Europe's laws on children's advertising could impact American agencies Royalty, Greenwich Mean Time, and EuroDisney aren't the only differences between the United States and Europe. In the ad world, they can be as different as night and day. One arena in which this is especially true is children's advertising.
The debate over how much television advertising should be directed to children will likely reach a crescendo in Europe early next year. That's when Sweden, which has some of the most rigorous restrictions on children's advertising in the world, becomes head of the executive office of the European Union (E.U.). Swedish leaders have promised to make children's advertising a topic for E.U. action. American ad agencies, lobbyists, and trade negotiators all have something at stake.
"We are watching international developments very closely, especially the debate over children's advertising," says Hal Shoup, head of the AAAA's Washington Office. "The issue is a lightning rod. What happens in Europe and the United States will be a strong indicator of what to expect for advertising regulation in the global marketplace." Negotiators can probably expect the European Union to adopt a hard line based on Sweden's record in this area. In 1991, Sweden implemented a ban on the advertising of any product directed to children under the age of 12. The ban was part of an agreement that led to the introduction, for the first time, of commercials on Swedish television channels. Advocates of the ban argued that children could not differentiate between ads and programming and thus should not be exposed to advertising. They contended that this view was widely "supported by research and by the 'common wisdom.'"
To understand the current political dynamic in Europe it is important to remember that, unlike the United States, many countries don't provide any constitutional protection for commercial speech. The heritage and tradition of government is one of far greater centralization in Europe than in the United States, and the system of checks and balances that marks American policy making does not exist in most European countries.
"It really comes down to a very fundamental clash," says Penny Farthing, counsel of the Freedom to Advertise Coalition in Washington, of which the AAAA is a member. "What is the role of government? Should government legislate and regulate the control of information to protect 'vulnerable' groups? Or, as we believe in the United States, should government allow consumers to have as much truthful information as possible about products and choices so that they can make informed decisions?"
At the same time, efforts to ban or restrict advertising to children show every sign of becoming an issue for future debate in the United States. Government regulators recently outlined new rules for gathering information from children on the World Wide Web (see box on page 20), and legislators have hinted at a range of new children's-advertising proposals.
The clash between European and U.S. philosophies can be seen in the current debate over privacy protection policies, a critical area that affects many international marketing practices - especially children's marketing.
Stringent privacy laws adopted recently by the European Union might prevent many American firms from dealing with European consumers, particularly in the global e-commerce arena. These laws require strict legal protection of all potentially private information before "foreign" companies are allowed to sell to European citizens.
But U.S. representatives believe industry self-regulation, rather than government intervention, is the answer. Anticipating the need for a strong self-regulatory effort to counter E.U. calls for rigid laws, the advertising, computer, and e-commerce industries created the Online Privacy Alliance (OPA) in 1997. The AAAA was a founding member of OPA, which now includes more than 20 trade associations and 100 client companies including IBM, Intel, Procter & Gamble, Microsoft, AT&T, Hewlett Packard, and American Express.
U.S. and E.U. negotiators are meeting in an effort to bridge the gap between the two approaches and to find a workable solution protecting the rights of both groups. Heated debate over which system is better for consumers marked a December 1999 meeting between Clinton administration negotiator Barbara Wellbery and E.U. official Gerard de Graaf.
"We should watch these privacy negotiations very closely," says a Washington insider. "Right now the European Union is in control. Everyone wanting to do business in a global network will have to meet their requirements, and they are much more difficult than those in the United States."
Even a compromise between the two approaches could mean bad news for U.S. firms looking for unfettered access to consumers. Moreover, any compromise could provide new fuel for advocates of stronger privacy protection in the United States.
Axel Edling, director general of the Swedish Consumer Agency, recently summarized the Swedish position, stating that "in no circumstances should advertising be directed to children." While adults have the background to know they need more information before making a purchasing decision, Edling says that children under the age of 12 do not have such background. Moreover, he claims that "parents don't want advertisers to take over the education of their children."
While Sweden is the only European country with a total ban on television advertisements aimed at children, Greece's government recently reaffirmed a ban on all toy advertising on television between 7 a.m. and 10 p.m. A number of other countries appear to be sympathetic to the suggestion of restricting children's ads.
Spokespeople from Greece and Sweden report that the restrictions in their countries are firmly in place and are unlikely to be changed or removed. However, analysts have claimed that the Greek ban has had a measurable and negative impact in the marketplace, including higher toy prices, inferior product quality, and fewer high-quality children's television programs.
The AAAA and other groups have turned their full attention to children's advertising, and to the privacy issues. For advertising lobbyists, the question is larger than individual proposals. It's a matter of how to avoid any detrimental effects from competing philosophies.
"The principle that supports a free flow of consumer information about legal products has been endorsed, to a large extent, in this country by the Supreme Court and enforced by an effective self-regulatory system and the Federal Trade Commission," says the AAAA's Shoup. "That's the basic model we believe is essential for the wheels of commerce to move smoothly and expansively in the global markets of the next century. Not everyone shares our view, and the ultimate resolution may very well hinge on the outcome of the children's advertising debate."
Linda Dove, AGENCY. Winter 2000 Issue.
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