Marketers and media owners are counting the cost following U.K. regulator Ofcom's surprise decision to end junk-food advertising to all children under 16.
Under the ban, U.K. media owners could lose $75 million in ad revenue in 2007. Hardest-hit will be the dedicated children's channels, which will lose up to 15% of ad revenue. For all commercial broadcasters, the lost ads represent up to 0.7% of their income, according to Ofcom's own calculations.
Ofcom's ruling includes a total ban on advertising foods high in fat, salt and sugar (referred to as HFSS), not only around children's programming but also in youth-oriented and adult programs which attract a lot of viewers under 16. Many of the marketers involved have voluntarily stopped targeting young children in recent years, and moved their campaigns onto youth channels such as MTV, believing they were safe in targeting teenagers.
'Surprising and unexpected'
Michiel Bakker, exec VP-managing director of MTV Networks U.K. and Ireland, said: "Ofcom's surprising and unexpected decision to extend the ban on all HFSS food and drink advertising to include 10- to 15-year-olds has been done without consultation. This judgment opens up a whole new debate because in our view 10- to 15-year-olds are completely different from under-9-year-olds."
When it comes to advertising to children, Europe is a patchwork of self-regulatory measures and outright bans. Until now, the U.K. has leaned toward self-regulation. Hoping to fend off legal action in the U.K., KFC and Burger King both ended all toy promotions, and Coca-Cola, Cadbury, Kraft, Burger King and McDonald's Corp. all promised not to advertise to children under 12. The Incorporated Society of British Advertisers drafted a voluntary code banning the use of cartoon characters, licensed characters and celebrities who appeal to children in commercials.
But it wasn't enough. Ofcom delivered a second blow to marketers with the news that it will apply a controversial "nutrient-profiling scheme" to decide which foods are HFSS.
Marina Palomba, legal director of the Institute of Practitioners in Advertising, said: "We are very concerned by this new change of direction by Ofcom. What this means in practical terms is that a product such as Marmite, which is 100 years old and full of micronutrients, will be banned because it exceeds the salt level permitted by the scientifically flawed nutritional-profiling scheme adopted."
Marmite, which has a very strong taste that people either love or hate, falls into the banned category because it is judged by the amount of salt per 100 grams, even though Marmite is spread so thinly that 100 grams is about 50 servings.
Ads for low-fat cheese, butter and dark chocolate also will be banned.
Individual marketers, trying to appear responsible in the face of alarming childhood-obesity levels, are reluctant to criticize the measures.
Media owners are more outspoken. Jane Lighting, chief executive of broadcaster Five, which airs popular children's shows, said: "This is a tough decision, and we are disappointed it is even more draconian than the stringent measures that Ofcom originally proposed. These restrictions will deny us substantial revenue and make the economics of producing children's programs a lot more difficult in the future."
The U.K. rules are clearer and may be easier to implement than restrictions the French are still wrangling over. Food marketers in France were supposed to either add a health message to ads for any manufactured food or beverage except water, or pay a tax equal to 1.5% of their annual ad budget toward campaigns for more-healthful eating. The French law was supposed to go into effect this year, but its provisions are still unclear.