Advertising 7

Children's Television Advertising:

An Ethical Morass for Business

and Government

PETER TURK

Peter B. Turk is Associate Professor at the William Allen White School of JuuriuiU\m ut the University of Kan.sas. He received ti B.S. ill husiiu'.s.s admini.stralion from Ohio State University, an M.S. in advertising from the University of Illinois and a Ph.D. in mass communicution Ihiw) from the University of Wisconsin-Madison. His professional experience in advertising includes work with Ketchiim. McLeod and Grove. Itu. Dr. Turk has puhiished a te.xthook on advertising media and currently hold.', an hTC ^runt concernin}.; the i'ffects oj celebrity endorsement in advertising an children's perception, e.xpectatums and preferences.

ABSTRACT The confrontation between marketers and broadcasters and the FTC

over regulation of children's television advertising illustrates the effect of ethic confiict on public policy.

Ethic theory describes circumstances where instinctive and personai values of "right" are contested with situational consequences. Such ethic dilemmas are apparent in both corporate and government positions on the issue. Business publicly professes concem for child v/elfare but appears captive of market exigency. The FTC staff is similarly caught between a moral certitude akin to a crusade and the situational reality that its proposals are too severe for acceptance. The paper suggests the product of such conflicts is the abrasive and contentious atmosphere we find in the current debate.

The controversy over children's television adver-tising is a challenge to understanding and objectiv- ity. The public policy conundrum has been created by issue complexity and by the attitudes of the protagonists—the Federal Trade Commission and marketing and broadcasting corporations. The issue addresses questions of demanding complexity. Those evaluating debate must consider reform through child psychology, nutrition, econometrics and constitu- tional law. For even the most experienced and thoughful this is intellectually demanding.

Objective examination ofthe children's issue is also complicated by the rhetoric of the debate. The gov- ernment view is presented by the FTC staff which has demanded rulemaking hearings to consider dramatic reform of children's tv advertising. The proposals for reform are incorporated in a document titled FTC Staff' Report on Television Advertising to Children, released in February 1978 (I). The report states the FTC staff is reasonably convinced younger children are helpless before commercials directed to them. The staif is similarly assured there is a danger in promoting heavily sugared foods to children. They state the en- couragement of decay-producing food commercials constitutes a health hazard to children unable to resist sweet temptations. The proposed FTC remedies for these suggested evils includes the most drastic power mandated to the FTC, prohibition. The statf asks that the Commission order a curtailing ofall advertising in children's programming for "sugar-laden"' foods and a further curtailing of all commercials directed to younger children. To justify these severe remedies the report, mindful of the nation's concern for children, poses a powerfully sympathetic and partisan case.

Children's Television Advertising: An Ethical Morass for Business and Government

Business response to the contentions ofthe FTC is also designed to solicit public sympathies. Broadcas- ters and marketers describe the report as ill-conceived and economically disastrous for children's television. Business also represents the government interest as further meddling by bureaucratic bodies in private enterprise. This ploy strikes a responsive chord with those outraged by inflated federal expenditure. To intensify public disfavor with the FTC, the private sector charges FTC reforms are intended to dictate how parents should raise their children. These potent public relation themes have kept FTC speech writers occupied.

Given the importance ofthe children's advertising question, it is unfortunate that both business and the FTC resort to polemics. The issue deserves more than regulatory gamesmanship to produce a fair and effec- tive policy for children. Further, if the public is to have an informed view, it deserves better perspectives; those that reflect the self-interests and motivations of each side. And it is important for us to understand the stakes—what each has to win or lose. A portion of the needed insight concerns exploration ofthe ethics be- hind the debate strategies.

This analysis probes the ethic motivations of the protagonists. The ethic determinates of the busi- nessman and the regulator are identifled along with the conflicts in resolving means-ends relations. The examination exposes the balances struck by govem- ment and industry in choosing strategies for the de- bate.

BACKGROUNDING THF CHILDRENS TELEVISION DEBATE

It did not take long for consumer product marketers togaugethe value of children once commercial televi- sion developed (2). Not only was television a persua- sive medium, but it became the primary recreation of many children particularly pre-literates. Eventually, the scramble for child-related profits led to some abu- sive exploitation of children and the Federal Trade Commission began to monitor advertising practices. FTC involvement has led to a number of successful litigations concerning production devices and poten- tially harmful products (3). Informally, the FTC has also encouraged more stringent corporate control over practices. Despite these activities, the FTC and its sister agency, the Federal Communications Com- mission, have been criticized by consumer groups for being too lenient in children's advertising and televi- sion. Since 1970. consumer advocates Action for Children's Television and Council on Children, Media & Merchandising have repeatedly challenged the fed- eral agencies to prohibit television advertising to chil-

dren (4). Reception has varied from mildly affirmative to strongly negative depending upon the priorities of the stafl" and the political personalities of the commis- sioners. The current FTC headed by Michael Pertschuk has been the most receptive. Under Pertschuk's direction a special study group of re- searchers and attorneys has recently produced a 346 page report.

After an intensive review, the staff urged the open- ing of rule-making hearings towards adoption of sev- eral regulations.

a. Prohibit television advertising of all products in programs where there is a "significant" (but un- specified) proportion of children 8 years old and younger.

b. Prohibit television advertising of sugar-loaded foods (unspecified) in programs where there is a "significant" (unspecifled) proportion of chil- dren viewing between 8-11 years.

c. Require nutritional disclosure by manufacturers of food products with lower sugar levels (un- specified) than those of highest cariogenicity (5).

Though the FTC commissioners generally expressed reluctance to impose prohibitions, they agreed on the necessity of hearings (6).

ETHICS AS A CORPORATE AND REGULATORY DETERMINATE

Ethics is a cognitive and affective process which allows man to interpret the consequences of behavior based on notions of right and wrong. It is a scale to weigh means and ends, consequence and beneflt and justification and excuse. Our understanding of such a structure dates to Aristotle. He described the process as a personal/internal morality. Modern civilization has extended ethics to include external forces both religious and earthly. Those describing the external references for ethics say these outside forces compli- cate our decision selection by making us face a conflict of rights. Kenneth Manning identified the choices as the personal or ''deontologic" duty and the external the "teleologic" (7). Deontologic ethics orders deci- sions on our sense of moral right, while the teleologic mandates situational accommodation.

It is the teleologic ethic that has undergone recent interpretation, if not popularizing. Civil disobedience and Watergate events required special behavior ex- planations in recent history. We identified the rationalizations as situational ethics—a reference of expediency. The civil rights marcher and the en- vironmentalist demonstration was justifiable in conflict with logic and law. Certain occasions, de- manded a departure from society's rules to serve a greater welfare. Law has only relative obligation when balanced by circumstantial need (goal) (8).

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As society became familiar with situational ethics, numerous groups justified illegal behavior in expe- dient contexts. Stealing, graft and perjury were ofteti compelled by circumstances. Government confis- cated, wiretapped and intimidated citizens to protect our "security." Business admonished critics by showing teleologic necessity for payoffs, extortion and other industrial sabotage. Society does not always accept this ethical logic but it is sympathetic to the influence of variables beyond control.

Adoption of situation ethics means many of us have two ethic sets to guide decision selection—one a per- sonal reference of moral certitude, the other external for goal attainment. Examination of the children's television advertising controversy is illustrative ofthe interaction of both ethic sets in advocate positions. Ironically, both business and the FTC begin with a common concern for children but the positions quickly diverge as separate ethic balances are struck.

ETHICS OF COMPETITION

The fusillade of criticism towards children's televi- sion makes it difficult to believe marketers and broad- casters are parents and capable of genuine concern for children. Many assume because these industries share an economic interest in children's television that neither can see television's faults. The situation is not that simple. Responsible corporate leaders know chil- dren's cognitive and emotional facilities make them deserved of greater legal protection than adults. Broadcasters know television has an unrealistic influence over children compared to other institu- tions. Both marketers and broadcasters realize small children are least capable of defending against persua- sive commercials and they know that small children view too many.

In these admissions the corporate individual ex- poses the deontologic ethic—knowledge of what should be. Unfortunately these moral references are not in control ofthe decision making. As much as the executive personally believes in child welfare and supports change, the competitive nature of the mar- ketplace forecloses reform. Any conflict in ethic sets is resolved in favor of competitive (teleologic) expe- diency. Examining some market factors will illustrate how competitive conduct directs decision making.

It is difficult to place a specific market value on children's influence on sales. The combination of toy, food and drink markets is a multi-billion dollar effort. Markets of this magnitude attract heavy competition and current Broadcast Advertising Reports show more than 20 RTE cereals, over 25 brands of candy and gum and 15 major toy and game companies com- peting for child preference. These are joined by firms who, though they do not market products directly to

children, use children to lobby parents. This makes a customary marketing dilemma—a large dollar market is splintered by numerous competing brands.

The media expenditures in television illustrate the medium's central role in marketing schemes. Ac- cording to current industry estimates, advertiser in- vestment is recognized children's programming will amount to $450,000,000 in 1978 (9). For broadcasters the prize of near a half billion dollars has intensified competition to attract the advertiser. The key is pro- gramming. In local market activity, the primary day- part for children's programs is late afternoon, known as early fringe. Program period syndicators now offer more than 20 programs (off-net situation comedies, cartoon and live action adventures, etc.) that have competitive children's rating histories. The turnover is great as stations shift titles to improve share posi- tions. In network television children's program com- petition is worse. The following table shows an as- tonishing turnover of programs in only three seasons. It underscores the struggle for advertiser's dollars.

Network Children's Programming

(Saturday Morning Changes)

Season

1974-75 1975-76 1976-77

Total Shows

34 34 32

Renewed for Next Season

20 14 11

% Dropped

41 59 66

Sources: A. C. Nielsen NTI Tele-Radio Age Broadcasting

The value of children's programming to the adver- tisers is that it delivers a large children audience at an efficient cost. FTC proposals would likely shift adver- tisers out of these premium children blocks and make clients seek other program periods to reach children. The obvious remaining choice is prime evening, but as this table shows the cost prospects are not good.

Rating/Cost Comparisons for Children's Viewing

Daypart Avg. Child Rating

Cost Per 30 second

Avg. Cost Per m (children)

Prime (7-9 p.m.) 15.7 $48,000 Fringe (4-6:30 p.m.)* 5.5 13.200* Saturday Mom. 11.8 8.500

* based on 200 markets

$10.75 6 00* 2.05

Source: A. C. Nielsen Tv B.

Faced with over a 500^ increase in cost per thousand, it is questionable if child product marketers would maintain current television budgets. Should marketers opt for print or other media to support children's marketing, broadcasters could not com-

Children's Television Advertising: An Ethical Morass for Business and Government

pensate for the billings lost. The threat of an advertiser pullout would historically parallel the effect of the cigarette advertising prohibition.

Situation circumstances also control individual corporate policies. With so many brands and profit stakes so high it would be unthinkable for individual marketers or broadcasters to institute any unilateral reforms in children's practices. Few companies would: put less sugar in a brand, modify commercial announcements or run fewer commercials. They fear enriching the competition. Corporate managers con- clude losses in sales or loss in ratings cannot be bal- anced by goodwill. Given the economic demands, humanity would have to be secondary ethic.

The result ofthe competitive circumstances is that, despite personal concerns, corporations resist any regulatory intrusion and reject unilateral reform. They will not risk capital in pursuit of moral ethics. Busi- ness, however, is not the only party to ethical com- promise.

REGULATORY ETHICS

Much discussion surrounding the children's adver- tising controversy is aimed at the FTC staff report's content. As noted earlier, the main themes decry the evil of sugar food promotion, declare all commercials directed to young children unfair and urge prohibition of commercials. The tone of the report is not likely to appeal to commercial interests. It is adversarial, ag- gressive and unequivocally pro-consumer. The report style is provocative and is designed to promote de- bate. Obviously, there is little in the report proposals that is easy for business to accept. In fact, the pro- posals may not gain Commission support. By taking a hard line, the staff authors risk FTC approval and invite a vigorous and intensive business defense.

A more moderate proposal would have eased com- mission concerns. A more moderate remedy would have made the harm issue easier to justify. But the staff chose a tougher path. The circumstances are ethic involved and make the FTC staff̂ s strategy somewhat clearer. Proposing a radical remedy

The pivotal issue in the staff̂ s presentation is the recommendation of remedy. Though the FTC has historically been given wide discretional latitude in remedy selection, the courts will challenge if the rem- edy does not fit the practice. With other less severe remedies available, the test is whether prohibition will be accepted by the Commission and the courts. Is prohibition realistic? The odds are against it.

The FTC staffis aware that many take a dim view of any regulation that appears confiscatory. Marketers, forced to abandon rich television-media opportunities

will present a substantial case for economic harm. The FTC staff will have to show a greater State interest in protecting the children. Business will present a First Amendment challenge to prohibition. As the current Supreme Court is supportive of advertising's infor- mational rights (peoples' right to know) any notion of abridgement must be balanced with a greater threat to health and safety. Prohibition of advertising will re- ceive close judicial scrutiny. The courts will test a censorship rule by asking the FTC if prohibition is the "least means'" to remedy the condition. The FTC cannot meet this test unless the case gets stronger. Whatever chance prohibition has depends on how well the FTC proves television is harming children. The evidence for State interest will have to be beyond doubt (10).

Documentation of harm The report presented a carefully considered and

thoughtful series of arguments in support of a conten- tion of harm. The authors sought testimony of social and scientific authorities and cited numerous psy- chological studies. Despite this effort, the evidence is not yet conclusive. The case for abridging commer- cials to younger children will illustrate.

The FTC staff cited 12 specific studies done by marketing and communication researchers docu- menting television's abuse of pre-schoolers' percep- tions (11). In any area of controversy regarding psy- chological effect it is accepted practice to present substantial amounts ofthe literature before attempting conclusions. Similarly, in experimental areas that have only been producing good data for 10 years, it is expected literature presentations reflect latest findings. In both respects, the FTC report is question- able. A recent National Science Foundation (NSF) report includes a bibliography of research done in- volving children's television advertising (12). While the FTC cited 12 studies. the NSF identified more than 120 available to the FTC staff. Similarly, four of the 12 studies cited by the FTC were completed since 1975 where NSF listed 30 (13)! Would the additional studies have changed the FTC assessment'.' Not likely. While there is still a sizeable body of child research showing unhealthy TV influence, it is arguable if the data is sufficient to satisfy the requisite harm for prohibiting advertising. The staff"s selective use of studies was intended to make the best possible case.

What motivates the FTC to attempt an innovative and dramatic solution? What compelled the defense of a radical remedy? Why risk criticism for using parti- san research methods? Business would have us be- lieve the FTC staff is naive and ignorant in research interpretations and is meddling where it has no exper- tise. Tbis does not appear to be the case. The authors of the report are bright and have had counsel and

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guidance from expert psychological consultants. There is a more logical explanation.

Idealism still exists in Washington and it is not easily masked in the children's issue. For many frus- trating years the FTC has struggled to design a com- prehensive program for the reform of children's ad- vertising. For reasons too numerous to record here, the task was never accomplished. But the desire for reform never left and children remained a priority. A political change in the White House brought changes in FTC personnel and the new staff are determined to succeed where others had failed. In their law school training and in their professional experience these men and women dedicated themselves to the public. the consumer—the underdog. A priority to children was the problem to be addressed. To this select group of men and women the children's cause is a crusade. The morality of their duty overshadows external cir- cumstance.

Ethical idealism isn't the sole variable to explain the FTC staff position. There are practical motives as well. It is well known in regulatory negotiation that both sides purposely overplay threats and harms. Sel- dom does one party propose its least acceptable solu- tion as the opening gambit. Instead one asks for much more than they ever expect to gain, knowing negotia- tion invariably means some sacrifice. Neither the FTC nor business will tell us what they expect to gain or lose in children's television advertising but there are settlement levels at something less than the lines in the public debate. The FTC staff report suggests the worst evils of television advertising to support the harshest but cleanest means to improve the child's environ- ment. It is a calculated risk composed of moral idealism and only a small touch of strategic reality.

SUMMARY

Many decisions in economic life are dictated or manipulated by ethics. In most individuals and or- ganizations, different and separate sets of ethics co- exist to help fashion appropriate responses. Much of our behavior historically has been guided by a deon- tologic ethic or moral sensitivity to right. This is a visceral reference that gives a personal side to respon- sibility. On occasion, external goals or the teleologic ethic, direct decision processing. The goal orientation is tuned to the situation and we revise and adjust interpretation according to these external references. These are circumstances where the personal morality conflicts with external goal seeking. When this oc- curs, the individual or organization must decide which reference or ethic set will guide decisions. It is not always a harmonious balance and dissonance is not unexpected.

The protagonists in children's television advertising

have illustrated the operation of ethic sets. From our analysis we learn that both business and government believe in a special welfare for children, but only one side will let a personal ethic dictate strategy. For the other, the situational ethic is predominate and it de- mands little or no action. Specifically, marketers and broadcasters admit need for reform but bow to the compulsion to sustain competitive advantage. The situational circumstance is exacerbated by govern- ment's desire for radical and harsh remedy. Capitula- tion to prohibition, no matter what the issue, is un- thinkable for the business sector. The FTC staffs dilemma is ethical as well. Regulators have waited too long to make necessary reforms in children's televi- sion and television advertising. Frustrated by their inabihty to foster change and infuriated by commer- cial intransigence, the FTC presents a case of severe abuse and urges a dramatic and innovative remedy. Ignoring the realities circumscribed by the situation (radical remedies are political pariahs) the staff ap- pears compelled to honor a fierce duty ethic: a per- sonal commitment to social responsibility.

The conjoint is an ethical morass, where values and strategies are stretched and distorted. The confronta- tions are likely to be bitter and protracted and it is questionable how much reform will be produced. Delay should be unacceptable but the public has waited 10 years and it will be patient for more. The losers, while we wait to measure the victory of busi- ness or government, are the children.

REFERENCES 1. Federal Trade Commission. (Washington D C : FTC Print) Feb-

ruary, 1978. Hereafter cited as Children's Report. 2. Melody, Children's Television, CNew Haven: Yale tJniversity Press,

1973) pp. 33-55. passim, 3. Among the more notable FTC child actions are: Ideal Toy Co., 64 F.

T.C. 297 0964): Mattel. Inc.. 79 F.T.C. 667 (1971) Topper Corp. 79 F.TC. 681 (1971), ITT Continental Baking C(.., 83 F.T.C. 865 (1973), Benton A B<nx'U-s, Inc., 88 F.T.C. I (1976). Hudson Pharmaceuticals.fi9 F.T.C. 82(1977). 4. Tharn. "Suffer, the Hucksters to Come Unto the Children?" 56

B.U.L. Rev. 651 (1977). 5. Childrens Report, op. cit.. pp. 42-50. 6. Memoranda from Chairman Pertschuk and Commissioners

Elizabeth Dole, Paul Rand Dixon, David Clanton on file at the FTC and William Allen White School, University of Kansas. Hereafter cited as Commissioners' Response. 7. Manning, "Socio-Ethical Foundation for Meeting Obligations of the

Legal Profession," 5 Cumberlund-Samford L. Rev. 237. (1974) 8. Hart. 'Positivism and Separation of Law and Morals," 71 Harv. L.

Rev. 593 (1958) 9. Television - Radio Age. "Children's Television . . . . " Volume 25.

Number 18, April 24, 1978. 10. All commissioners except the chairman expressed concern over prohibiting commercials. See Commissioners'Response, op. cit,, note 6. 11. Other references implied additional and corroborative research but the studies were not named. See notation of Dr, Kenneth O'Bryan's testimony at p, 84 and citations of Congressional testimony at p. 101, 104. Children's Report, o p . c i t . , note 1. 12. National Science Foundation, Research on the Effects of Television Advertising on Children, (Washington D . C : U.S. Printing Office) 1977. 13. N.S.F. Study, op. cit,. Ibid., pp. 15-18,