FTC Conducts Hearings on Ads Aimed at Children Summary

  • Last updated on November 10, 2022

The Federal Trade Commission’s examination of children’s advertising concluded that advertising to children was inherently unfair, but the commission did not mandate formal restrictions.

Summary of Event

Prior to the early 1970’s, most complaints concerning television advertising focused on adult-oriented messages. During the 1960’s, advertisers acknowledged children as a special target market and began developing campaigns specifically geared to them. Parents, recognizing the potential impact that advertisers could have in the shaping of their children’s values, began to organize and protest. The most visible and vocal protest group, Action for Children’s Television Action for Children’s Television (ACT), was formed in Boston, Massachusetts, in January, 1968, with Peggy Charren as its chairperson. Initially ACT focused on the content of television programming, but its attention soon shifted to the role of advertising. After attempting to influence the networks directly, by 1970 ACT turned to the federal government for assistance. In February of that year, ACT spokespersons met with representatives of the Federal Communications Commission Federal Communications Commission (FCC) and presented a petition requesting that there be no sponsorship and no commercials on children’s programs; that no performer be permitted to use or mention products, services, or stores by brand name during children’s programs; and, as part of its public service requirement, that each station provide programming to children for at least fourteen hours per week. Advertising;and children[children] Federal Trade Commission;advertising [kw]FTC Conducts Hearings on Ads Aimed at Children (Nov., 1978) [kw]Hearings on Ads Aimed at Children, FTC Conducts (Nov., 1978) [kw]Ads Aimed at Children, FTC Conducts Hearings on (Nov., 1978) [kw]Children, FTC Conducts Hearings on Ads Aimed at (Nov., 1978) Advertising;and children[children] Federal Trade Commission;advertising [g]North America;Nov., 1978: FTC Conducts Hearings on Ads Aimed at Children[03420] [g]United States;Nov., 1978: FTC Conducts Hearings on Ads Aimed at Children[03420] [c]Marketing and advertising;Nov., 1978: FTC Conducts Hearings on Ads Aimed at Children[03420] [c]Trade and commerce;Nov., 1978: FTC Conducts Hearings on Ads Aimed at Children[03420] Pertschuk, Michael Charren, Peggy Burch, Dean

The FCC, under the leadership of chairperson Dean Burch, was sympathetic to the group’s concerns and asked for comments on ACT’s proposed guidelines. The responses from sponsors and broadcasters were vehemently negative. The hearings did, however, prompt attention in the media. Simultaneously, a second group, the Council on Children, Media, and Merchandising Council on Children, Media, and Merchandising (CCMM) focused specifically on food products aimed at the children’s market. A founder of the group, a former member of the White House Conference on Food, Nutrition, and Health, testified that children’s breakfast cereals provide little more than “empty calories.”

Concern regarding the impact of television advertising to children continued to rise. By July, 1971, more than eighty thousand letters had been received by the FCC in support of the ACT proposals. Later that year, Commissioner Burch announced a permanent children’s unit within the FCC. ACT, not content with relying on the FCC for action, turned to the Federal Trade Commission (FTC). The group petitioned the FTC to impose a ban on all television advertising to children for toys, food products, and vitamins. By the summer of 1972, the group began to meet with some measure of success. Three major vitamin manufacturers agreed to withdraw their ads aimed at children. In January, 1973, the National Association of Broadcasters National Association of Broadcasters (NAB) announced changes in the Television Code that would prohibit hosts of shows from advertising to children and began to limit the number of minutes per hour of airtime that could contain children’s advertising. In March, 1974, the Council of Better Business Bureau Council of Better Business Bureaus established the Children’s Advertising Review Unit.

By the mid-1970’s, however, proponents of reform had discovered that although they achieved some isolated victories, major changes were difficult to attain. A series of proposals were submitted to the FTC and rejected by the broadcasting industry, and attempts to arrive at mutually agreeable guidelines were abandoned in 1974. In November of that year, the FCC issued a report at the conclusion of a three-year study. It noted that “broadcasters have a special responsibility to children” and that “special safeguards may be required” to protect children from the actions of advertisers. However, the commission, expressing a preference for industry self-regulation, did not adopt any of ACT’s proposals and actually decided against requiring specific changes in children’s programming and advertising practices. A lack of unequivocal research evidence on the impact of television advertising on child development was a major reason given for the decision.

Over the next few years, a stream of research studies focused on the impact of television advertising on the cognitive and emotional development of children. A 1977 National Science Foundation report reviewed policy-related statements from federal, industry, and consumer-group sources and developed a summary list of ten policy issues. This review, along with the results of scientific studies, was summarized and presented to the FTC. In 1978, the FTC published the Staff Report on Television Advertising to Children. This report called for a complete ban on commercials aimed at children too young to understand the true selling intent of the advertisements.

Under a series of Federal Trade Commission chairpersons (Miles Kirkpatrick, Lewis Engman, Calvin L. Collier, and Michael Pertschuk), the issue of advertising to children had received significant attention. In the early 1970’s, the commission began taking action against advertisers, charging them with deceptive practices. In 1977, the commission proposed what would have been the most far-reaching and damaging set of regulations to date. The trade regulation rules, dubbed the “kidvid rule,” would have banned all advertising to children on television at times when children in a particular age group composed a certain percentage of the audience (approximately 20 percent); banned advertising of products that contain more than a certain amount of sugar by weight; and required advertisers to sponsor health or nutritional disclosure messages in proportion to the amount of food advertising directed at children.

Concern over the effects of television advertising aimed at children can be traced to the early 1960’s, when the NAB adopted a set of guidelines regarding the advertising of toys. Over the succeeding years, children’s television advertising emerged as an issue of national concern.

Broadcasters and advertisers attempted to regulate their own business to avoid formal regulations on the part of government agencies. At the time of the FTC hearings in the late 1970’s, there were at least two major voluntary codes that imparted recommended guidelines to advertisers.

The National Association of Broadcasters, in its advertising guidelines, recognized that children, especially those of preschool age, are highly dependent on the guidance and direction of the adult world around them. Since children, especially when unsupervised by adults, may not be able to judge the credibility of what they watch on television, the NAB thought that it was the ethical responsibility of the industry to protect them from their own susceptibilities. The NAB further recognized, however, that advertising to children can be an important source of information for children regarding not only specific goods and services but also many aspects of society and the world in which they live. This NAB code, presented in 1976, indicated that everyone involved in the creation, production, and presentation of advertising to children has a responsibility to ensure that such material avoids being exploitative of or inappropriate to a child’s still-developing cognitive abilities and sense of value. The code then went on to state specific requirements regarding truthfulness, proper disclosure, the use of exhortative language, and the reflection of appropriate social values. The code made specific recommendations regarding certain product categories (such as toys, food, and clothing) and certain practices, such as special offers and the use of premiums and prizes.

The second code was proposed by the Children’s Advertising Review Unit of the National Advertising Division (NAD) of the Council of Better Business Bureaus. The NAD was part of the self-regulatory mechanism created by advertisers, advertising agencies, better business representatives, and consumer groups. Its guidelines were predicated on five basic principles. First, advertisers should always take into account the level of knowledge, sophistication, and maturity of the audience to which their message is primarily directed. Children’s limited capability for evaluating the credibility of what they watch should be considered. Second, children are imaginative, and advertisers should not exploit the imaginative quality of children. Third, advertising can play an important part in the education of children, and therefore information should be truthful and accurate. Fourth, advertisers were urged to capitalize on the potential of advertising to influence social values. Fifth, the prime responsibility to provide guidance to children remains with parents, and advertisers should play a role in fostering constructive parent-child relationships.

By 1977, it had become apparent that the issue of children’s television advertising had become important both among a large segment of the populace and within government agencies. The nomination of Michael Pertschuk as head of the Federal Trade Commission by President Jimmy Carter heralded the administration’s commitment to the issue. Pertschuk, through his involvement with the Senate Commerce Committee’s hearings on the children’s breakfast cereal market, had defined himself as a champion of the cause of child protection in the marketplace. He and his fellow commissioners launched an inquiry into advertising and children. The commission released its staff report in April, 1978. At the time, there was widespread disagreement among consumer groups regarding the scope of the problem and an outcry on the part of affected business constituencies, which charged Pertschuk with an antibusiness and proconsumer bias. Legal action initiated by a business lobby disqualified Pertschuk from voting on the issue.

In November, 1978, the FTC began the most exhaustive hearings held up to that time concerning children’s television advertising. More than two hundred witnesses were called. Advertisers sensed that the “reasonably prudent” rule, which says that a commercial is not deceptive as long as a “reasonably prudent” individual could correctly evaluate the truthfulness of the claim, could be used against them, as children could generally be classified as imprudent. In order to forestall formal restrictions, the television industry and advertisers stepped up their self-regulatory actions. Cereal companies reduced the sugar content of their products and began to emphasize nutritional qualities. The American Broadcasting Company (ABC) American Broadcasting Company announced a reduction in the number of its Saturday morning commercials.

By early 1980, it became apparent that industry lobbyists had prevailed. FTC rule making was made subject to congressional veto without presidential intervention, and “unfairness” as a criterion for judging children’s advertising was dropped from the FTC’s auspices. Arguing that marketplace forces could determine appropriate commercial levels better than could regulators, the FCC in 1984 rescinded all limitations on the amount of commercial content, whether directed at children or at adults.

Significance

Research into the effects of television on children and the debate surrounding the issue continued. Senator Al Gore commented in 1989 that if one were designing a hypothetical world, few people would support the idea of putting little black boxes in every home and sitting every child in front of those boxes to view twenty thousand messages a year to get them to buy things. That is, however, the situation facing children in the United States. Despite the intense attention paid to issues relevant to children’s advertising, the government failed to ban or control the practice on any large scale.

Evidence indicates that the amount of advertising during breaks in children’s programming increased during the 1980’s. In addition, entire programs were built around products for children, including the “My Little Pony” and “Masters of the Universe” toys. Critics charged that these programs amounted to little more than thirty- or sixty-minute commercials for these lines of toys.

Children as consumers constitute three markets: a primary market, an influence market, and a future market. As a primary market, children spent more than $8 billion of their own money in 1991, and this number more than quadrupled by 2000. As an influence market, children have demonstrated the power to influence parental decision making. Children also represent a future market for products. A common strategy for marketers is to reach consumers when they are young and to make them loyal for life.

Advertisers continued, and in many cases stepped up, their efforts to target children in the years following the 1978 FTC hearings. Cable television networks such as Music Television (MTV), MTV Nickelodeon, Nickelodeon (television network) and Whittle Communication’s Channel One News (on which children watched commercial programming in their classrooms) were developed with young consumers as their primary target market. Critics contended that some forms of children’s advertising continued to be abusive. Particularly controversial has been the role that commercial advertising plays in children’s cognitive, attitudinal, and behavioral tendencies.

Some consumer advocates and lawmakers continued to press for stricter limits on what can be advertised to children and when. In many ways, the issues did not change. The major areas of controversy focused on the amount of advertising time aimed at children and on advertising in certain product categories such as food, toys, and alcohol.

In late 1987, the FCC launched a new investigation to determine if it should reconsider limits on commercial time in children’s programming. It also reconsidered whether children’s programs based on toys are actually “program-length commercials” and, if so, how they should be regulated. ACT and new pressure groups continued to lobby for action. The result of this pressure and the outcome of the investigation was the passage of the Children’s Television Act in 1990. Children’s Television Act (1990)[Childrens Television Act]

The act gave the FCC the power to enact new guidelines regarding the amount of advertising on children’s programming. The act defined children as twelve years of age or younger. The act stated that broadcasters were legally required to demonstrate that they have complied with the statutory obligation to present educational and informational programming. The FCC was legally required to limit all commercial matter in order to protect the unique child audience and was further required to hold broadcast licensees to the highest standard of responsible advertising practices. Congress stated that the Children’s Television Act was passed in order to protect the nation’s children from the excesses of commercialism and to nurture their minds through programming that not only entertains but also educates and informs. This legislation was enacted when it became apparent that self-regulation among advertisers and broadcasters would not effectively limit the amount or control the content of advertising aimed at children.

On January 2, 1992, the FCC enacted additional guidelines that limited per-hour commercial matter on cable and broadcast television to 10.5 minutes on weekends and 12 minutes on weekdays. Despite these restrictions, sales of commercial advertising on children’s television programs remained strong. This continued increase in children’s advertising is one of the factors used by advocacy groups that call for more stringent regulations. The development of digital television technology and channels led to calls in the early twenty-first century for more regulation of such channels, for amendments to the Children’s Television Act, and for imposing requirements concerning educational and information programming. Advertising;and children[children] Federal Trade Commission;advertising

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Barry, Thomas E. Children’s Television Advertising. Chicago: American Marketing Association, 1977. Brief work addresses the key issues in the debate regarding children’s television advertising. Includes the full text of several codes recommended by industry and consumer groups.
  • citation-type="booksimple"

    xlink:type="simple">LaMay, Craig L., and Newton N. Minow. Abandoned in the Wasteland: Children, Television, and the First Amendment. New York: Hill & Wang, 1995. Argues that broadcasters have used the First Amendment as a way to avoid their responsibilities as defined in the Children’s Television Act of 1990.
  • citation-type="booksimple"

    xlink:type="simple">McNeal, James U. Children as Consumers: Insights and Implications. Lexington, Mass.: Lexington Books, 1987. Examines the psychological development of children as they learn to be consumers. Discusses the means through which advertisers target children and how children respond to their influence.
  • citation-type="booksimple"

    xlink:type="simple">_______. The Kids Market: Myths and Realities. Ithaca, N.Y.: Paramount Market, 1999. Discussion of the children’s marketing movement by a professor of marketing at Texas A&M University and a pioneer of the movement.
  • citation-type="booksimple"

    xlink:type="simple">Palmer, Edward L., and Aimée Dorr, eds. Children and the Faces of Television: Teaching, Violence, Selling. New York: Academic Press, 1980. Collection of twenty-one articles addresses the issue of television’s impact on children. Seven of the articles specifically address the impacts of advertising and attempts to regulate the industry.
  • citation-type="booksimple"

    xlink:type="simple">Ward, Scott. “Compromise in Commercials for Children.” Harvard Business Review 56 (November/December, 1978): 128-136. Succinctly addresses the debate regarding children’s advertising. Summarizes the positions taken by both sides of the debate and presents an alternative to regulation based on research-based educational methods.

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