed its true colors when four federal agencies led by the FTC (this could explain why the agency is so fatigued over this issue) tried to make recommendations to improve the food industry's self-serving system of nutrition standards and suggested science-based, uniform, industry-wide guidelines instead. Two years later, Congress brought the effort to a screeching halt, thanks to huge outcry from the food, advertising, and media industries.
It now appears the federal government is out of ideas, and is just going through the motions. That we cannot count on the Obama administration to protect children from predatory marketing when the first lady had made childhood obesity her main cause demonstrates the political power of the food, media, and marketing industries. So that's it parents, you're on your own.
For additional perspectives on the report, see my two interviews:
Cross-posted from Corporate Accountability International.