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,

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)

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

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

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

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)

Alcopops most popular with females in every age group

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

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

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

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.

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

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

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

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

“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

“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

“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

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)

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)

Effects of Alcohol Advertising on Drinking Beliefs and Behaviors (5th – 11th Graders) Exposure Positive Expectancies .28 Intend to Drink Beer Adult .18 Music .25 -.07 .13 .46 .21 (R2=.41) People .16 Overall Liking Negative Expectancies .23 Story .49 Intend to Drink Beer Next Year .22 .26 -.33 .13 Humor .05 Our most complete test of advertising effects was conducted with 253 5th-11th graders. The methods were similar to these in the previous study with some additional variables in the model. There are four things to note. First, overall liking of the advertisements was predicted from music, people (characters), the story line, and humor. Humor and story seem particularly important. Second, overall liking of the ads predicted positive expectancies about drinking, perceived drinking by peers, and perceived approval by peers. Those young people who liked the ads believed the positive consequences of drinking were more likely, that their peers drink more frequently, and their peers approve more of drinking. Third, the reciprocal effects of these factors on liking were not significant. Fourth, liking of the ads had significant direct effect increasing intentions to drink as an adult. Fifth, liking of advertisements also increased current drinking and intentions to drink in the next year indirectly through its effect on expectancies, perceived peer drinking, and perceived peer approval. .22 .37 .33 .24 .61 -.15 (R2=.60) Peer Drinking Attention .75 Current Drinking Scaled 2 (795) = 899.36, p < .01 NFI = .85, Robust CFI = .96 RMSEA = .036 Peer Approval .15 (R2=.73) Source: Grube et al., 2005

Alcohol advertising: character, music, story

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)

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

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.

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

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

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

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.

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

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)

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)

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.

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.

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.

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”

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.

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

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

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

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.

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.

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)

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

RESPONSES TO PROMOTION

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.

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

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.

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

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

Alcohol advertising reform: state and local First amendment limitations do not apply when the state is the “speaker” Local and state authorities can reduce youth exposure to alcohol advertising on public property: Public transit and stations Sports, concert and other arts facilities Public post-secondary schools Parks and recreational centers Public publications (maps and tourist materials, magazines, etc.)

Attorneys-General AGs role in tobacco key Bringing attention to the issue Playing a role in negotiations with alcohol companies Movement towards less then 30% threshold Beam Global, Sazerac principles Other measures to reduce exposure including: Selective binding to reach 21+ audiences Removal of ads from issues going to schools/libraries Removal of several alcoholic energy drink brands from the marketplace, although others remain

Evidence Base for Effects of Reducing Youth Exposure to Alcohol Advertising An econometric study published in Health Economics in 2006 predicted that 28% decrease in alcohol advertising would lead to a 4% to 16% drop in monthly youth drinking, and an 8 to 33% drop in youth binge drinking. (Saffer and Dave 2006) A demography-based test of likely effects of several alcohol policies on youth drinking behavior in the U.S. concluded that a complete ban on alcohol advertising would be the most effective for reducing premature mortality. Complete ban: 7,609 fewer deaths from harmful drinking and a 16.4% drop in alcohol-related life-years lost. Partial ban: 4% drop in alcohol-related life years lost. (Journal of Studies on Alcohol 2006) An analysis of the impact of evidence-based interventions on disability-adjusted life-years (DALYs) in 12 regions of the world found that in regions where heavy drinking is less prevalent, targeted strategies such as brief physician advice, roadside breath testing, and advertising bans would be most effective. (Journal of Studies on Alcohol 2004)

“Social aspects organizations” Another form of promotion – in this case, of corporate image Influence alcohol policies at national and international levels Become members of relevant non-alcohol specific organizations and committees (“innocence by association”) Recruit scientists, host conferences and promote high-profile publications reflecting industry point of view Create other SAOs in emerging markets and low-income countries Prepare and promote “consensus” statements and codes of practice

SAO Perspective Patterns of drinking are the best basis for alcohol policies Responsible drinking can be learned Public/private partnerships will increasingly influence alcohol policy development Beverage alcohol industry will strengthen its self-regulatory mechanisms Alcohol – despite its potential for abuse – confers a net benefit on society.

Two dominant frames Market Justice Social Justice Self-determination and self-discipline Rugged individualism and self-interest Benefits based solely on personal effort Limited obligation to collective good Limited government intervention Voluntary and moral nature of behavior Social Justice Shared responsibility Interconnection and cooperation Basic benefits should be assured Strong obligation to the collective good Government involvement is necessary Community well-being supersedes individual well-being

Industry framings What’s needed is more personal responsibility, not government regulation. As a precursor to taking personal initiative, education can solve the problem. If the issue involves children or youth, it is the parent’s responsibility.

Public health framings Alcohol: “Too many liquor stores detract from the quality of life. It is not fair that certain families are subjected to such degraded conditions. Every family should have the opportunity to raise their children in a healthy environment. The city should make a rule to limit the number of liquor stores allowed within a certain radius. Tobacco: “While we have achieved great progress in reducing smoking, there are still large populations, primarily in low income communities of color, that are regularly exposed to toxic secondhand smoke. It is not fair that some of our cities’ workers are protected and others are not. We should enact uniform clean indoor ordinances to protect workers in all workplaces, including restaurants and bars.” This is a battle over what kinds of communities and what kind of world we want to live in…

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