Econ-Atrocity: The 800-Pound Ronald McDonald in the Room

by Dollars and Sense

An Econ-Atrocity, brought to you by the Center for Popular Economics.

Econ-Atrocity: The 800-Pound Ronald McDonald in the Room
By Helen Scharber, CPE Staff Economist
Jan. 4, 2007

When your child’s doctor gives you advice, you’re probably inclined to take it. And if 60,000 doctors gave you advice, ignoring it would be even more difficult to justify. Last month, the American Academy of Pediatrics (AAP) issued a policy statement advising us to limit advertising to children, citing its adverse effects on health. Yes, banning toy commercials might result in fewer headaches for parents (“Please, please, pleeeeeeease, can I have this new video game I just saw 10 commercials for????”), but the AAP is more concerned with other health issues, such as childhood obesity. Advertising in general—and to children specifically—has reached astonishingly high levels, and as a country, we’d be wise to take the doctors’ orders.

Advertising to kids is not a new phenomenon, but the intensity of it is. According to Juliet Schor, author of Born to Buy, companies spent around $100 million in 1983 on television advertising to kids. A little more than 20 years later, the amount earmarked for child-targeted ads in a variety of media has jumped to at least $12 billion annually. That’s over $150 per boy and girl in the U.S. And it’s not as though kids only see ads for action figures and sugary cereal; the other $240 billion spent on advertising each year ensures that they see ads for all kinds of products, everywhere they go. According to the AAP report, “the average young person views more than 3,000 ads per day on television, on the Internet, on billboards, and in magazines.” Ads are also creeping into schools, where marketers have cleverly placed them in “educational” posters, textbook covers, bathroom stalls, scoreboards, daily news programs, and bus radio programming.

If advertising to children is becoming increasingly ubiquitous, it’s probably because it’s becoming increasingly profitable. Once upon a time, kids didn’t have as much market power as they do today. The AAP report estimates that kids under 12 now spend $25 billion of their own money annually, teenagers spend another $155 billion, and both groups probably influence around $200 billion in parental spending. Not too surprising, considering that 62 percent of parents say their children “actively participate” in car-buying decisions, according to a study by J.D. Power & Associates (see the “Car makers direct more ads at kids” link below.) Marketers are also becoming more aware of the long-term potential of advertising to children. While they may not be the primary market now, they will be someday. And since researchers have found that kids as young as two can express preferences for specific brands, it’s practically never too early to begin instilling brand loyalty.

But while small children have an incredible memory for commercial messages, they may not have developed the cognitive skills necessary to be critical of them. In 2004, the American Psychological Association (APA) also called for setting limits on advertising to kids, citing research that “children under the age of eight are unable to critically comprehend televised advertising messages and are prone to accept advertiser messages as truthful, accurate and unbiased.” Many people take offense at the idea that we might be manipulated by marketing. Aren’t we, after all, intelligent enough to make up our own minds about what to buy? The research cited by the APA, however, shows that children are uniquely vulnerable to manipulation by advertising. Marketers therefore should not be allowed to prey on them in the name of free speech.

Such invasive advertising to children is not only an ethical problem. The American Academy of Pediatrics cited advertising’s effects on health through the promotion of unhealthy eating, drinking and smoking as the main motivation for setting limits. Children’s health issues certainly merit attention. The Center for Disease Control, for example, has found that the prevalence of overweight children (ages 6 to 11) increased from 7 percent in 1980 to about 19 percent in 2004, while the rate among adolescents (ages 12 to 19) jumped from 5 percent to 17 percent. In addition to physical health problems, Schor argues that extensive marketing has negative effects on children’s emotional well being. In her research for Born to Buy, Schor found links between immersion in consumer culture and depression, anxiety, low self esteem and conflicts with parents. The big push to consume can also lead to financial health problems, as many Americans know all too well, with credit card debt among 18- to 24-year-olds doubling over the past decade.

Not even the staunchest critics of marketing to children would argue that advertisements are completely at fault for these trends. Yet, the commercialization of nearly everything is negatively affecting children’s well being in rather profound ways. Why, then, is hardly anyone paying attention to the 800-pound Ronald McDonald in the room? Perhaps it’s because advertising appears to be a necessary evil or a fair tradeoff – maybe little Emma’s school couldn’t afford a soccer team without Coke on the scoreboard, for example. Or perhaps some would argue that parents who don’t approve of the commercial culture should limit their kids’ exposure to it. (See the Kids and Commercialism link below for tips on parenting kids in a commercial culture.) Increasingly invasive marketing techniques make it practically impossible to simply opt out of commercial culture, though. Thus, decisions to limit marketing to children must be made by the country as a whole. Sweden, Norway, Greece, Denmark, and Belgium have already passed laws curbing kid-targeted advertising, and according to 60,000 pediatricians, if we care about the health of our kids, we should too.


Resources

American Association of Pediatrics,
Policy Statement on Children, Adolescents, and Advertising – December 2006.

American Psychological Association,
“Television Advertising Leads to Unhealthy Habits in Childen, says APA Task Force” – February 2004.


Jennifer Saranow, “Car makers direct more ads at kids,” Wall Street Journal, November 9, 2006.

David Burke, “Two-year olds branded by TV advertising”.

Center for a New American Dream, Kids and Commercialism.

Juliet Schor, Born to Buy: The Commercialized Child and the New Consumer Culture, (New York: Scribner, 2004).

Center for Disease Control, Facts about Childhood Overweight.

© 2007 Center for Popular Economics

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1/11/2007 05:28:00 PM