Alcohol Advertising

1
Alcohol Advertising

• Targeting Youth and Minorities

2
Huge sums are spent annually on advertising

• 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-logod items
• means that alcohol industry spent about 5
  billion on advertising and promotion in 2001

3
Alcohol advertising appeals to underage youth

• 1996 study of children ages nine to eleven found
  that children were more familiar with Budweisers
  television frogs than Kelloggs 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

4
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

5
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

6
1999 FTC Report on the success of self-regulation

• 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
• advertising placement
• advertising content
• product placement

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1. Advertising 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

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• 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

9

• 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

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2. Advertising content

• 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)

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• 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

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3. Product Placement

• 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

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The 2003 FTC Update

• In March, 2003 Congress directed the FTC to
• determine whether the industry had adopted
  recommendations regarding self-regulation from
  the 1999 report
• 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

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1. Flavored Malt Beverages (FMBs)

• 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

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• 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

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• 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

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a. Advertising placement

• 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

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b. Advertising content

• 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

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c. Effect of marketing on minors

• 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

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2. The Status of Advertising Self-Regulation

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

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a. Third-Party Review

• 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

22
BBB 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

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• 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

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• 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

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• 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

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• 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

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b. Advertising Placement

• 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

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c. Advertising Content

• 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

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d. Product Placement

• 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

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• 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

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• 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

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Criticism of the FTC Report

• 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

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Youth Exposure to Alcohol in 2001

• 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

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Alcohol Advertising and Minorities
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The Target Market

• 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

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Malt Liquor

• 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

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• 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

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• 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

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Advertising

• 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

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Whats new in 2004/2005?
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1.Drinking becoming more common among teenage
girls than boys

• Drinking is increasing among teens
• Rate of increase greater for girls than boys
• Increase appears to be advertising-related

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• 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)

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• Biggest change was in ads for low-alcohol drinks
• Alcohol iced tea
• Wine coolers
• From 2001-2002
• Boys exposure increased 46
• Girls exposure increased 216

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2. Cable TV advertising for liquor is increasing

• 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

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3. Distilled Spirits Council making public code
review board decisions

• 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

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• 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