\:." J - UNITED STATES GOVERNMENT DAT', April 30, 1979 memorandum NeedelmanNi'h, ,"PLYTON=, PresidingMorton Officer SUBJECT, Children s Advertising TRR No. 215-60 TD, Eunice Dickerson Legal and Public Records Please add the following supplemental material to the public record in Category LL: LL-53 Letter dated April 16, 1979, from John D. Abel, Ph. D., with attachments, Tables I, II and III. r. 5785 Buy U. S. Savings Bonds Regularly on the Payroll Savings Plan , " LL- Department of Telecommunication 322 Union Building Michigan State University East Lansing, Michigan 48824 April 16 , 1979 Mr. Morton Needelman Presiding Officer Children s Advertising Federal Trade Commission Washington , D. C. 20580 Dear Judge Needelman: During my March 19, 1979 testimony you requested that I supply you with a supplement to my report entitled The Child Audience for Network Television Programming and Advertising " which was submitted on November 22 , 1978. The supplement you requested concerns the estimated loss to networks if advertising for a) Highly Sugared Products , b) Games, Toys, Hobbycraft, and c) Restaurants and Drive- Ins was banned in network programs having 50%, 30% or 20% or more children (age 2- 11) in the audience. These data are provided in the attached tables. Please recall that these data are based on a sample of three months (February, May, and November) of 1977. During February, May and November 1977 there were 55, 591 network originated commercials. The estimated network revenue for these commercials was $980 656 900. These data are from Broadcast Advertisers Reports. Highly Sugared Products I included the following product categories in the Highly Sugared Product group: Highly Sugared Cereals , Candy, Regular Gum, Non- Cabonated Beverages, Cookies, Cakes , Pies, Pastries, Desserts and Dessert Ingredients, Ice Cream, Raisins and Regular Carbonated Beverages. These are listed separately in Table I for network programs having 50%, 30%, and 20% or more children (2-11) in the audience. I also separately listed two other product categories which mayor may not be included in the Highly Sugared Product group. These product categories are Canned Fruit and Fruit Juices. The answers to your questions regarding Highly Sugared Products are as follows: In network programs having 50% or more children in the audience there were 640 network originated commercials for the three months of 1977 for Highly Sugared Products. The estimated network revenue for these commercials was $11, 057, 200. If a ban was imposed on the advertising of all Highly Sugared Products in network programs having 50% or more children in the audience I estimate that about 3% (2. 95%) of all network commercials would be affected or 1. 13% of all network advertising revenue. These data are contained in Section A of Table I which is attached. 5786 page 2 In network programs having 30% or more children in the audience there were 897 commercials for the three months of 1977 for Highly Sugared Products. The estimated network revenue fpr these commercials was $12 716 000. (Ads for Canned Fruit and Fruit Juices are excluded here. ), If a ban was imposed on the advertising of all Highly Sugared Products in network programs having 30% or more children in the audience I estimate that 3. 41% of all network commercials would be affected or 1. 30% of all network advertising revenue. These data are contained in Section B of Table I which is attached. In network programs having 20% or more children in the audience there were 091 commercials for the three months of 1977 for Highly Sugared Products. The estimated network revenue for these commercials was $18 559, 600. (Ads for Canned Fruit and Fruit Juices are excluded here. ) If a ban was imposed on the advertising of all Highly Sugared Products in network programs having 20% or more children in the audience I estimate that , 76% of all network commercials would be affected or 1. 89% of all network advertising revenue. These data are contained in Section C of Table I which is attached. Games , Toys, Hobbycraft In network programs having 50% or more children in the audience there were 296 ads for the three months of 1977 for Games , Toys and Hobbycraft. The estimated network revenue for these ads was $8 483, 900. If a ban was imposed on the advertising of Games, Toys and Hobbycraft in network programs having 50% or more children in the audience I estimate that 2. 33% of all network commercials would be affected or 0. 87% of all network advertising revenue. These data are contained in Section A of Table II which is attached. In network programs having 30% or more children in the audience there were 457 ads for the three months for Games, Toys and Hobbycraft. The estimated network revenue for these ads was $9, 870, 800. If a ban was imposed on the advertising of Games , Toys and Hobbycraft in network programs having 30% or more children in the audience I estimate that 2. 62% of all network commercials would be affected or 1. 01% of all network advertising revenue. These data are contained in Section B of Table II which is attached. In network programs having 20% or more children in the audience there were 488 ads for Games, Toys , Hobbycraft. The estimated network revenue for these ads was $10, 874, 200. If a ban was imposed on the advertising of Games Toys and Hobbycraft in network programs having 20% or more children in the audience I estimate that 2. 68% of all network commercials would be affected or 1. 11% of all network advertising revenue. These data are contained in Section C of Table II which is attached. Restaurants and Drive- Ins In network programs having 50% or more children in the audience there were 105 ads for Restaurants and Drive- Ins. The estimated network revenue for these ads was $2 075, 000. If a ban was imposed on the advertising of Restaurants and Drive-Ins in network programs having 50% or more children in the audience I estimate that 0. 19% of all network commercials would be affected or 0. 21% of all network advertising revenue. These data are contained in Section A of Table III which is attached. In network programs having 30% or more children in the audience there were 124 ads for Restaurants and Drive-Ins. The estimated network revenue for these ads was $2 356 500. If a ban was imposed on the advertising of Restaurants and Drive-Ins in network programs having 30% or more children in the audience '7Q'7 - - page 3 I estimate that 0. 22% of all network commercials would be affected or 0. 24% of all network advertising revenue. These data are contained in Section B of Table III which is attached. In network programs having 20% or more children in the audience there were 182 ads for Restaurants and Drive-Ins. The estimated network revenue for these ads was $5, 965, 700. If a ban was imposed on the advertising of Restaurants and Drive- Ins in network programs having 20% or more children in the audience I estimate that 0. 33% of all network commercials would be affected or 0. 61% of all network advertising revenue. These data are contained in Section C of Table III which is attached. Ban on Advertising of All Three Product Categories Although you did not request the informtion during my testimony I suppose the logical question is, what would he the effect on networks if advertising for all three product groups (Highly Sugared Products , Games , Toys, Hobbycraft, and Restaurants and Drive- Ins) was banned on network programs having 50%, 30%, or 20% or more children in the audience? I have estimated that effect in the following paragraphs. Canned Fruit and Fruit Juices are excluded from the Highly Sugared Products group. 50% or more children in the audience. If advertising for Highly Sugared Products, Games, Toys, Hobbycraft, and Restaurants and Drive- Ins was banned in network programs having 50% or more children in the audience I estimate that 5. 47% of all network ads would be affected or 2. 20% of total network advertising revenue. 30% or more children in the audience . If advertising for Highly Sugared Products, Games, Toys, Hobbycraft and Restaurants and Drive-Ins was banned in network programs having 30% or more children in the audience I estimate that 6. 26% of all network ads would be affected or 2. 54% of total network advertising revenue. 20% or more children in the audience. If advertising for Highly Sugared Products, Garnes, Toys, Hobbycraft, and Restaurants and Drive- Ins was banned in network programs having 20% or more children in the audience I estimate that 6. 77% of all network ads would be affected or 3. 61% of total network advertising revenue. I hope this information will be of value to you. If you have additional questions that my data can answer t please contac t me. Sincerely, Associate Professor JDA:acs Attachments: 5788 --------- -------- -------- ------------ TABLE 1. Estimated Loss to Networks if Advertising for Highly Sugared Products was Banned in Network Programs Having 50%, 30%, or 20% or More Children in the Audience. Network Programs with 50% or More Children (2-11) the Audience To tal Network Commercials Network Programs for Three Product Category with' 50%+ Child Months 1977 591 Audience Total Network Estimated Advertising Revenue for Three Months $980 656, 90( Est. Total To tal Comm. (000) Network Comm. Network Est. Highly Sugared Cereals 997 5741.1 1. 79 Candy 469 4059. Regular Gum 404. Non-Carbonated Beverages 417. Cookies 280. Cakes, Pies Pastries 154. Desserts Dessert Ingredients Ice Cream Raisins 10. Regular Carbonated Beverages TOTAl FOR HIGHLY SUGARED PRODUCTS 1640 057.