Food Companies Struggle To Regulate Advergames, Hot-Button Issues

Food companies liberally use "advergames" in their marketing efforts. The difficulty is agreeing on guidelines to monitor the tactic. For instance: How to restrict or curb the use of an online game when a company's product or characters are featured? Such issues are delaying proposed changes to the Children's Advertising Review Unit (CARU), the industry's self-regulatory arm, says a top industry official.

In February, Jodie Bernstein, a Washington lawyer and former FTC official, was charged with proposing updates to the 32-year-old guidelines, and expected to build an industry consensus within a 90- to-120 day period. But agreement on what ground rules to use regarding the hot-button issues of advergames, product placement, and third-party licensing have slowed the process, notes Bob Liodice, President-CEO of the Association of National Advertisers. (Advergames can be offered on platforms other than the Internet.)

Consensus "still needs to be developed," says Liodice, whose organization is participating in the effort. In addition to the ANA and other industry groups, food and toy marketers and media companies are providing guidance on which regulations would be acceptable. Regulators and consumer groups are also expected to weigh in.



Bernstein says a draft of new guidelines has been developed and floated among industry players. But getting comments from various parties, incorporating proposed changes, and coping with intra-company hold-ups have slowed down consensus building. "That's what we're trying to achieve, and we're still working at it," she says.

Bernstein said she expects to send a final version on to the board of directors of the National Advertising Review Council (NARC) by the end of September. She would not comment on how advergames and product placement issues may affect the process.

The role of advergames in children's marketing came to the fore last week when the Kaiser Family Foundation issued a report that found 85 percent of leading food marketers use branded Web sites to market to kids. Advergames were available on 73 percent of the sites. The study looked at 77 sites and found 546 games, including the "Pop-Tart Slalom" and Chuck E. Cheese's "Tic Tac Toe." Kaiser suggested that marketers encourage kids to spend vast amounts of time with the games, finding that 71 percent of the sites promote repeat playing. The study also found only 18 percent of the sites followed current CARU guidelines calling for ad content to be clearly labeled.

The study found that 74 percent of the sites displayed statements of compliance with the Children's Online Privacy Protection Act, and 97 percent provide some information directed at parents regarding privacy.

If the NARC board approves the proposed changes, they would then be open to public comment. After that, the board would presumably alter them or put them in place.

Launch of the review followed a December 2005 report from the Institute of Medicine suggesting that CARU should expand its guidelines to include new forms of marketing. Also, members of Congress and interest groups have made noise about cracking down on marketing to kids via new media. Proponents of limits believe there may be a link between marketing and childhood obesity.

Bernstein says that industry self-regulation--if done properly--allows enforcement of broader, more effective standards than government regulation. "The problem with government regulation in the past has been that the rules don't stick because of First Amendment issues," she says. "The regulations don't stand up to judicial scrutiny. They get struck down, and then you end up worse off than before."

One potential advocate for limits on food marketing to children reportedly said last week that he would not push for government action on the matter. Senator Sam Brownback (R.-Kansas) said he would look for alternate ways to curb the practice.

Says James Guthrie, NARC's President/CEO, in a statement: "We appreciate the thoughtful participation of advertisers, academic experts and others who are devoting considerable time to the guidelines review. We anticipate that their work will serve to ensure an outcome that fairly addresses the concerns raised through the ongoing national dialogue on childhood obesity."

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