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Children Targets of $1.6 Billion in Food Ads
FTC Discloses 2006 Spending in First-Ever Report

By Kendra Marr
Washington Post Staff Writer
Wednesday, July 30, 2008

One in three children in this country are overweight. But, until now, it was unclear how much the nation's largest food and beverage companies spent influencing kids to eat unhealthy foods.

The companies spent about $1.6 billion marketing their products -- mainly soda, fast food and cereal -- to children in 2006, according to a Federal Trade Commission report on food marketing to children released yesterday.

The biggest category, $492 million, was carbonated-beverage advertising. In contrast, the Milk Processor Education Program -- which sponsors the celebrity-studded "Got Milk?" ads -- spent about $67 million on advertising in 2006.

For years, nutrition advocacy groups and researchers have attempted to estimate the amount of youth-targeted advertising, usually pegging it at $10 billion to $15 billion a year.

"We were a little surprised about the dollar value," said Lydia Parnes, director of the FTC's Bureau of Consumer Protection.

Previous estimates included non-food products as well as coupons and discounts at restaurants that targeted adults, perhaps accounting for some of the disparity, according to the commission.

This was the first report with hard facts. Last year, the FTC issued subpoenas to 44 companies, including Coca-Cola, Kraft Foods, General Mills and Procter & Gamble, as well as chains such as McDonald's and Burger King. The commission sought confidential financial data on advertising and promotions targeting children ages 2 to 17. The report, however, did not identify how much companies spent individually, and it did not separate junk food from healthier options.

"More and more we see advertising for kids to get them hooked on high-fat, high-sugar, high-salt diets," said Sen. Tom Harkin (D-Iowa), who commissioned the study in 2005. "Something had to be done. We weren't getting honest information from companies."

Margo Wootan, nutrition policy director of the Center for Science in the Public Interest, said other estimates included items, such as promotion events and travel, that the FTC didn't, knocking $5 billion off previous calculations.

"So much of the data is proprietary that all marketing professors could do is estimate," Wootan said. "We always knew those numbers floating around weren't ideal, but they were what we had."

Still, government healthy-eating initiatives are dwarfed by the $1.6 billion. The Centers for Disease Control's budget for nutrition, physical activity, and obesity is about $41 million for Americans of all ages. The U.S. Department of Agriculture's Team Nutrition, whose goal is to improve children's eating and physical-activity habits, has an annual budget of about $10 million.

Lawmakers' concerns about the rise of childhood obesity -- the percentage of children who are obese has tripled since 1980 -- prompted the commission to conduct the study, but the link between marketing and obesity was not specifically addressed.

"The obesity problem is a complex problem," Parnes said. "It's certainly not only about advertising. It's about fewer physical education programs. It's about the fact that our children watch more TV and play more video games and are more sedentary."

The study measured traditional media outlets, as well as the Web, sponsorship, promotions in schools and packaging. The $1.6 billion, directed toward children ages 2 to 17, represented 17 percent of the total annual marketing budgets for the reporting companies' brands.

Fast-food restaurants spent nearly $294 million on promotions, evenly targeting young children and teens. Cereal advertising totaled $237 million, with a vast majority aimed at children under 12.

Television continues to dominate as the most popular way to reach consumers, as companies spent 46 percent of marketing budgets on this medium.

New media -- including the Internet, digital and viral marketing -- have become an important part of promotional activities but account for only 5 percent of marketing. Web sites, less costly than television, appeal to teens and can feature free ring tones, music and add-ons for MySpace pages. Cross-promotion campaigns, which make up 13 percent of youth marketing, were designed so that young consumers would be reminded of products nearly everywhere they turned.

For instance, in 2006, "Superman Returns" and "Pirates of the Caribbean" were used to promote a number of items such as fast-food meals, frozen waffles, fruit snacks and chips. Ads appeared on television, the Web, packaging, in-store displays and in movie theaters. Limited-edition foods were created in their honor. Young consumers could go online to play movie-themed games and enter sweepstakes. And companies gave out free toys, posters and other trinkets with proof of purchase.

A number of programs aimed at curbing obesity have already swept the business community since the commission collected data for its report -- a study intended as a benchmark to measure those efforts in the future.

Launched last July, the Council of Better Business Bureaus' Children's Food and Beverage Advertising Initiative has enlisted 14 large companies, who have pledged to reduce child-directed advertising or to feature "better-for-you" products in youth advertising.

The Alliance for a Healthier Generation, which aims to fight childhood obesity, is working with major beverage companies and the American Beverage Association to reduce portion sizes, cut calories and remove sugary sodas from schools nationwide by the 2009-10 school year. Snack food companies have also announced nutrition guidelines with the alliance.

Some media and entertainment companies have promised to limit the licensing of popular characters and to promote only healthy foods.

"As a nutrition professional, I talk to companies and hear what they pledge to do," said Wootan. "As a mom, I don't see a big difference in the marketplace yet. When I watch Nickelodeon with my daughter or walk down the aisle of a grocery store, it seems overwhelmingly foods marketed to kids are unhealthy."

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