2/1/2013
Candy companies may not feature SpongeBob-branded promotions as regularly as they did a few years ago, and cereal brands may be targeting moms more than children, but food and beverage marketers still spend billions to advertise to children and teens.
The Federal Trade Commission (FTC) finds that 48 major food and beverage companies spent a total of $1.79 billion to market their products to children in 2009, down 19.5% from the $2.1 billion spent by 44 major brands in 2006. Despite fewer marketing dollars and four additional marketers, the overall picture of how marketers reach children did not change significantly from 2006 to 2009, according to the just-released FTC report.
Out With The Old, In With The New
This FTC report, which is part of an ongoing Congressional inquiry into the causes of childhood obesity, is an official follow-up report that updates baseline findings established in a 2008 report (YA, 8/15/08).
Companies including Kellogg’s, Kraft, McDonald’s, and Coca-Cola provided information about their marketing activities for products in 10 categories: breakfast cereals, snack foods, candy and frozen desserts, dairy products, baked goods, prepared foods, carbonated beverages, fruit juice and non-carbonated beverages, fruits and vegetables, and fast food.
Food and beverage brands continue to use integrated efforts to reach young consumers, including traditional media, Internet, digital marketing, packaging, and promotional tie-ins. Self-regulatory initiatives have improved the nutritional quality of many of these advertised products.
Carbonated beverages, restaurant foods, and breakfast cereals accounted for $1.29 billion, or 72% of the total amount spent on youth-directed food marketing in 2009.
Child-directed expenditures decreased 26% across all food categories between 2006 and 2009. The largest decreases in spending were in youth-targeted marketing of baked goods (-91%), candy and frozen desserts (-66%), and carbonated beverages (-59%). Meanwhile, food marketers increased their teen-directed marketing expenditures, including those promoting snack foods (56%), prepared foods (38%), breakfast cereals (37%), and fast food chains (24%).
Where Marketers Spent Their Dollars
Food companies spent 50% more to reach teens and children via new media channels in 2009 than they did in 2006. However, new media accounted for only 7% of overall marketing. Breakfast cereals ($22 million), fast food chains ($19 million), and snack foods ($10 million) were the top three categories for child-directed new media expenditures. Soda ($23 million), candy and frozen desserts ($12 million), and snack foods ($11 million) were the top three categories for new media marketing targeting teens.
TV advertising remains the most frequently used medium, accounting for 35% of total youth-directed marketing expenditures ($633 million) in 2009.
Fast food ($154 million) and cereal ($102 million) companies account for 68% of total food and beverage TV ad spending geared to children. Food and beverage companies spend less than 10% as much on radio and print advertising as they do on TV advertising. Only dairy brands ($3 million) and fast food chains ($1.2 million) spent at least $1 million on child-directed print and radio outreach.
Teen-directed outreach is another matter. Soda brands ($23.1 million), fast food chains ($14.3 million) and candy/frozen dessert brands ($5.2 million) spent the most on teen-directed radio advertising. Marketers of dairy products ($5.6 million), carbonated beverages ($2.2 million), and juice/non-carbonated beverages ($1.4 million) spent the most on teen-oriented print advertising. In-school marketing by all food and beverage companies decreased from $186 million in 2006 to $149 million in 2009.
Food and beverage companies were involved in 120 cross-promotional marketing tie-ins with movies, TV shows, and animated characters in 2009, up from 80 in 2006. Companies also spent $8.9 million on youth-directed advertising that preceded or appeared in video games and movies.
Fast food chains ($12.3 million) and breakfast cereal companies ($3.4 million) spent the most on child-directed philanthropic marketing. Dairy ($1.8 million), soda ($1.7 million), juice/non-carbonated beverages ($1.5 million), and fast food chains ($1.4 million) spent the most on teen-directed philanthropic marketing.
Some 90% of companies engaged in online marketing in 2009, with breakfast cereal and pre-sweetened cereals being the most advertised food products on child- and teen-oriented websites. Moreover, nine of the top 10 consumer goods advertised on 13 of the most popular virtual worlds for children were foods in 2009.
However, while two million children ages 2-11 visited one of the 73 food company websites during a typical month in 2009, few sites averaged more than 100,000 visitors, with the exceptions being Millsberry.com (284,000), HappyMeal.com (189,000), MyCokeRewards (177,000), and McWorld.com (139,000). [Editor’s note: Millsberry.com ceased operations in 2011.]
Fewer than half of food and beverage marketers target children and teens by gender, race, or ethnicity. And no brands reported reaching youth based on income level.
Have Kid-Targeted Foods Become Healthier?
The FTC report analyzed 625 food and beverage products on key nutrients and food components to find the overall nutritional profile of the children’s food marketplace has improved. That said, the majority of these improvements were modest.
For example, the average whole grain content of cereal marketed to children increased by 1.6 grams per serving. The report also finds that the cereals most heavily marketed to children are less nutritious than cereals marketed to all ages.
Beverages marketed to children and teens averaged 20 fewer calories per serving in 2009 than in 2006. However, these same drinks averaged more than 20 grams of added sugar per serving in 2009. Plus, soda brands that marketed to teens in 2009 via new media channels averaged 10% more calories and added sugars than soda brands that advertised to teens using traditional media channels.
Many of the most notable changes in beverage brands’ marketing occurred in the area of in-school marketing. Calories from drinks available in schools dropped 30% from 2006 to 2009, and now 35% of in-school drinks marketed to children and 29% of those marketed to teens are water or 100% juice products.
Yogurt products marketed to children and teens in 2009 had 20 fewer calories per serving and half the saturated fat of those marketed to children and teens in 2006. Yogurt products also contained 13% more of the daily value for calcium per six-ounce serving in 2009 than in 2006. That said, three quarters of child-directed and 50% of teen-directed yogurt products featured yogurt with high levels of sugar.
The nutritional content of youth-targeted prepared foods improved on some measures but stayed the same in others. Sodium content of these foods dropped between 2006 and 2009, but saturated fat held steady. Calories increased by 16% and sugar by 50%.
Food fast chains have made their menus healthier over the past few years. Children’s meals are almost universally more nutritious than other meal and main dish items. For instance, 100% of children’s meals met FDA standards for “low calorie,” compared to 7% of other meals and main dishes. Similarly, 64% of children’s meals met standards for low saturated fat, versus less than 1% of main menu items. Furthermore, fast food chains were more likely to market their healthier menu items in new media channels than via traditional media.
Does Self-Regulation Work?
Companies that abide by self-regulatory guidelines accounted for 82% of 2006 spending on children’s food marketing and 89% of 2009 spending. It’s challenging to form a consensus on whether companies that participate in these efforts are more effective when advertising to children than companies that don’t participate.
The FTC notes that the criteria for “nutrients to limit” is more difficult to achieve than the criteria for components to encourage. Another potential challenge is that franchisees, independent distributors, and local bottlers for participating brands do not always adhere to the member companies’ pledge commitments. And while paid product placement by companies that participate in self-regulatory commissions is not allowed, these companies frequently turn a blind eye to unsolicited placement. In other words, candy makers may not provide the candy bar seen on Nickelodeon’s Drake & Josh, but they aren’t making any moves to stop Drake from eating it.
Source: Federal Trade Commission, Michelle Rusk, Bureau of Consumer Protection, 600?Pennsylvania Ave. NW, Washington, DC 20580; 202-326-3148; mrusk@ftc.gov; www.ftc.gov.
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