Questions and answers about coronavirus and the UK economy
Questions and answers about coronavirus and the UK economy

What is the likely impact of advertising restrictions on obesity?

Much of the food and drink advertised on TV and other media is bad for our health. Evidence suggests that such adverts lead people to make unhealthy choices – and that advertising restrictions would be likely to encourage more nutritious diets.

The bulk of adverts for food and drink on TV are for products that are high in saturated fat, sugar or salt (HFSS) and/or are highly processed. From crisps and sweets to fizzy soft drinks, these products are less healthy – and evidence suggests that advertising leads people to consume more of them.

In the UK, spending on junk food advertising drastically outweighs what the government spends to promote healthy eating. In 2017, for example, the top 18 UK brands spent over £143 million on adverts, which was nearly 30 times what the government spent on their flagship healthy eating campaign, Change 4 Life (£5.2 million annually).

Banning adverts for unhealthy foods would be likely to lead to a fall in purchases of them, although there are some possible complicating factors. For example, restricting advertising might cause companies to lower their prices to encourage people to buy more of their products. But it is unlikely that this would completely counteract the effects of a ban on advertising.

What foods are advertised and where?

Over half a billion pounds was spent on advertising foods on TV in the UK in 2018, representing around 10% of total spending on TV advertising (Nielsen, 2018). Viewers are far more likely to see adverts for unhealthy foods than more nutritious options. The single largest category is confectionery, but adverts for fast foods, soft drinks and prepared meals are also widespread. Figure 1 shows expenditure on TV adverts in 2015 for different types of food.

Figure 1: Expenditure on TV adverts in 2015, by food category.

Source: Authors' calculations using AC Nielsen data

Food and drinks are also advertised on other platforms, including online, as well as in some unexpected places, such as on the back of bus tickets. Overall spending on online advertising is increasing in importance relative to TV, making up over half of total UK advertising in 2019. In comparison, TV – which is second in terms of total advertising spending – represents 22% (Ofcom, 2019).

It is difficult to get precise estimates of the extent to which food and drinks are advertised online. The UK government estimated that 8% of all food advertising is digital and, similarly, 5% of all drink advertising (Department for Digital, Culture, Media and Sport, DDCMS, 2019). It also initially estimated that UK children saw 0.73 billion advertising impressions online for unhealthy foods annually, compared with 3.6 billion on TV. But these estimates have recently been scaled up to 15.1 billion annually online, largely due to improvements in the methods for measurement (DDCMS and Department of Health and Social Care, DHSC, 2020).

Other sources put a much larger figure for online advertising of food, even up to ten times more than the government's initial estimates (Tatlow-Golder and Parker, 2020). Similarly, in a 2018 survey conducted by Cancer Research UK, a larger share of respondents recalled seeing adverts for unhealthy foods every day on social media than on TV. And anecdotal evidence suggests that at least some food companies are shifting their advertising online –for example, Kellogg’s says that it spends 60-70% of its overall marketing budget on digital platforms.

Who sees adverts for unhealthy foods?

Estimates indicate that poorer households – those in the lowest income quartile – have a 20% higher exposure to TV adverts for unhealthy foods than households in the highest income quartile. This is in part because they watch more TV: it is also because they watch at the times of day and the TV shows on which adverts for unhealthy foods are more likely to be shown (Griffith et al, 2018).

In 2007, the UK introduced a ban on advertising for unhealthy foods directed at children, for example, during children's TV programming. Despite this, around half of the TV adverts for food and drink seen by children in 2015 were for unhealthy foods (Griffith et al, 2018). This was because they were shown during general programming times, so were allowed because they were not specifically directed at children.

Children also see adverts in other places – for example, McDonald’s advertises on the back of bus tickets. Complaints to the Advertising Standards Authority (ASA) claiming that this infringes the bans were not upheld because it was deemed that they were not directed at children (ASA, 2018). Although food and drinks advertising ranked fourth in number of adverts on the Transport for London (TfL) network in 2017-18, advertising of unhealthy foods has been banned on the public transport system since February 2019 (TfL, 2018).

Online advertising has grown significantly in recent years, but detailed data on who views adverts online are not currently available. With increased targeting, and the lack of transparency and good measurement , it is difficult to assess how much online advertising of unhealthy foods there is and who is seeing it.

But in general, children and younger people are more exposed to advertising through online media, as they are more likely to be internet users and to have social media accounts. For example, a higher percentage of young internet users report using a social media account than older internet users: 87% of 12-15 year olds and 88% of 16-24 year olds compared with 73% of 55-64 year olds and 59% of those over 65 (Ofcom, Media Use and Attitudes Report 2020-21).

Crucially, children and younger adults were also less likely to be able to identify an advert when they saw one. This may be exacerbated by the nature of advertising on social media as it seamlessly enters the media feed of users or is integrated within influencers’ posts about other content (for example, an opinion piece written by a marketing company – Warc, 2018).

What impact does advertising have on people?

Research in economics and marketing focuses on how advertising affects what people choose to buy, making two key distinctions in its impacts (Bagwell, 2007):

  • The first distinction is whether advertising is informative, persuasive or complementary. Informative advertising gives people information that helps them to make better choices – perhaps about prices or the existence or specific characteristics of a product, for example, if a product is ‘low-fat’ or if there is a new flavour.
  • Persuasive advertising changes people's views about a product, either leading them to pay less attention to negative characteristics such as its high price or the fact that it is unhealthy – or it may change their views about how much they like a particular product characteristic.
  • Complementary advertising generates something that consumers value in itself and that enhances the pleasure – for example, social prestige attributed to purchasing the advertised product.

The second important distinction is how advertising affects individuals’ or households’ purchases – in economists’ terms, whether the advertising is ‘rivalrous’ or ‘expansionary’:

  • Purely rivalrous advertising leads consumers to switch between rival brands – for example, advertising Pepsi would lead consumers to switch away from Coca Cola, but not increase the total amount of soft drinks they purchased.
  • In contrast, if the advertising were expansionary, Pepsi advertising would lead to an increase in purchases of soft drinks overall.

Various studies in economics have illustrated how the influence of these different types of adverts depends on the market in question. In particular, bans on advertising are more likely to lead to a reduction in purchasing if the advertising is expansionary – that it increases purchases overall. Several studies find evidence of expansionary advertising – for example, Dubois et al (2018), who study the UK market for crisps; Lui et al (2015), who study the market for yoghurt; and Sahni (2016), a study of restaurant choice) .

From a behavioural economics lens, advertising can be uninformative yet exploit the fact that many consumers do not necessarily have complete information on a product's characteristics, or do not fully pay attention when making decisions – what is sometimes called ‘coarse’ thinking. In the context of food, people may not realise or consider whether what they are buying is good for their health.

One study argues that some people group products into categories in order to reduce ‘cognitive overload’ (Mullainathan et al, 2008). In essence, they have too many other things to worry about and so do not consider all the different choices in detail and therefore take decisions based on the whole category rather than the individual products. This means that advertisers can frame a product using a desirable category, or transfer desirable attributes from other products in the same category in the consumers’ mind. For example, in the context of food advertising, a kind of chewing gum can be viewed as healthy by ‘coarse’ thinking consumers if it is advertised as low-fat (Schofield and Mullainathan, 2008).

A different approach to analysing the impact of advertising on people's behaviour is taken by public health researchers, who focus on the impact of advertising on dietary intake. For example, studies look at whether children choose to consume a healthy or unhealthy snack – when both are available to them – after watching an advert for unhealthy foods. They show that children exposed to food advertising ate more and were more likely to be obese (Russell et al, 2018).

Viewing food and drink advertising contributes to increased calorie intake in children; and children exposed to TV adverts for less healthy foods consume more food in the immediate period after watching them (Boyland et al, 2016; Sadeghirad et al, 2016; Norman et al, 2018). Exposure to advertising for less healthy foods also influences food preferences and purchasing patterns (Cairns et al, 2013; Kelly et al, 2014).

What would be the impact of banning advertising?

If we consider the impact of getting rid of all adverts for a type of unhealthy food (but change nothing else), then estimates suggest that we would see a substantial reduction in purchases of unhealthy foods, as long as the advertising has some expansionary effect.

For example, advertising for crisps changes the weight that consumers place on their nutritional characteristics. It also lowers consumers’ willingness to pay for healthier products and leads them to purchase more crisps overall and less healthy brands. Consequently, a ban on advertising, without changing prices, would bring a reduction in the quantity of crisps sold of around 15% (Dubois et al, 2018).

But in order to understand the full impact of a possible ban, we need to consider whether everything else would stay the same. Or would manufacturers and retailers change their behaviours in other ways if they were not allowed to advertise unhealthy foods?

Advertising makes consumers less responsive to changes in price – in other words, they will often continue to buy advertised products even if prices increase. In economic terms, it makes demand less elastic. Conversely, banning it means that changes in prices will be more likely to affect people’s purchasing decisions.

As a result, firms would face incentives to lower their prices following any advertising ban. This is intuitive: banning competition in advertising intensifies competition in prices.

Going back to the crisps example: if consumers are buying fewer crisps because they are not seeing advertising, crisp companies may look to draw them in by offering lower prices.

One study estimates that in the UK market for crisps, prices would fall by 4% on average, and therefore, after consumers and firms have both responded, the effect of the advertising ban would be to lower demand for potato chips by around 10% – two-thirds of the reduction if prices were held constant (Dubois et al, 2018).

In many cases, consumers choose between products that would be directly affected by advertising restrictions and more healthy products that would not. This means that firms’ responses to advertising restrictions may extend to products beyond those directly affected by the ban. For example, one likely effect of a ban would be to lower the price of advertising. Since advertisers of unhealthy foods represent a considerable amount of total TV advertising, a ban would reduce the demand for TV advertising, which would be likely to reduce the price for all other advertisers, including those advertising healthy foods.

We can learn something about firms’ responses to advertising restrictions by looking at what happened after the introduction in 2007 of restrictions on advertising unhealthy foods on children's TV. In the wake of the ban, firms shifted the timing of their adverts. For example, Ofcom found that between 2005 and 2009, the total number of spots advertising HFSS foods on non-children’s TV rose by 124% – from 1.4 million to 3.2 million (Ofcom, 2010). This highlights that firms are likely to shift advertising away from where it is banned to other times and outlets.

Firms also adapted their advertising strategies in order to continue advertising directly to children. McDonald’s, for example, used adverts for carrots, which were permitted during children’s programming. Another option open to firms is to switch from advertising brands that are subject to the restrictions to products they also own that are similar but unaffected (for example, Coca Cola may choose to switch from advertising the regular drink to the diet version).

Figure 2: Coca Cola advert

Source: Ethical Marketing News

Kellogg’s pursued precisely this strategy, by introducing a new brand called Coco Rock Pops. This product had a very small market share, but accounted for a large fraction of the firm’s advertising. The brand is very similar to Coco Pops, which is subject to restrictions, yet is permitted to be advertised during children’s programming, because it contains more fibre, which does not taste good but puts it below the threshold of the advertising restrictions. Over 2015, Coco Rock Pops was the brand most seen by children through advertising among those that were not subject to advertising restrictions. This product was viewed 259 million times by children over 2015, representing 1.72% of all of the adverts that children viewed.

Figure 3a: Coco Pops packaging                           

Source: The Student Room 

Figure 3b: Advert for Coco Rock Pops

Source: YouTube

Of course, this type of reformulation might also lead to genuine improvements in nutrition if consumers shift to purchasing the new reformulated product.

Advertising can also be used by firms already in a market to make it more difficult or costly for others to enter that market. If the dominant firm already advertises a lot, it can be difficult for another to enter and gain market share without also advertising at the same level as the existing firm. This can create an insurmountable barrier to entry.

Restricting advertising could reduce these barriers, making it easier for new products to enter the market. A possibility is that restricting advertising of unhealthy products could favour the entry of healthy products that may otherwise have found it difficult to enter a market dominated by unhealthy products that are advertised a lot.

Overall, restricting advertising can have numerous effects. These depend on the nature of advertising – whether it is informative or persuasive, purely rivalrous or expansionary – as well as the responses of firms in their advertising, pricing and entry decisions.

Overall, it is difficult to say what would be the precise impact of banning advertising, as it will depend on the strength of these different effects. But the evidence points to a ban on advertising unhealthy foods leading to a reduction in consumption and thus in obesity.

Where can I find out more?

Who are the experts on this question?

Authors: Rossi Abi-Rafeh, Pierre Dubois, Rachel Griffith and Martin O'Connell
Photo by Karl Bewick on Unsplash
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