Statement by Wallace S. Snyder, President & CEO, American Advertising Federation Federal Trade Commission and Department of Health and Human Services Workshop "Weighing In: A Check-Up on Marketing, Self-Regulation, and Childhood Obesity"

July 18, 2007
Washington, D.C.

Twenty-five years ago, the Federal Trade Commission set the course of action for children's advertising in America. After an extensive rule-making proceeding spanning almost five years, the Commission adopted the FTC staff recommendation to terminate rule-making on both legal and policy grounds. The conclusion was that the best way to instruct children about the consumption of foods was not through government intervention, but by "individual companies, trade associations, self-regulatory groups, interested consumer organizations or a consortium of all of them." This public policy has stood the test of time and bodes well for the future.

Those of us involved at that time began the process of encouraging the industry to not only self-regulate its advertising, but to provide positive messages to children and their parents. We began a dialogue that continued over the years and addressed new, emerging issues like "900 number" telephone services and privacy, and intensified in 2005 with the FTC/HHS hearings.

Advertising was already heeding the call from the National Advertising Division of the Better Business Bureau and especially through the Children's Advertising Review Unit. CARU, as you know, monitors all children's advertising to ensure compliance with its strict guidelines. Ads that do not meet CARU's standards are either pulled, or in rare cases, referred to the FTC for further action. The advertising industry self-regulation's unparalleled record of success has been commended by numerous FTC chairmen, including Robert Pitofsky, who, in 1996 called NAD "the best example of self-regulation that I am aware of in American industry."

With that beginning 25 years ago, the industry has been following the FTC recommendation that it do more to self-regulate children's advertising to respond to concerns about food advertising and childhood obesity. Two years ago, the FTC and HHS reviewed what the industry had accomplished in this important area. At that time, food companies described how they had responded by introducing new product formulas, new packaging and changes in how they advertised to children. CARU gave a complete report that demonstrated its success in seeking voluntary changes in how individual foods are advertised to children.

The industry has acted on the recommendations that came out of the 2005 hearing. As Chairman Majoras has noted, the obesity issue, like any other challenge, "requires continued effort and vigilance." As was suggested in the 2005 workshop report, the National Advertising Review Council conducted an extensive review of the Children's Advertising Review Unit and made a number of important changes to its children's marketing guidelines last year.

For the first time, CARU has the authority to target advertising to children that is unfair, in addition to misleading. The guidelines prohibit content that blurs the distinction between advertising and programming in misleading ways, and requires advertisers to clearly distinguish advergaming as such. Concerning food advertising, CARU guidelines specifically prohibit ads that disparage healthy foods, like fruits and vegetables, or ads that promote excessive consumption, like ads showing children consuming more than a serving size of a product.

Our review of the CARU guidelines also led to a new food and beverage initiative that was agreed to by the food companies that advertise the most—comprising over two-thirds of children's food and beverage television advertising expenditures. In 2004, 11 companies announced that they will devote at least half their advertising to children to promote better nutrition and healthy lifestyles, will limit advergaming and will not advertise food or beverages in elementary schools.

As described this morning, these commitments are significant, far exceeding the minimum criteria of the program and will result in meaningful changes in what products the participating companies advertise.

In addition, the Ad Council has become a major player in educating children and their parents and caregivers. Its "Healthy Lifestyle" campaign launched in 2004 with HHS has achieved impressive results. And the Ad Council's Coalition for Healthy Children, initiated in 2005, is providing research and targeted messages to combat childhood obesity.

In short, the industry has responded positively and aggressively to the FTC's challenge to improve its self-regulatory response. There are critics of self-regulation, and many do not believe that any advertising to children is appropriate, nor do they yet believe that business can be trusted to police itself. But it is the FTC's public policy—endorsed 25 years ago and reaffirmed in 2005—that we have been implementing. I believe the industry continues to enthusiastically support this policy and, in fact, will continue to do so into the future.

Finally, the Federal Trade Commission is the federal body in charge of setting public policy in regard to children's advertising. The institution has decades of experience with advertising regulation and a sophisticated understanding of how advertising can work to respond to the concerns of consumers, improve products and ensure consumers greater choice in the marketplace. In 2005, the agency challenged us to do better, and we have and are responding.

This is the consensus of the advertising industry, and personally, I believe the FTC can feel gratified by the progress that has been made.

Read the related press release.