A forum on the issue of food marketing to kids will take place today on the heels of newly released research results that show kids eat more after seeing ads for food on TV. The Federal Trade Commission and the U.S. Department of Health and Human Services is hosting the forum in Washington, D.C., which will gather food industrialists, consumer and trade groups and politicians to hear what food companies plan to do in the cultural fight against childhood obesity. "Weighing in: A Check-Up on Marketing, Self-regulation and Childhood Obesity" will feature data that is expected to show the progress of companies such as McDonald's, Kellogg and Campbell Soup in marketing healthier food and messages. Mary Sophos, senior vice president of the Grocery Manufacturers Association, says that members of the Children's Food and Beverage Advertising Initiative will assure the assembled today that a minimum of half of all ads to children will be for healthier food. Eleven major food companies have made voluntary commitments through the Council of Better Business Bureaus' Children's Food and Beverage Advertising Initiative, launched last fall. Policies are expected to include nutrition standards for foods advertised to children and restrictions on the use of licensed characters. Last month, Kellogg Co., which makes Froot Loops, said it would phase out advertising its products to children under age 12 unless the foods meet specific nutrition guidelines. The company was responding to a threatened lawsuit by the Boston-based Campaign for a Commercial-Free Childhood and the food lobby group Center for Science in the Public Interest (CSPI). CSPI will hold its own teleconference today at 12:30 p.m. to discuss the initiatives presented. Walt Disney Co. has said it will allow its characters to be used only in the advertising and marketing of healthy foods. And Kraft Foods Inc. in 2005 adopted nutritional guidelines for food advertising aimed at children. Trade groups such as the Association of National Advertisers feel the industry is doing its part. Dan Jaffe, executive vice president/government relations at the ANA, says he hopes that those gathered today will be satisfied with what the food and beverage sector is doing and ask where the federal and state governments are in all this. "I see no sign of a major effort to redesign cities that make it easy to bike, easy to play, which is essential if messaging by the advertising community is going to fully be able to reach the goals we all have, which is turning back trends in regard to obesity," he tells Marketing Daily. To no one's surprise, the food industry has downplayed the effect of its multi-billion efforts to sway consumers old and young to buy its products--saying that its messages don't persuade people to overeat, but instead build brand loyalty. The new research from Britain suggests otherwise. In one study, researchers showed kids between the ages of 5 and 11 a cartoon preceded by 10 ads. One set of kids saw ads for toys; the other saw ads for food. Afterward, the kids were allowed to sample healthy and less-healthy bowls of food. The kids who saw the food ads ended up eating 14 to 17% more calories than the group that saw the toy ads, according to the study published in the medical journal Appetite. The results were more dramatic among the second test group of 9- to-11-year-olds, who ate from 84 to 134% more calories after being exposed to food ads. None of the foods offered to the groups of kids was included in the ads they saw.
Dell plans to hold an interactive scavenger hunt on Saturday that will get consumers racing through major cities across America to solve eight clues. The efforts aim to promote the recently launched Inspiron 1521 notebook computer. Instructions for the event will come to participants via text messages and e-mails. The hunt takes place between 9 a.m. and 1 p.m. local time in Atlanta, Austin, Texas; Chicago, Dallas, Los Angeles, Miami, New York, San Francisco and Seattle. Dell will set up "Dell Lounges" at starting locations, such as Los Angeles' House of Blues, New York's Roseland Ballroom and Boston's Buffalo Billiards. Teams of two will get an envelope with a game board, directions and clues that lead to eight unique sites in the cities. When contestants arrive at each site, they receive a verification stamp on their game board. The first team in each city to reach the finish point within the time limit and with all the verification stamps wins. The 16 winners will receive a Dell Inspiron 1521 notebook computer valued at about $1,000. The Inspiron series of notebooks has screen-sizes 14 to 17 inches. The recently launched line comes in eight colors, such as flamingo pink, sunshine yellow and alpine white. Contestants who return to the lounge after the contest can enter a sweepstakes to win $5,000. Scavenger hunts became a "risky business" after two separate events held earlier this year by Cartoon Network and Cadbury Schweppes created havoc in Boston, says Matt Lindley, executive creative director at Boston ad agency Arnold Worldwide. "It comes during a time when we ask people to become more involved with campaigns, even submit real videos," he says. "We don't want to put anyone in harm's way, so these days we try to plan events in a more controlled environment." The Cartoon Network marketing stunt forced the head of the Cartoon Network to resign after a security scare in Boston closed major roads for hours. Authorities got a series of 911 calls about suspicious devices on Jan. 31 after discovering that blinking electronics had been planted around Boston to promote kids' series Aqua Teen Hunger Force. Shortly after the Cartoon Network escapade in February, Cadbury Schweppes called off its Dr Pepper promotion in Boston after city officials feared that crypts in the 347-year-old Granary Burying Ground, where Benjamin Franklin's family rests, would be desecrated by potential millionaires searching for a coin. Participants can register for the scavenger hunt by going to dell.com/yoursishere and clicking on the banner ad that reads "Connect the Dots."
With consumers bedazzled by choices of HDTV formats, the Walt Disney Studios Home Entertainment and Panasonic are putting their heft behind the latter's Blu-ray technology for HDTV. The companies are launching a national grassroots "Magical Blu-ray Tour" to promote Blu-ray at 18 malls nationwide to promote the technology with a huge exhibit of interactive kiosks, viewing stations and a small theater that shows Blu-ray in action. The issue for Disney and Panasonic is that while Blu-ray has about 70% market share in high-definition content, many consumers don't use Blu-ray discs. According to Durham, N.H.-based Leichtman Research Group, of the nearly 24 million households with HDTVs, only about half of them watch high-definition programs because many don't realize they have to subscribe to a special service. "There are so many high-definition-enabled households not taking full advantage of its capabilities, and we hope to change that with the Disney Magical Blu-ray Tour," says Dick Cook, chairman of The Walt Disney Studios, in a release. The tour begins in Los Angeles and will show, among other things, Disney/Pixar films like "Cars" and "Meet the Robinsons" in HDTV. There will also be live demos, with up to 12 interactive stations. It will also visit San Diego, San Francisco, Portland, Ore., Seattle, Washington, D.C. and other major markets. Visitors in each market will be able to register to win a Blu-ray home entertainment package, including a player and library of Disney Blu-ray discs. Leichtman Research Group also said in a survey last fall that one in six U.S. households now has at least one high-definition-capable TV, versus one out of every 14 households just two years ago. The annual income of HDTV households is 42% above average. Twenty-six percent of households with annual incomes of more than $50,000 have HDTVs, versus 7% of households with annual incomes less than $50,000.
With Congress set to vote next week on strict fuel-efficiency standards passed by a Senate panel this spring, the National Automobile Dealers Association (NADA) is pressing Congress this week to kill the Senate's proposed fuel-economy. Congress will vote on whether to raise the Corporate Average Fuel Economy (CAFE) standard, requiring average fuel economy for all passenger vehicles to reach 35 miles per gallon by 2020, with 4% improvements each year after that until 2030. NADA is instead urging representatives to back H.R. 2927--introduced on June 28 by Rep. Baron Hill (D-Ind.) and co-sponsored by Rep. Lee Terry (R-Neb.)--who are advocating a 30 to 40% improvement in CAFE over the next 15 years, amounting to 32 to 35 mpg CAFE by model-year 2022. Its argument is that consumers won't buy vehicles that get 35 mpg, and will instead opt to keep their current cars and trucks, defeating the purpose of the mandate. Dale Willey, NADA chair, said in a release: "There's a fine line between mandating more fuel economy and meeting consumer needs. Just because Congress sets an unreasonable CAFE standard that doesn't mean that consumers will buy these vehicles. If they can't get the vehicle that meets their needs, they'll keep the ones they have, and that would defeat the goal of increasing fuel economy." NADA's argument is that, to meet those requirements, automakers will have to make smaller, less powerful vehicles that carry less cargo, fewer people and compromise safety. And that they will have to raise prices to pay for fuel economy technology, adding between $2,000 and $5,000 per vehicle. NADA says in a release yesterday that the Hill-Terry option permits different standards for cars, trucks and SUVs, "protecting the diversity in vehicles that American consumers demand," and that "the measure gives automakers enough lead-time to develop the technology needed to meet the new standards." A fight is likely since Sen. Carl Levin (D-Mich.) reportedly says he'll filibuster the vote; Sens. Ted Stevens (R-Alaska) and Trent Lott (R-Mo.) are likely to oppose, and Sen. Bill Nelson (D-Fla.) reportedly will argue for a 40 mpg CAFE, with Sen. John Kerry (D-Mass.) arguing for 31 mpg by 2015 and 35 by 2020.
Wipe the sweat off your brow: It's time to think about tweed, heavy sweaters and boots, with the National Retail Federation predicting that back-to-school spending will hit $18.4 billion this season. "Families with school-age children are expected to spend $563.49 on back-to-school merchandise, up 6.9% from last year's $527.08 average," the trade group says. The bad news, though, is that spending on clothing and accessories--the biggest part of the families' back-to-school budget--is expected to be flat, with consumers spending an average of $231.80, compared with last year's $228.14. (The NRF, which polled more than 8,200 families, says clothing and accessories will account for $7.6 billion in sales.) Parents planning on holding the line on clothing expenses could translate into big-ticket heartaches for struggling retailers, which have been counting on a strong back-to-school selling season to get profits back on track. J.C. Penney, for example, is already slashing its online prices, touting price cuts of 20 to 50% on its back-to-school clothes, before the serious shopping has even begun. (The NRF says 45.2% of consumers plan to start shopping three weeks to one month before school starts, 32% begin one to two weeks before, and 5.4% wait until the week before school begins. Only 14.6% shop up to two months before the big day.) And Gap Inc.'s Old Navy, which has been hammered by its competition recently, is hyping its brightly colored denim jeans (in crimson red, yellow, cobalt blue and purple) as well as the season's alternative to the skinny jean: the Wide-Leg Denim Trouser. Nor is there great news for the discount stores. While the NRF survey says discounters remain the most popular destination for back-to-school shopping, fewer consumers plan to shop there--just 67.6% of parents, down from 72.2% last year. All other categories--office supplies stores, drugstores, department stores and specialty stores--are likely to see an increase in traffic. About 21.4% of families will make at least one back-to-school purchase online. Of course, parents aren't pulling all the freight. The NRF survey found that pre-teens are expected to chip in approximately $15.38 of their own money for back-to-school items, while teenagers will spend, on average, $31.19 of their own cash.
Energy-drink marketer Glaceau plans to bolster its ad efforts -- but the initiative is apparently unrelated to its acquisition by Coca-Cola last month. However, Coke does have plans for the brand's international expansion. Coke's President-COO Muhtar Kent said Tuesday that Glaceau was looking at "ramping up advertising" before Coke's $4.1 billion purchase and that has "not changed in any way or form," despite Coke's long-standing expertise in the area. One example: A campaign with national reach starring actress Jennifer Aniston for SmartWater. Glaceau, known also for its VitaminWater, has focused on "mainly very localized marketing up to now," Kent said. Glaceau has a roster of sports superstars who serve as endorsers. It's used billboards in the New York market, as well as some viral marketing tactics, but Kent suggested wider-reaching efforts like the Aniston push are on tap. Coke is keeping Glaceau's management team in place and, while it will work with that team collaboratively, it indicated it would give it considerable autonomy. Evidence of Coke's faith is its shifting marketing management of Powerade to Glaceau (which also goes by Energy Brands) weeks after the acquisition. Kent made his comments on a conference call to announce Coke's second-quarter results. Also on the call, CEO Neville Isdell said international expansion for Glaceau is coming. So are efforts to spread the brand further in North America. Isdell said "significant returns on our Glaceau investment" should be expected. Isdell indicated the Glaceau acquisition is proof of Coke's commitment to continue growing domestically, where it has struggled even as international results have been strong, and propel the company at-large. In the second quarter, net revenues dropped 9%, to $1.9 billion, in North America. The period included launching a new more-traditional design on Classic Coke's cans. Pepsi recently has unveiled a more futuristic look. Executives continued to express support for its "Coke Side of Life" campaign that Isdell has called "a global hit." It was the subject of multiple Super Bowl spots and just won awards at the recent Cannes ad festival.
American adults are increasingly skeptical of mortgage advertising, according to a new study from Harris Interactive, which outlines the general shape of consumer sentiment amid the sub-prime lending debacle. As the study indicates, mortgage advertisers have pushed the envelope too far, with 66% of adults viewing mortgage advertising as "not credible" and an additional 22% finding it "not at all credible." Attitudes toward home mortgage products were linked to the type of product being advertised. Thus, traditional fixed-rate mortgages had the most positive reception, with 71% reporting a favorable attitude. This dropped to 52% for home-equity loans, 27% for no downpayment and 25% for "reverse" mortgages--the bogeyman of the sub-prime lending market. Older consumers were generally more knowledgeable about the variety of mortgage products than younger respondents. The Harris poll, which surveyed 2,383 adults online May 8-14, has serious implications not only for the financial institutions hawking mortgages, but also for the advertisers and media planners who help them execute sales. The subprime lending hangover is deepening as lenders endure a second year of bad publicity. After accounting for $640 billion of U.S. mortgages in 2006, the market will probably experience a 25 to 30% volume decline in 2007, according to Bose George, an analyst with Keefe, Bruyette & Woods. But ad messages haven't adapted to the changing environment--calling into question how in tune advertisers are with their target audience. Specifically, they are failing to convey the appropriate messages to skeptical consumers seeking more transparency and ease of comparison in mortgage rates. A recent article by Patricia A. McCoy in the Harvard Journal on Legislation, titled "Rethinking Disclosure in a World of Risk-Based Pricing," found that "numerous subprime ads are tantamount to affirmative misrepresentations." Specifically, McCoy found two main areas of advertising deception under the terms of the Truth in Lending Act. First, "TILA allows sub-prime lenders to tout their best rates, without disclaimers and regardless of the fact that numerous sub-prime customers will not qualify for those rates." Second, TILA also "permits lenders to dangle alluring teaser rates before consumers without notifying them how high their interest rates might go following rate reset." In effect, she adds, this means that "sub-prime lenders can entice customers with rosy prices that are not available to weaker borrowers, hike the price after customers pay a hefty application fee, then raise the price again at closing."