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Kids’ channels stare at 20% loss in ad revenues as CCPA restricts junk food advertising

Media agencies believe that the new CCPA guidelines will adversely impact the revenues of channels operating in the kids’ genre

The recent guidelines by the Central Consumer Protection Authority (CCPA) on misleading and surrogate ads may lead to almost one-fifth loss in revenue for TV channels catering to kids as the government aims to restrict advertising of junk food on television.

Mansi Datta

Mansi Datta, Chief Client Officer and Office Head – North and East, Wavemaker India, said, “Around 15-20% of the revenue comes from junk food ads including sugar confectionaries, chips, aerated drinks, etc on kids’ channels. It does mean 1/5th of the advertising revenue will get affected for these channels.”

Niti Kumar

Niti Kumar, COO, Starcom, said, “Quite a few brands in these categories have been using the kids’ genre. The genre effectively targets not only children but also the parents who are co-viewing and are the purchasers of many of these products. This ban will lead to some revenue erosion for these channels. However, there are other opportunities for broadcasters to make up this revenue - Edtech, for example, is a big-spending category and fits right into the kids' genre.”

Kids channels have always been cautious about the advertisements that they run on their channels, since it caters to a cohort that absorb, imitate and reflect easily. A spokesperson from Disney said, “We have always believed that our iconic characters, storytelling and platforms targeting kids have the potential and ability to bring about a positive change in the lives of our fans. We established and implemented our very own nutrition guidelines in October 2020 to drive our approach to food marketing; associating Disney brands and characters with a more nutritionally balanced range of foods.”

“Under these standards, all food and beverage products advertised, sponsored, or promoted on our kids’ network, including Disney Channel, Hungama TV, Disney Junior, Super Hungama and Disney International HD, oriented to families with younger children in India, are required to meet Disney’s nutrition guidelines. These guidelines, promote the consumption of fruit and vegetable and call for limiting calories and reducing the consumption of saturated fat, sodium, and sugar,” the spokesperson added.

Seconding the statement by Disney, Wavemaker’s Datta said, “What is to be noted is that the ban aims to reduce the exposure of children to high fat, salt and sugar products. Kids’ channels have the power to use their characters to promote healthy eating.”

The CCPA guidelines have not properly stated the category of brands and products that cannot be endorsed on channels largely meant for children. The statement says – “An advertisement for junk foods, including chips, carbonated beverages and such other snacks and drinks shall not be advertised during a program meant for children or on a channel meant exclusively for children.”

While many brands are taking a step towards healthy food, what is the conversation around the statement? Starcom’s Kumar said that many global and local brands they work with already had their internal policies in place discouraging direct targeting of ads to children, hence this is not a new conversation for them. Other countries have also had such regulations in place for a few years.

“The advertisers who were using the genre are having conversations around first understanding the extent of the government policy and its implications. We are also working on alternate plans and ways and means to reach out to the audiences using TV, and/or other mediums like digital or activation,” she added.

As a platform for these advertisers, are channels seeing any shift or withdrawal of such ads from the channel? The spokesperson from Disney said, “The sentiment across the industry has been extremely positive and we see more and more brands focused on introducing healthier alternatives and joining us in our endeavour to promote a healthy lifestyle. Over the last two years, we have had some great brands who were eager to associate with us as we embarked on this journey. We are confident that this endeavour will continue to gain momentum as we move forward.”

The directive by the government came after a controversial ad by perfume brand Layer’r Shot, which was slammed by people coming from all sections of the society. Following this, the government also looks set to take strict and prompt action against misleading and surrogate advertisements.

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