Marketing Food to Children and Adolescents - Federal Trade ...

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Marketing Food to Children and Adolescents spent on food marketing directed to children under 12 and a little more than $1 billion on marketing to adolescents. About $300 million of these expenditures were addressed to both age groups; hence, the total spending is less than the sum of the separate expenditures for the two age groups. Previous estimates of food marketing directed to children and adolescents by other researchers have been significantly higher than $1.6 billion. There are several reasons for this disparity. Other researchers have not had access to the confidential company financial data obtained by the Commission. Moreover, prior estimates appear to have included advertising directed to children for products other than food. In addition, these estimates have included price promotions, such as coupons or discounts for children at hotels and restaurants, that generally are targeted to adults. For those food and beverage brands promoted to children and adolescents, the overall expenditures for promotional activities directed to all audiences, including additional adult- oriented marketing, was more than $9.6 billion. Therefore, the expenditures directed to those between the ages of 2 and 17 represented 17% of the total 2006 marketing budget for those brands. Carbonated beverages, restaurant (QSR) food, and breakfast cereals accounted for $1.02 billion of the $1.6 billion, or 63% of the total amount spent on marketing to youth by the reporting companies. For carbonated beverages, the total was $492 million, with $474 million (or 96%) of that amount directed to adolescents. Nearly 24%, or $116 million, of carbonated beverage youth marketing consisted of in-school expenditures. QSRs reported spending close to $294 million on promotions to youth, divided fairly evenly between activities directed to children and those targeted to adolescents. For cereals, the total was $237 million, with $229 million targeted to children. Television advertising still dominates the landscape of marketing techniques used to promote foods and beverages to youth; companies reported spending $745 million, or 46% of all reported youth marketing expenditures, on this medium. More than 50% of the television advertising was directed to children under 12, with breakfast cereals and restaurant food accounting for more than half of that advertising. Carbonated beverages and restaurant food dominated adolescent- directed television advertising. All told, traditional “measured media” (television, radio, and print) accounted for $853 million, or 53% of the reported youth-directed marketing expenditures. New media – the Internet, digital (such as email and text messaging), and word-of-mouth/ viral marketing – have become an important component of promotional activities intended to reach children and adolescents. In an attempt to quantify the use of online marketing, Appendix ES-2
ES-3 Executive Summary D to this Report explores the amount of display advertising for food and beverages that appeared on child- and adolescent-oriented websites in 2006, as well as traffic on company websites that promote food or beverage products through branded entertainment and activities designed for children and adolescents. In terms of expenditures, however, the new media accounted for only $77 million, or 5% of reported youth-directed marketing. Expenditures on specialty items (premiums) and prizes for children and adolescents totaled $67 million, or 4% of reported youth marketing dollars. However, this number does not include toys distributed by QSRs with children’s meals because, in those cases, the consumer purchases the toy when paying for the meal. If the cost of QSR toys – which is estimated to total $360 million – were added to the reported premium expenditures, this category would jump to $427 million and would rank second only to television as a promotional technique targeted to children. Moreover, if added to QSRs’ reported child-directed marketing expenditures of $161 million, these costs would result in total spending on child-directed marketing by the reporting QSRs of over $520 million – more than twice the amount spent on child-directed marketing in any other food category. Companies reported spending $195 million on packaging and in-store display materials to reach children and adolescents, or 12% of all reported youth marketing expenditures. Marketing in schools totaled $186 million, or 11% of reported youth marketing, and 90% of those expenditures were for beverages, both carbonated and non-carbonated. The remaining $241 million (15%) of reported youth-directed marketing was spent on other traditional promotional activities, such as event and athletic sponsorships; celebrity endorsement fees; movie theater, video, and video game ads; product placements in movies, television, and video games; cross- promotion licensing fees; and promotional activities conducted in connection with philanthropic endeavors. Expenditures for cross-promotions, including the use of licensed characters and tie-ins with television programs, movies, toys, or other entertainment events, were compiled across promotional categories – generally including television, the Internet, premiums, packaging, and in-store displays. A little more than $208 million, representing 13% of all reported youth marketing, was devoted to cross-promotions. For some food categories, such as restaurant food and fruits and vegetables, cross-promotions were nearly 50% of reported child-directed expenditures. Cross-promotional activities directed to children were used for restaurant food, breakfast cereals, snack foods, prepared foods, dairy products, baked goods, and fruits and vegetables. Cross-promotions targeting an adolescent audience were used for snack foods, candy, and carbonated drinks.
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