Monitoring and Responding to Alcohol Industry Marketing Strategies in the United States

1. Monitoring and Responding to Alcohol Industry Marketing Strategies in the United States David H. Jernigan Ph.D. Center on Alcohol Marketing and Youth Department of Health, Behavior and Society Johns Hopkins Bloomberg School of Public Health and Director, Center on Alcohol Marketing and Youth

2. Can the alcohol producers’ industry and public health work together? • The alcohol market in the U.S.: • Value of underage drinking: $22.5 billion (17.5% of total consumer expenditures for alcohol in 2001) • Value of abusive and dependent drinking (DSM-IV criteria): $25.8 billion (20% of total consumer expenditures for alcohol in 2001) • Total combined loss to industry if underage and pathological drinking eliminated: 37.5% of sales (Foster et al. 2006)

3. Alcohol producers’ mission “Every action taken by…management is guided by one overriding objective – enhancing shareholder value.” -- 1997 Anheuser-Busch Annual Report

4. Understanding the industry • Understand the different levels of the industry • Producers versus retailers • Liquor versus beer versus wine • Global versus national companies • Divisions in the industry can help public health • See the alcohol “market” as they do – respond on 4 p’s of product, price, place and promotion

5. Product: “Alcopops” • Industry spokespersons have described alcopops as designed for “entry-level drinkers” and those who do not like the taste of beer. • Even though most of them have distilled spirits in them, the industry claimed they were made from beer, so that they could be: • Taxed lower • Sold in convenience stores • Advertised on TV

6. How popular are alcopops among kids? • Most popular with the youngest drinkers. • 76% of current 8th grade drinkers (past 30 days) drank alcopops in the past 30 days. • 73% of current 10th grade drinkers (past 30 days) drank alcopops in the past 30 days. • 65% of current 12th grade drinkers (past 30 days) drank alcopops in the past 30 days. • 36% of current drinkers, age 19 to 28, drank alcopops in the past 30 days. • Of all the groups surveyed, the most likely to drink alcopops were 12th grade girls – 29.6% had an alcopop in the past 30 days. (MTF data, 2004)

7. Alcopops most popular with females in every age group

8. New products • Research findings on effects of alcoholic energy drinks on the drinker: • Subjective perceptions of intoxication decreased (i.e. headache, weakness, dry mouth, perception of impaired motor coordination) compared to effects of drinking alcoholic non-energy drink • However, according to objective tests, motor coordination and visual reaction time were still just as impaired. (ACER 30:598-605, 2006) • AED drinkers more likely to engage in dangerous activities

9. New products… • Shotpaks – 17% alcohol - .99 each… • Featured on the Today show in July

10. New Product Development • Alcoholic milkshakes • Flavors include chocolate, strawberry, caramel • 4% alcohol • Available in Australia and the UK, just like alcopops were initially

11. PRODUCT • Industry tests more than 250 new products per year in U.S. • Product responses include: • Warning labels • Weak as stand-alone strategy • Some evidence may increase support for stronger policies • Need to be well-executed: legible, rotating, in contrasting color and boxed, clear and concise, etc. • U.S. label an “eye test” • Bans on product types or particular products: • Alcoholic energy drinks – Anheuser-Busch and Miller agree not to produce any more, but much more to be done • “Powermaster” • Jello pops • Etc.

12. PRICE • Alcohol demand is elastic: • In the U.S., a 10% increase in price of alcohol would lead to a 7.4% drop in beer consumption, a 4.9% drop in wine consumption, and a 14.7% drop in distilled spirits consumption • International research robust: consumptions and problems decline when prices increase • Particularly effective in reducing youth consumption and problems; however increases tend to decrease consumption in all groups, including heavy drinkers

13. PRICE • Principal price strategy: tax increases • Illicit market must be controlled for tax increases to be effective • Key tax interventions: • Set tax rates across beverages by ethanol content • Adjust tax rates to inflation (or peg to retail or producer prices) • Permit local and state governments to set own tax rates

14. PRICE Source: Cook P., Paying the Tab (Princeton University Press, 2007)

15. PRICE • Other price interventions: • Eliminate happy hours, ladies’ nights, other discounting • Eliminate bulk discounts such as sales in pitchers • Set minimum prices for alcohol • Establish or raise retail license fees to fund enforcement, prevention, education and surveillance activities

16. “Place” interventions • Responsible Beverage Service programs • Involves development of operational policies & training • discontinuing beer sales by pitcher • serving of alcohol in plastic containers in settings where violence is common • limits on # of drinks/customer/hr (identifying & not serving to intoxicated patrons) • minimum age for servers • prevent/managing incidents with potential to become violent • increased food service • having a good physical environment (e.g. lighting outside establishments) • making sure that liquor outlets do not serve as a venue for selling other drugs • implementing codes of good practice

17. “Place” strategies • Increase community involvement • in determination of liquor hours (reduce hours of opening e.g.) • require direct or indirect input from communities in annual reviewing of liquor licenses • set up liquor agreements in problematic areas (involving local authorities, police, liquor outlets) to proactively deal with complaints & address problems which do arise

18. “Place” strategies • Make it difficult for underage youth to purchase alcohol • train servers of liquor not to sell to underage youth • conduct sting operations to root out “bad” outlets and mobile services that sell alcohol to youth • Better policing • Increasing law-enforcement around liquor issues • Better training for police re liquor issues • Get police to be more proactive in working with 8-10 liquor outlets each (more routine inspections) • Set up information system whereby police collect/collate information on place of last drink when motor vehicle/pedestrian injuries or violence/public disturbance AND ALCOHOL INVOLVED • Deal strongly with “bad” outlets • Reduce outlet concentration – strong research base here

19. PROMOTION: adolescent brain research • Brain imaging research has found that teens with alcohol use disorders show greater activity in areas of the brain previously linked to reward, desire, positive affect and episodic recall in response to alcoholic beverage advertisements. • The highest degree of brain response was in youths who consume more drinks per month and report greater desires to drink. (Tapert et al., 2003)

20. Alcohol marketing as a risk factor • Recently published longitudinal studies have all found that the more youth are exposed to alcohol advertising and marketing the more they are likely to initiate drinking, even after controlling for other variables. • Forms of alcohol advertising and marketing that predict drinking onset among youth: • Television beer advertisements (Collins et al. 2007, Snyder et al. 2006, Stacy et al. 2004) • Alcohol ads in magazines (Collins et al. 2007, Snyder et al. 2006) • Alcohol ads on billboards (Snyder et al. 2006, Pasch et al. 2007) • In-store beer displays (Collins et al. 2007) • Beer concessions at sporting events (Collins et al. 2007) • Per capita spending on alcohol advertising in their media market (Snyder et al. 2006) • Alcohol use in movies (Sargent et al. 2006) • Ownership of alcohol promotional items (McClure et al. 2006, Henriksen et al. 2008, McClure et al. 2009)

21. Effects of Alcohol Advertisingon Drinking Beliefs and Behaviors(5th – 11th Graders) Exposure PositiveExpectancies .28 Intend toDrink Beer Adult .18 Music .25 -.07 (R2=.41) .46 .21 .13 People Overall Liking .16 NegativeExpectancies .23 .49 Story Intend toDrink BeerNext Year .26 .22 .13 -.33 Humor .05 .22 .33 .37 .61 .24 -.15 (R2=.60) PeerDrinking Attention .75 CurrentDrinking Scaled 2 (795) = 899.36, p < .01NFI = .85, Robust CFI = .96 RMSEA = .036 PeerApproval .15 (R2=.73) Source: Grube et al., 2005

22. Alcohol advertising: character, music, story

23. Self-regulation in the U.S. alcohol industry • Alcohol industry self-regulation is the principal means for regulating alcohol advertising in the U.S. • Beer and distilled spirits companies are most active marketers at this time. • Measured media expenditures 2006: • Total alcohol spending: $2.0 billion • Beer and ale alone: $1.28 billion • Distilled spirits alone: $492 million • Examine codes from two industry associations: • Beer Institute • Distilled Spirits Council of the United States (DISCUS)

24. Alcohol industry self-regulation 2002 • Beer Institute code: • No beer identification, including logos, trademarks, or names should be used on clothing, toys, games or game equipment, or other materials intended for use primarily by persons below the legal purchase age 2007

25. Alcohol industry self-regulation • Beer Institute code: • Beer advertising and marketing materials should not…claim or represent that individuals cannot obtain social, professional, educational, athletic, or financial success or status without beer consumption.

26. Alcohol industry self-regulation 2002 • DISCUS code: • Beverage alcohol advertising and marketing materials should not contain any lewd or indecent images or language. 2007

27. Earlier efforts on alcohol advertising in the U.S. • 1980s – SMART campaign • Stop Marketing Alcohol on Radio and Television • Two million signatures delivered to Congress • No action taken • 1990s – SAFE bill • “Sensible Advertising and Family Education” Act • Mandated warnings on alcohol advertisements – print and broadcast • Bill never even brought up for a vote in Congress • 2000s – effort to get a national media campaign • $140 million in illegal drugs media campaign • $850,000 for alcohol campaign

28. Center on Alcohol Marketing & Youth Founded in 2002, our philosophy is that reducing underage drinking requires a two-pronged public health approach: • Reduce young people’s access to alcohol. • Reduce the appeal of alcohol to young people, by: • Providing public health messages about alcohol and underage drinking • Limiting impact of alcohol advertising on youth by reducing youth exposure to it

29. What CAMY does • Industry monitoring using the industry’s own data • Answers the question: how much alcohol advertising do kids see? • Tracks alcohol advertising on TV and radio and in magazines • Uses standard industry sources – Neilsen, Arbitron, etc. – to measure the audiences for that advertising. • Shows that over and over again, kids are exposed to more alcohol advertising per person than adults.

30. Alcohol Advertising Database occurrence data ad placement details brand and occurrence level brands category + parent info audience data youth + adult GRPs, impressions alcohol category database who was exposed to what advertising media tools brand comparisons audience delivery category overview media comparisons local market detail youth vs. adult exposure

31. Youth exposure to alcohol advertising: magazines In 2006, compared to adults 21 and over, youth ages 12-20 saw per capita… • 20% more beer ads • 34% more ads for alcopops • 50% fewer wine ads The overwhelming majority of youth exposure – 77% - came from ads placed in magazines with disproportionate youth audiences. (2005 data in MMWR, 8/3/2007)

32. Magazines 2002: Archives article • Girls much more overexposed than boys • Girls saw 68% more beer advertising, 95% more alcopops advertising per capita than women • Girls saw more alcopops and beer advertising per capita than young adult women (21-34) • Boys saw more than adult men but not more than young adult men, rates of overexposure lower (Arch Pediatr Adolesc Med 2004)

33. Youth Exposure to Alcohol Ads on Television • In 2007, 340,337 alcohol product commercials appeared on U.S. television. • Underage youth ages 12-20 were more likely than legal-age adults on a per capita basis to have seen 68,700 of them, or about 20%. • These ads accounted for more than 40% of youth exposure to alcohol advertising on television. • From 2001 to 2007 – the number of television alcohol ads seen by the average 12 to 20 year-old increased by 38%. • Much of this increase was in distilled spirits ads, especially on cable TV.

34. CAMY Radio Database II • Analysis of census of all alcohol advertising in 28 of the largest U.S. markets in 2006: • More than a third were on programs young people were more likely to listen to than adults. • These ads accounted for more than half (58%) of youth exposure to alcohol advertising on the radio.

35. Alcohol Web Sites • Fifty-five alcohol Web sites tracked by comScore Media Metrix during the last six months of 2003 had almost 700,000 in-depth visits from underage youth. • Almost 60% of bacardi.com’s and almost half of skyy.com’s in-depth visits were from underage youth.

36. Alcohol industry “responsibility advertising” • “…no one can match the alcohol industry’s long-term commitment to public-service advertising that discourages underage drinking…” • Jeff Perlman, American Advertising Federation Captain Morgan “party”

37. Alcohol industry “responsibility advertising” • A “mixed message.” • From 2001 to 2007, youth 12-20 were 22 times more likely to see a product ad for alcohol on television than an alcohol industry “responsibility” ad.

38. Does the industry “target” youth? • Siegel et al. 2008, using CAMY data: • Census of alcohol advertisements in 20 national magazines, 2001 to 2003 • Number of alcohol advertisements in magazines increases significantly with the proportion of youth readers, even after controlling for young adult readership. • Published in Contemporary Economic Policy, July 2008

39. Does the industry “target” youth? • Siegel et al., using CAMY data: • Larger analysis of advertisements in 118 national magazines, 2002 to 2006 • Compared advertising schedules for beverages most popular with youth to those least popular with youth • Controlled for cost of advertising, size of young adult readership, median income of readers, etc. • In magazines with highest youth readerships, youth alcoholic beverage types were more than four times more likely to advertise than adult alcoholic beverage types. • Forthcoming, Journal of Adolescent Health

40. Does the industry “target” youth? • Chung et al., using CAMY data: • Census of 608,591 advertisements on cable television, 2001 to 2006 • Each one-point increase in the percentage of the audience that was adolescent was associated with more beer (+7%), spirits (+15%), and alcopop (+22%) ads per viewer-hour, but fewer wine (-8%) ads (P<.001 for all). • Forthcoming, American Journal of Public Health

41. Bottom line • Whether intentional or not, current beer and distilled spirits industry practices pervasively over-expose youth to alcohol advertising • This overexposure is responsible for a substantial proportion of youth exposure to alcohol advertising: • 77% of magazine exposure • 58% of radio exposure • More than a third of TV exposure • Presentation only covers measured media – one small subset of marketing. Other key areas: product placement, sponsorships, Spring Break, campus marketing, sports marketing, point of purchase, etc.

42. Product Placement • Many examples: • Kahlua in Catwoman • Coors in Scary Movie 3 • Carlsberg in Spiderman • Heineken ($10 million) in Matrix Reloaded Anheuser-Busch: Wedding Crashers, Batman Begins, Seabiscuit, Spider Man, Oceans Eleven, Terminator 3, Dodgeball, Collateral, Good Will Hunting, As Good As It Gets, Jerry Maguire, Children of a Lesser God, Mission Impossible, Ace Ventura: Pet Detective, Forrest Gump, The Silence of the Lambs, Platoon, Dirty Dancing, Working Girl, Top Gun, Rain Man, Erin Brockovich and Close Encounters of the Third Kind.

43. Hip-hop and alcohol • ‘“Smart marketers” know that hip-hop influenced campaigns sell products – especially among hard-to-reach 12-to-35-year-olds.” (Adweek, 3/14/2005) • From 1979-1997, hip-hop songs with references to alcohol increased five-fold (from eight to 44 percent). (Herd D, Addiction, 2005) • “…rap music has been profoundly affected by commercial forces and the marketing of alcoholic beverages.” (Herd D, Addiction, 2005)

44. Viral Marketing on the Internet • Smirnoff Ice “Tea Partay” • Never broadcast • More than 5 million hits on Youtube to date • Sequel has more than 3 million hits

45. RESPONSES TO PROMOTION

46. School-based approaches • General literature suggests that school-based approaches are at best insufficient. • Some evidence that media resistance skills, combined with drug resistance skills, can make difference at the individual level. • Environment needs to reflect messages given in schools.

47. Promotion policy interventions • Placement restrictions • Outright ban easiest to implement and most effective, but not always possible • % of audience (proportional to youth?) • Time watersheds (e.g. nothing before 10 p.m.) • Physical placement restrictions, i.e. outdoor advertising near schools, libraries, playgrounds • Restrictions on public transit advertising

48. Potential Impact of 15% • CAMY estimates that if alcohol companies had moved all their advertising to programming with youth audiences less than 15% in the first ten months of 2004 • Youth exposure to alcohol advertising would have fallen by 20% • Alcohol industry spending on television advertising would have fallen by 8% • There would have been virtually no effect on the industry’s ability to reach either 21 to 34 year-olds or 21 to 24 year-olds.

49. Promotion policy interventions • Warning on advertisements • Some evidence they may be effective • Ban alcohol industry sponsorship of events • Especially those appealing to children or families • Prohibit distribution or sale of alcohol promotional items • “Trinkets and trash” strong predictors of alcohol use • Prohibition could be limited to minors but much less effective • Litigation to prevent industry marketing abuses

50. Promotion policy interventions • “Equal time” for public health counter-advertising • Effective on tobacco in U.S., provided ads are hard-hitting • Funded in the U.S. at the state level through tobacco tax increases