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

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Marketing Food to Children and Adolescents Based on an assumed average unit cost of 40 cents per toy, 46 it is estimated that the Select QSRs spent more than $360 million to acquire the toys promoted with the children’s meals. If the Select QSRs’ expenditures on self-liquidating premiums were added to their reported child-directed premium expenditures, premiums as a child-directed promotional technique would rank second only to television – $427 million for premium promotions versus $458 million for television advertising. The Select QSRs reported spending $161 million on all child-directed marketing. If their toy acquisition costs were added to this total, child-directed marketing by QSRs would exceed $520 million – more than twice the amount spent on child-directed marketing by any other food category. 5. Other Traditional Promotional Activities The 44 companies reported youth- directed expenditures for various other promotional activities for which expenditures are not systematically tracked by commercial data companies. These “non-measured” activities included product placements; ads appearing before or within a video game or preceding a home video or theatrical movie feature; license fees paid to use a third-party animated character in advertising or for cross-promotional arrangements; sponsorships of sports teams and athletes; fees paid for celebrity endorsements; public events; advertising or other product branding in conjunction with philanthropic endeavors; and other miscellaneous marketing expenditures. Together, these non-measured activities accounted for $241 million or 15% of all reported youth-directed marketing expenditures. As shown in Appendix Table C.1, no single one of these activities exceeded 6% of total youth-directed marketing expenditures. The top three food categories in terms of spending on these other traditional media for youth 2-17 are shown in Figure II.15. Child Traffic (# of QSR visits in millions) % of Child QSR Traffic for Kids' Meals with Toys Figure II.13: 2006 Child Traffic for Kids’ Meals with Toys, 99¢ or $1.00 Menu Items, and Older Kids’ Meals (All QSRs versus Select QSRs) 1,400 1,200 1,000 800 600 400 200 0 20 1,224 901 Kids' Meals with Toys Purchases Source: The NPD Group/CREST 40 35 30 25 20 15 10 5 0 19.5 486 398 99¢ or $1.00 Menu Item Purchases All QSRs Select QSRs 117 93 Older Kids' Meal Purchases Figure II.14: Percent of 2006 Child Traffic for Kids’ Meals with Toys (All QSRs vs. Select QSRs) Source: The NPD Group/CREST 37.6 All QSRs Select QSRs
Expenditures for Marketing Food to Children and Adolescents a. PR o d u c T Pl a c e m e n T s a n d mo v i e Th e a T e R, vi d e o, a n d vi d e o ga m e adveRTising The companies reported spending more than $5 million on youth-directed product placements. Some companies explained that product placement expenses encompassed the cost of the product only; other companies reported expenditures for hiring agencies to negotiate opportunities for product placements. Only carbonated beverage companies spent a significant amount on product placements – just over $4.5 million for teen-directed placements, which comprised 67% of what the carbonated beverage companies spent in total on product placements for the reported brands. Dollars (in millions) 140 120 100 80 60 40 20 0 Figure II.15: Other Traditional Promotions Top 3 for Youth The companies spent $8.4 million on youth-directed advertising preceding or appearing in video games or preceding movies. The prepared foods category accounted for the greatest expenditures on movie theater, video, and video game advertising to reach children ($2.4 million), representing 95% of all expenditures by the reporting companies on such advertising for prepared foods. Candy/frozen dessert makers reported the largest expenditures on movie theater, video, and video game advertising to reach the teen market ($3 million), 47 representing 84% of all such expenditures in the candy/frozen dessert category for the reported brands. b. ch a R a c T e R o R cR o s s-PR o m o T i o n a l li c e n s e fe e s Youth-directed expenditures for character or cross-promotional licensing fees were reported in all food categories, for a total of $46 million. Although these fees comprised only 3% of all youth-directed marketing expenditures, several companies reported that many to most of their cross-promotional arrangements did not require them to pay fees. Breakfast cereal companies reported the largest amount of child-directed licensing fees ($12.4 million), followed by the QSRs ($11.5 million) and snack food producers ($8.7 million). 117 37 Carbonated Beverages Restaurant Foods Juice & Noncarbonated Bevs. 21 21 67 All Other
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Marketing Food to Children and Adolescents - Federal Trade ...

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