FTC Study: Dollars Spent on Marketing to Kids Much Lower Than Thought

Figure Drops from $10 Billion to $1.6 Billion

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WASHINGTON (AdAge.com) -- It turns out food and beverage marketers are spending $8.4 billion less to target children than initially thought. But some in Congress say it's still too much.

A Federal Trade Commission report on marketing of food products to kids features the first numbers gleaned from actual company marketing documents. The FTC report says food, fast food and beverage makers spent $1.6 billion marketing to children under 17 in 2006.

Assumptions in doubt
But in offering the figure, the FTC report dramatically contradicted a widely used $10 billion estimate made by a college professor. That larger figure, cited in a previous government study from the National Academies of Science Institute of Medicine, had been a foundation of congressional complaints about food marketing to children.

FTC officials and some consumer groups today were at pains to explain the difference between the numbers.

FTC officials said the discrepancy reflects the availability of actual marketing data obtained from companies, the ability to look specifically at marketers of products directed to kids and the decision not to include coupon discounts or the $360 million cost of promotional toys offered with children's meals in examining the total cost. A consumer group official said that the college professor's study had also included marketing of children's food products aimed at their parents.

Today's FTC report found that $870 million was spent on marketing foods to kids under 12 and $1 billion to teens. Because $300 million of that was to both segments, the total amount spent by the 44 companies was $1.6 billion.

Of the total, $746 million -- or 46% -- was spent on TV. Carbonated beverages, fast-food restaurants and breakfast foods represented $1.02 billion or 63% of the total amount spent. The study also reported that cross-promotion of food and beverage products with TV shows, movies and animated characters was extensive, with about 80 programs cross-promoted.

Concerns about 'junk'
The study didn't directly answer whether marketers were pushing so-called junk foods more aggressively in their ads as critics have claimed, but the FTC did express concern about it.

It cited the efforts of the Children's Food & Beverage Advertising Initiative of the Council of Better Business Bureaus and the commitment of 13 companies -- a 14th, Nestle, joined today -- to either drop children's advertising or use it only for more nutritious products. Still, the report says more companies need to get on board and media companies need to adopt their own limits so the only food ads on children's shows is for more nutritious foods.

FTC officials also said that because the report was based on 2006 data, it didn't reflect any effects of the marketers' initiative, and Lydia Parnes, director of the FTC's Bureau of Consumer Protection, cautioned that the FTC wasn't as concerned about the amount spent on ads as what was being advertised.

She was also cautious about drawing conclusions about the role advertising plays in causing childhood obesity.

"The obesity problem is a complex problem. It's not only about advertising," she told a news conference today, saying inactivity, lack of physical education in schools and other issues are factors.

Interest groups react
Reaction to the study was quick in coming.

Advertising groups said the study showed ad spending was a far less extensive a factor than critics charged and contended the initiative would further shrink overall spending and spending on marketing of less nutritional foods.

Margo Wootan, director of nutrition policy for the Center for Science in the Public Interest, suggested that the FTC numbers and the group's research indicated advertising hadn't changed that much since the initiative. She said that while the FTC didn't single out beverage companies, most of the TV ads for carbonated beverages are for higher-calorie versions. She also noted that some big advertisers still aren't part of the initiative, mentioning KFC, Pizza Hut and Chuck E. Cheese among them.

FTC commissioner Jon Leibowitz called the report "a monumental feast of facts and figures" that "leaves a tinge of heartburn." He cited the $474 million spent to market "sugary carbonated beverages to adolescents" and the $520 million spent on advertising and toys to market fast-food children's meals.

Sen. Tom Harkin, D-Iowa, among the strongest congressional critics of the ads, said the report showed "food companies are spending millions of dollars to target children so they can become lifelong consumers of their unhealthy products. And their tactics are working. While our nation struggles with the effects of skyrocketing childhood obesity rates, it is time for corporate responsibility," he said.

Shape up, or else
He warned that if companies don't voluntarily rein in their marketing, Congress might have to act.

"While many food and beverage companies have pledged to market healthier options to kids through self-regulatory programs, I want to see real results and changes in the types of products marketed towards children. If these programs do not produce significant changes -- government will have to act," he said.
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