Nickelodeon Declares It Won't Restrict Ads for Unhealthy Food

If you ask my 5-year old daughter what her favorite TV shows are, the answer would include almost exclusively Nick Jr. shows, from the Fresh Beat Band, to Max and Ruby, to Dora the Explorer. She also likes to spend time playing games on Nick Jr.’s website, and all in all, you can definitely say she’s a Nick Jr. fan. To be honest, so am I – they really produce great shows for kids.

This is why I was very disappointed to read last week that Nickelodeon (a sister network of Nick Jr. – both are subsidiaries of Viacom) said it won’t restrict ads for unhealthy food.

In response to a letter sent to Viacom earlier this month by four senators asking the company to “implement a clear policy to guide the marketing of food to children on Nickelodeon’s various media platforms,” the company responded, “As an entertainment company, Nickelodeon’s primary mission is to make the highest quality entertainment content in the world for kids. That is our expertise. We believe strongly that we must leave the science of nutrition to the experts.”

Interestingly, Nickelodeon's approach is very different from its rival, Disney. Last year, Disney announced that by 2015, it will ban ads on its networks for fast foods and sugary cereals that don’t meet company’s nutrition standards. “We’ve taken steps across our company to support better choices for families, and now we’re taking the next important step forward. The emotional connection kids have to our characters and stories gives us a unique opportunity to continue to inspire and encourage them to lead healthier lives,” Robert A. Iger, Chairman and CEO of the Walt Disney Company said in Disney’s announcement.

The distinction between these approaches makes it a very interesting case. First, it makes you wonder why Nickelodeon is determined to take a different path, especially with the pressure it faces to follow in the footsteps of Disney. Also, does that mean that Nickelodeon is less responsible than Disney? And last, but not least, which approach will prove, eventually, to be more beneficial – Nickelodeon’s or Disney’s?

First, the rationale behind Nickelodeon’s position. The New York Times reports that money is a significant factor. Food is Nickelodeon’s third biggest advertising category (behind movies and toys), accounting for roughly 18 percent of annual sales. The Times also mentioned that income from food advertising has fallen 45 percent in the last five years. Viacom claims that it is “partly because of its own efforts to cut back on ads for certain sugary drinks and fatty foods, and partly because of self-regulation by food companies.”

The Center for Science in the Public Interest (CSPI) analyzed food marketing on Nickelodeon in 2005, 2008, and most recently, in 2012. “In 2012, 10 percent of Nickelodeon’s ads were for food products, down from 23 percent in 2008 and 22 percent in 2005,” it reported. Looking specifically at ads for unhealthy foods, including sugary cereals, candy/fruit snacks and fast food, CSPI saw a decrease in their share from about 90 percent of food ads in 2005, to 80 percent in 2008, to 70 percent in 2012.

Add to these figures the estimate of research analyst Brian Weiser that Nickelodeon’s domestic programming generated about $900 million in advertising revenue in 2011 and you learn what is at stake - annual revenues of about $63-$113 million, which is roughly around one percent of what Viacom makes annually from selling ads on all of its cable channels.

There’s also Viacom's official explanation that this has nothing to do with money but rather with the simple fact that it’s not its job as an entertainment company to decide which advertised food is healthy and which isn’t.

In fairness, we should mention that Nickelodeon, as the Senators’ letter mentions, has already taken some steps to promote healthy lifestyles for children. For example, it dedicates 10 percent of its promotional airtime to health and wellness messaging and restricted the licensing of characters like SpongeBob SquarePants and Dora the Explorer on certain junk foods.

Yet, it seems like Nickelodeon sees a difference between the content it produces, where it takes full responsibility for ads, and other companies' ads, where it believes it should exercise only a limited responsibility. The only problem is that these junk food ads, just like the shows, have an impact on children watching them. According to the Senators’ letter, a 2006 Institute of Medicine report requested by Congress found that television advertisements influenced children’s food and beverage preferences and the requests they make to their parents.

So, will Nickelodeon pay a price for adopting such approach, especially given that Disney has gone the other way?

In general, we would like to think that companies acting more responsibly will also benefit from it and vice versa. I believe this will happen here, because I believe the principle that is at the core of Disney’s approach (that people expect more from Disney and eventually you can’t just entertain people while ignoring the world they live in), also applies to Nickelodeon.

Therefore, even if Nickelodeon’s approach benefits the company in the short-term, it can be much more costly in the long-term when its limited approach toward responsibility will reflect on its brand and put it in a disadvantaged position. Nickelodeon might find out, then, that in an environment where childhood obesity is a growing concern, parents and other stakeholders are less and less tolerant of advertising of unhealthy food, even if it is aired during irresistible shows like Dora the Explorer or SpongeBob.

[Image credit: CSPI]

Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and Parsons The New School for Design, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.