Jan 8, 2016

Unmeasurable Externalities: Advertising and Children

Most discussions concerning advertising to children demand government intervention to reduce it. I suggest that the issue will not be solved soon and parents need to take the issue into their own hands: if you believe that advertising negatively affects your child, avoid subjecting you child to it. This seems like pretty obvious advice; yet, many parents, while submitting petitions to the government, allow their child to watch television for hours a day.

Marketing to children has been growing in intensity since the early 1980s when it got its start due to working parents spending more money, and less time, on their children. This symptom highlights an issue with the structure of working life in Canada (and many other countries): we work more than we have to. But, paradoxically, we have to work a certain amount of hours due to hours-worked being tied to benefits. Marketers took advantage of this situation and the powerful new consumer group that it created. The processes involved with children's advertising have become more sophisticated over the years. Marketers have expanded beyond achieving an immediate marketing goal. If children grow up and become adult buyers, marketers can create lifetime loyalty. In fact, the goal of some advertising to children is not to get the child to purchase the product but to introduce the child to the brand with the intent that later in life the child will become a customer. As an example of this early-life advertising, there was a BMW commercial that aired a few years ago. It showed a young boy that goes to a BMW dealership. The salesperson allows the boy to go into the car, and later gives the boy a business card. The advertisement ends with the implication that the boy will but a BMW once he ages and has the means to. The intent is not to sell a car to a child but to introduce the brand to the children watching the commercial. Brands are instilled into a child at a young age.

There have been a few policy acts that purport to control the amount and type of advertising that marketers can direct towards children. There have been strict laws in Quebec, as wells as a few European countries, that directly concern, and prohibit, advertising to children. In 1978, the FTC attempted to ban advertising to children less that seven years of age claiming that children are often unable to distinguish between advertising and program content.  The general population has come to accept advertising to children as a normal activity. This acceptance leads to a circumstance where children are exposed to hundreds of commercials each day through TV watching.

Ethical consideration concerning advertising to children, I believe, is extremely important. Children are unable to see the fanciful elements of advertisements, As adults, we are able to understand that an advertisement portrays the product in an unrealistic way. We do not expect the product to be as "amazing" as the advertisement shows it to be. If children are being advertised to, marketers should not take unfair advantage of the child;'s inability to rationalize the advertisements. However, marketers are concerned about selling a product and will work within the boundaries of the law to do that. Thus, the government is expected to jump in, but the negative externalities related to advertising to children are extremely difficult to prove, and even more difficult to put a price tag on. Marketers and the Government are concerned about the economics of the situation. This allows children to be abused. As responsible parents we must be aware of the negative affects of advertising on our children and bare the burden of prevention.

Sandra Turner
Relaxing while my child watches her shows in Kelowna BC
July 2014

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