Targeting Youth and Minorities

 According to the FTC, in 2001 $1.57 billion was spent on alcohol advertising in measured media
 television
 radio
 print
 outdoor advertising
 FTC estimated in 1999 that alcohol industry spends two to three times this amount each year to promote products through
 sponsorship
 internet advertising
 point-of-sale materials
 product placement
 brand-logo’d items
 means that alcohol industry spent about $5 billion on advertising and promotion in 2001

 1996 study of children ages nine to eleven found that children were more familiar with Budweiser’s television frogs than Kellogg’s Tony the Tiger, the
Mighty Morphin Power Rangers, or Smokey the Bear
 1998 the Budweiser lizard commercials were the most popular commercials on television
 since 1995 Budweiser beer ads have been the most popular ads for consumers, including teenagers
 junior high students can name more beer brands than presidents
 younger children can sing the jingles and mimic the characters in alcohol commercials

Alcohol advertising and marketing have a significant impact on youth decisions to drink
 study of 12 year-olds found that children who were more aware of beer advertising held more favorable views on drinking and expressed an intention to drink more often as adults than did children who were less knowledgeable about the ads
 study of 1,000 young people found that exposure to and liking of alcohol advertisements affects whether young people will drink alcohol
 USA Today survey found that teens say ads have a greater influence on their desire to drink in general than on their desire to buy a particular brand of alcohol
 eighty percent of general public respondents in a poll by the Bureau of Alcohol, Tobacco and Firearms believed
“that alcohol advertising influences youth to drink alcoholic beverages”

Industry has adopted voluntary codes of conduct through its three trade associations
 Beer Institute--represents the interests of more than 200 brewers that produce more than 90 percent of the beer brewed in the U.S.
 Distilled Spirits Council of the United
States (DISCUS)--represents most of the major U.S. distilled spirits
 Wine Institute--represents over 300
California vintners; members market over 75% of wine sold in the United States

 obtained information from the three associations and eight alcoholic beverage companies
 Anheuser-Busch, Inc.; Bacardi-Martini USA, Inc.;
Brown-Forman Corporation; Coors Brewing Company,
Inc.; Diageo plc; Miller Brewing Company, Inc.; Stroh
Brewery Company, Inc.; and Joseph E. Seagram &
Sons, Inc.
 focused on three areas:
1.
advertising placement
2.
advertising content
3.
product placement

 voluntary industry codes required that
 more than 50 percent of the audience for alcohol advertising be over 21
 FTC report reflected mixed compliance with the codes' requirement:
 half of the companies were able to show that nearly all of their ads were shown to a majority legal-age audience
 other four companies did not fare as well:
 two companies' data showed weeks when many ads were shown to majority underage audiences.
 two others failed to provide reliable information showing the audience for their ads

 report also pointed out that only 30 percent of the U.S. population is under the age of
21, and only 10 percent age 11 to 17
 thus "the 50 percent standard...permits placement of ads on programs where the underage population far exceeds its representation in the population“
 report recommended that the industry raise the standard to no more than 25% of the audience be under 21

 other organizations weighed in on the issue as well:
 Mothers Against Drunk Driving
(MADD) proposes a limit of 10%
 Center on Alcohol Marketing and
Youth (CAMY) suggests 15.8%
 corresponds with the percentage of the population aged 12-20

 voluntary codes prohibit alcohol advertisers from using advertising content that is more appealing to underage consumers than to adults (including 21-year olds)
 each of the three codes also expressly prohibits the use of certain characters or people in alcohol ads:
 actors under 25 (beer)
 children (spirits)
 Santa Claus (beer and spirits)
 sports celebrities or "current or traditional heroes of the young" (wine)

 1999 FTC report noted that industry members appear to make significant efforts to comply with the codes' standards, instructing their staffs and ad agencies to avoid content with greater appeal to kids than to adults
 report also notes that since standard permits ads targeted at 21-year olds, might have "overflow" appeal to younger consumers
 report identifies “best practices” that some companies follow that reduce the likelihood that an ad will have substantial appeal to underage consumers
 e.g., targeting ads to persons 25 and older

 FTC Report noted that in 1997-98 the eight reporting companies placed products in
 233 motion pictures
 one or more episodes of 181 different television series
 alcohol placement occurred
 in 'PG' and 'PG-13' films with significant appeal to teens and children
 in films where the advertiser knew that the primary target market included a sizable underage market
 on eight of the 15 television shows most popular with teens
 report noted that a few companies had taken steps to reduce the likelihood that a substantial underage audience would see their products promoted in movies and on television

In March, 2003 Congress directed the FTC to
1.
determine whether the industry had adopted recommendations regarding self-regulation from the
1999 report
2.
study the impact of the expansion of ads for new flavored malt beverages
 FTC issued its report in September 2003
 FTC report noted that youth drinking remained high in
2002
 one-fifth of eighth graders
 one-third of 10th graders
 half of 12th graders

 FMBs (a/k/a “alcopops”), introduced in the late 1990's, combine characteristics of beer and distilled spirits
 As new products, receive a larger share of advertising dollars than other beer products:
 2% of total beer advertising in 1998
 17% of total beer advertising in 2002

 In 2001, Center for Science in the Public
Interest (CSPI) had asked FTC to investigate whether FMBs were being targeted to minors
 The FTC reviewed whether:
 FMBs were being placed among non-alcoholic beverages in retail outlets
 advertising was targeted to an underage audience
 survey evidence showed that teens were more likely than adults to be aware of and use the products

 FTC found no evidence supporting the first two allegations by CSPI and that the survey methodology used to determine the third was flawed
 In its 2003 investigation, FTC reviewed the following aspects of FMB marketing:
 ad placement
 ad content
 effect of marketing on minors

FTC investigation found that
 over 99% of dollars spent to advertise FMBs on television, radio and print complied with the "50% over 21" standard
 but ads were still placed in venues with substantial underage audience composition
 to minimize this possibility, five companies maintained lists of programs on which they would not place ads; instructed buyers not to place ads on
 MTV or UPN
 wrestling or extreme sports shows
 teen oriented shows such as: Malcolm in the Middle, Gilmore
Girls, Boston Public, Grounded for Life, Celebrity Death Match,
Dawson's Creek, Heaven and Popular (among others)
 another company set a “70% over 21” standard
 two companies did not advertise in print or broadcast media

 FTC subpoenaed planning and other documents that reflected the industry's marketing strategy
 concluded that the intended target market for FMBs was consumers in the 21-27 or 29 year old age group
 In fact, the majority of FMB drinkers were over 27

 FTC was concerned that the sweet taste of
FMBs would appeal to minors and that advertising aimed at those over 21 would have a greater "spillover" effect than for other alcoholic beverages
 evidence collected by the FTC did not provide information about the impact on minors of expanded marketing for FMBs
 however, FTC noted that teen drinking actually dropped between 2000 and 2002, the period during which advertising for
FMBs increased

 FTC examined the extent to which the industry had implemented recommendations in the 1999 report

 1999 Report suggested that self-regulation is most effective when internal mechanisms are supplemented by third-party review
 FTC found that only "modest steps" had been taken to adopt such systems
 as an example of a successful third-party review, FTC cited Coors Brewing Company's agreement to adopt BBB's Advertising
Pledge Program

 upon receipt of a complaint, BBB determines whether an advertising campaign violates the company's voluntary advertising pledge
 if BBB decides the pledge has been violated, may recommend that the campaign be modified or discontinued

 May, 2003 BBB considered a complaint concerning a Coors ad showing an outdoor party at a ski resort
 complaint alleged that
 the ad appeals to snowboarders
 partygoers would be leaving the party in cars
 complaint asserted that the ad violated a
Coors advertising pledge standard:
 “We will not portray or encourage high-risk activities by anybody who is drinking or has been drinking”

The BBB found that:
 pledge defines high risk activities as those that require high degree of alertness or coordination, e.g.
 the operation of motor vehicles
 boating and other water sports
 operation of equipment or machinery
 skiing, climbing, or contact sports
 ad does portray some persons acting in an uninhibited manner
 nothing in the commercial suggests that anyone is leaving or about to leave
 nothing suggests that any person will necessarily be driving within a short period of time after events depicted

 Also in May, 2003 BBB considered a complaint about the Coors "Because
We Can" ad campaign
 complaint alleged violation of nine different provisions of the Coors advertising pledge, including the pledge:
 “to place ads where the audience is at least 60% 21 and older”

 BBB concluded that the ad violated two pledges:
 “will not condone overconsumption or irresponsible drinking”
 “advertising and marketing will be responsible and in good taste”
 Coors disputed the BBB's findings but agreed to withdraw the campaign

1999 Report
 criticized the "50% over 21" standard as resulting in large underage audiences
 recommended that industry members raise standard for placement and do after-the-fact audits of placements
2003 FTC reported that:
 placement compliance had improved "considerably" since 1999 report
 all three associations had amended codes to require
"70% over 21" standard
 two of the three industries require members to conduct periodic post-placement audits

1999 Report
 recommended that companies target ads to persons 25 and older or not place ads with substantial appeal to underage consumers (even though they also appeal to adults)
 some companies responded that since many alcohol consumers develop brand loyalty by age 25, necessary to target drinkers between the age of 21 and 24
2003 Report:
 industry documents show that alcohol industry members do make efforts to target ad content to persons of legal drinking age
 some advertising targeted to youngest legal drinkers continues to risk appealing to minors

1999 Report recommended that product placements
 be limited to movies rated "R" or having mature themes
 not be made in films and programs where underage person is the primary character

According to 2003 Report, companies:
 appeared to restrict alcohol product placements to movies and television shows in mature themes or "R" ratings
 avoided movies with themes that appeal to underage consumers, such as "coming of age" films
 rejected requests to place products in movies that displayed irresponsible drinking, drunk driving, or college drinking

Beer Institute Code has specific provisions concerning product placements; prohibits placement in films that:
 depict underage drinking
 show irresponsible consumption in connection with driving
 are particularly attractive to children or have underage primary characters

A number of organizations complained that FTC simply adopted the facts provided by the industry
Particular concerns are that:
 all advertising aimed a young adults, whether for
FMBs or other alcoholic drinks, will spill over into the underage market
 "It's impossible to construct an advertisement that appeals to a 21-year-old on his 21st birthday and doesn't appeal to someone who's 18 years old or maybe even 16" (CSPI)
 70% rule is still too weak because it doesn't take into account the total number of underage viewers or readers
 E.g., the percentage of underage consumers watching the Super Bowl is small, but the total number is substantial

 According to a series of reports by the Center on Alcohol Marketing and
Youth (CAMY), youth exposure to alcohol advertising on television, in magazines and on the radio remains substantial, despite what is indicated in the FTC Report

Overall, minority groups drink less than whites
However:
 the impact of alcohol on minority communities is greater than that on white communities
 in minority communities, among those who do drink, the heaviest consumers drink
"prodigious" amounts
 Because they are growing in size, minority communities are an attractive target market for alcoholic beverage marketers

 Malt liquor is targeted primarily to urban African-Americans and Latinos
 African American drinkers are four times as likely to consume it as the general population
 African Americans ages 18-24 are nearly five times as likely to consume it as the general population

 although marketed, packaged and sold like beer, it is much more potent than beer:
 alcohol content is as much as 8%,
 compared to an average of 4.6% for beer
 most commonly sold in 40-ounce containers
 twice the content of a regular beer
 single 40-ounce bottle has the same amount of alcohol as five shots of whiskey

 it's cheap
 40-ounce bottles sells for between $1 and $2
 in 1990's was the fastest-growing segment of the beer market
 sales increased almost 25% compared to 5% for beer sales

 early ads used images of sex and power
 Colt 45
 current ads continue those themes but appeal to younger market; use of gangster rap musicians, gang symbolism, hip-hop images, etc.
 St. Ides
 Phat Boy
 billboard advertising particularly intrusive and much more prevalent in minority neighborhoods than white
 study in a Latino community found children see as many as 60 alcohol ads on one-way trip between school and home

 Drinking is increasing among teens
 Rate of increase greater for girls than boys
 Increase appears to be advertisingrelated

 Study published July, 2004 in
Archives of Pediatric and Adolescent
Medicine
 Larger percentage of girls 12-20 were exposed to ads than
 women over 21
 Women 21-34 (prime target of marketing)

 Biggest change was in ads for lowalcohol drinks
 Alcohol iced tea
 Wine coolers
 From 2001-2002
 Boys’ exposure increased 46%
 Girls’ exposure increased 216%

 Effective March 1, 2005 CNN became first national cable news network to accept commercials for distilled spirits
 Joined growing list of national cable channels
 Others involve sports, entertainment or financial programming
 Critics express concern about exposure of children and teens
 CNN counters its audience is concentrated in 25-54-year-old age group

 DISCUS code review board
 Comprised of senior member company representatives
 Advisory board of outside experts from academia, government and broadcasting
 Charged with reviewing complaints about advertising and marketing materials

 Announced March 8, 2005 it would release reports every six months
 Reports would include
 complaints
 response from advertiser
 action taken
 Initial report included 15 complaints