FTC Backs Self-Regulation

Jim Edwards

Brandweek

July 31, 2008

NEW YORK The Federal Trade Commission, in its report on the marketing of food to kids, handed the food industry a massive victory this week in its fight to avoid regulation over the childhood obesity issue.

The report found no area of kids-oriented food marketing that would require regulation. Instead, the FTC called for more companies to join the industry's voluntary self-regulation group, the Children's Food and Beverage Advertising Initiative, established by the Council of Better Business Bureaus in November 2006.

In only one area did the FTC appear to have views that pose a threat to Big Food's status quo: What counts as a kids' TV show.

The report noted that American Idol, American Dad, Family Guy and The Simpsons "commanded the largest percentage share of teens 12-17 in the audience during the 2005-06 television year." But because only 20 percent of the shows' combined audience consists of children, they are counted as adult programs in terms of self-regulation.

"The data serve to illustrate the point that children and teenagers are exposed to a great deal of advertising that may be targeted to a general audience comprised mainly of adults," the report said. "On average, more than 2 million teens watched American Idol, and more than 1 million watched American Dad and Family Guy during the 2005-2006 time frame . . . more than 3 million children watched American Idol, and more than 1 million watched Unan1mous and The Simpsons."

The FTC found that unnamed marketers used those shows to reach kids with junk food ads: "One carbonated beverage company, however, acknowledged that ad placements on these shows were part of its marketing strategy to reach teens. In addition, at least two companies have affiliated their brands with shows such as American Idol in order to reach children and teens -- one through toy premiums for children's meals and the other through sponsorship of the American Idol Live! Tour."

The FTC did not name the marketers, although PepsiCo, Coca-Cola, Red Bull and Rockstar were among the 44 companies that received a demand for information in preparation of the report.

The definition of a kids' show is important because, currently, under the self-regulation initiative, 13 food companies (that produce a majority of the food marketed to children) have pledged either to not advertise to kids under 12, or to only advertise healthy food to that segment.

The TV show issue is "the one thing that makes me nervous," said John Feldman, a partner at Reed Smith, Washington, which represents food companies. Feldman called it a potential future "battleground." He added: "It's the one place where the FTC is not in sync with self-regulation -- I do not think that's where CARU is." (The Children's Advertising Regulation Unit is the voluntary division of the CBBB that hears disputes over kids' advertising.)

Diana Garza Ciarlante, a representative at Coca-Cola, echoed Feldman's sentiment. "Evidence suggests that young people over 12 understand advertising messages. It's also important to note that a wide variety of Coca-Cola brands are advertised on family programming and collectively, they represent less than 20 percent of the figure quoted here . . . American Idol and The Simpsons are family entertainment programs," Ciarlante said.

Dan Jaffe, evp of the Association of National Advertisers, said he would oppose any move to restrict business placed on those shows: "Over and over again it has been made clear that advertising to adults should be 'adult,' and we don't want to lower our discourse to the level of the sandbox. It's very hard to start saying, 'Gee, you can't advertise anywhere because someone's child may see it.'"

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