Teaching Kids About Money: How Corporations Turn Our Kids Into Consumers
Marketers invest more than $14 billion a year to turn little children into huge consumers. And it's working: your preschooler already knows the products he wants -- and how to nag you to buy them. Can parents avoid raising material girls and boys?
James Hansen, 5, can't read yet, but he has no problem identifying the logos of his favorite products. For a recent homework assignment, the kindergartner had to list all the words he knew by sight. As his mother, Barbara Brabec, of Studio City, California, held up food items and toy boxes, James began shouting out their names. In no time, they had filled a notebook page with brands he recognized, including Cheerios, Legos, Lunchables, and Skippy. At that moment Brabec realized just how much her son is influenced by marketers. "I was amazed by how many product names he knew," she says.
She shouldn't have been. Young children are bombarded by advertisements -- on TV, on buses and billboards, in stores, and even at school. In fact, according to James U. McNeal, Ph.D., author of The Kids Market: Myths and Realities, the average child recognizes more than 200 logos by the time he enters first grade.
While preschoolers were once seen as having a limited effect on their parents' purchases, they are now widely viewed as little people with big buying influence. Companies spend an estimated $14.4 billion annually to advertise and promote their products to your kids, according to the U.S. Small Business Administration. And it's working. A 1999 study revealed that children become brand-conscious as early as age 3, and half ask for specific brands by age 5.
"They're not just grocery-store pants-pullers anymore," says Anne Sutherland, author of Kidfluence: The Marketer's Guide to Understanding and Reaching Generation Y -- Kids, Tweens, and Teens. "Young children today play an important part in making family decisions on everything from cars to vacations."
Kids are highly attractive to marketers for several reasons. First and foremost, they've got their hands in your pockets. Whether you call it the nag factor or the power of pestering, children sway parents' decisions to the tune of $290 billion annually. "McDonald's was one of the first companies to recognize that most family dining-out decisions are influenced by children," says Christie Nordhielm, Ph.D., an assistant professor of marketing at the Kellogg School of Management at Northwestern University, in Evanston, Illinois. That realization led to the introduction of Ronald McDonald and, later, the wildly successful (and imitated) Happy Meals.
Nor is it just your money your kids are spending. Children ages 4 to 12 shell out an estimated $35.6 billion of their own cash annually, more than four times what they did a decade ago. They may not have huge allowances, but what they do have is highly disposable.
And since many companies feel the brands kids connect with now will be the ones they'll stick with in the future, they're not just selling kid stuff. For instance, General Motors, in part because boys form impressions of cars at an early age, now sponsors a Test Track ride (including a display of future vehicle designs) at Walt Disney World's Epcot Center. And Home Depot offers a toy tool set designed to imprint its brand on youngsters.
"Marketing is teaching young children to be active consumers," says Linda Gulyn, Ph.D., an associate professor of psychology at Marymount University, in Arlington, Virginia. And that lesson is coming before they're capable of making informed decisions. "Until about age 6, a child doesn't recognize that an ad is intended to persuade him to want something," Dr. Gulyn says. "Preschoolers are very trusting of adults and other authorities. They believe what they hear and see is real and true."
Television advertising is the most powerful way marketers reach kids. On average, a child spends four hours in front of the tube each day and views as many as 40,000 commercials per year.
Often, as Amy Kite, of Glencoe, Illinois, prepares dinner for her family of five, Benjamin, her 4-year-old son, will yell for her to come see an ad for a product he wants to buy. Lately, he's been fascinated by commercials for Hot Wheels cars and Lucky Charms cereal. (In the grocery store recently he asked, "Are these the ones with the new bigger marshmallows?")
Through focus groups and psychological research, companies are constantly studying how children think so they can maximize the impact of their messages. Using cartoon characters like Tony the Tiger and the Trix Rabbit has long been viewed as an effective selling and brand-building strategy. "Animated characters send a signal to children that this is their world, so they should listen," Sutherland says.
A more recent marketing twist: using characters from your kids' favorite programs -- Dora the Explorer, Blue's Clues -- to sell toothpaste, books, yogurt, macaroni and cheese, and more. Brands are also establishing product partnerships (think Kellogg's Disney Mickey's Magix cereal) that strengthen both brands.
The latest marketing escalation is McDonald's plan to introduce a licensed McKids line of clothing to be sold at Wal-Mart, as well as toys, educational videos, and books that both Target and Toys "R" Us will carry.
A growing number of companies are even marketing directly through schools. Toys "R" Us, Petco, and Sports Authority are among those participating in a cooperative called Field Trip Factory, which arranges to have kindergartners and grade-schoolers visit their stores. And then there is Channel One, which brings educational TV programming -- along with paid commercials -- to more than 8 million American students.
"There's almost no place where something isn't being sold to our children," says Diane Wood, executive director of the Center for a New American Dream, a Takoma Park, Maryland, advocacy group whose goal is to help Americans resist excessive consumerism.
And parents are concerned: A poll conducted by the center showed that almost 80 percent of respondents think marketing pressures kids to buy products that are unhealthy or too costly; seven out of ten say such advertising is bad for their kids' values; and almost two thirds of parents say that their children define their self-worth in terms of possessions and that the problem has worsened over time.
A Bad Rap?
While it's easy to see the downside of marketing to kids, critics tend to dismiss positive examples of the practice. A number of companies, for instance, use advertising money to support educational children's shows -- like Sesame Street and Clifford the Big Red Dog.
Strong brand association among preschoolers also has its pluses for parents. Amy Kite notes that Oral-B Stages Buzz Lightyear toothpaste and a Reach SpongeBob SquarePants toothbrush make her son, Benjamin, 4, excited to brush his teeth. And Dora the Explorer underpants and an Elmo potty seat made toilet-teaching her daughter, Emily, 2, a lot simpler. "It's as if I've got a whole team of characters on my side to get my kids to do things they might otherwise resist," she says.
Detractors argue that the way these characters are being used to sell products is exploitative. Advocacy groups are also up in arms about commercialized classrooms, saying children shouldn't have to sift through advertising messages to get to educational ones.
Gary Ruskin, executive director of Commercial Alert, a lobbying group cofounded by Ralph Nader, says commercials aimed at kids under 12 should be banned outright, as has been done in Norway and Sweden. That's just one provision of the Parents' Bill of Rights he's lobbying to Congress. Among the bill's other objectives: to prohibit marketers from tracking kids' purchases; to eliminate all forms of school advertising; and to require that companies reveal all money paid to have their products appear in films and on TV shows.
"We're trying to prevent this commercial culture from subverting the values of our kids," Ruskin says.
Commercial Alert has already helped pass a law requiring parents to be notified about all market research being done at their kids' schools, and it has pushed individual school districts to remove junk-food vending machines. But while public support for the Parents' Bill of Rights is on the rise, the proposed legislation has yet to be introduced by Congress.
In the meantime, parents have an unlikely ally in their fight against inappropriate ads: the Children's Advertising Review Unit (CARU), which is funded by the marketers themselves as a means of self-regulation. CARU makes sure advertisements targeted at children don't make misleading claims or misrepresent a food product's nutritional value. The organization recently challenged a Sunny Delight spot that showed the bottle breaking through a concrete block, arguing that young kids might believe that the drink conveys great strength. The company promptly agreed to alter the content of the commercial.
CARU director Elizabeth Lascoutx says the watchdog group boasts a compliance rate of 95 percent. "No industry segment wants to get labeled as harming children, and that's partially what drives participation in our system," she says.
The Message Starts at Home
Despite such symbolic victories, kid-directed marketing remains a lucrative, powerful, and fast-growing business. The primary burden of regulating its impact remains with busy parents, who must find the time to teach children the difference between want and need, explain the mainpulative role of commericals, and above all, stand up to their kids' constant demands for products.
Christina Kwik, a mother in San Diego, is doing her best to raise discerning consumers. She makes it a policy to stand firm about what to buy when she's in the supermarket, even if it means fending off tantrums from her children, Stephanie, 7, Monica, 5, and Kevin, 3. Kwik also tries to instill values by reading books such as The Berenstain Bears Get the Gimmies to her kids.
Moderating her children's wants, though, is an ongoing battle, as it is for every parent. It's a fundamental impulse to try to make your child happy whenever possible, and everyone caves from time to time.
"Sometimes when my 3-year-old son, Rob, says 'I want french fries at McDonald's,' I say okay, because I just don't have the energy to deal with it," says Lauren Monti, a mom from Chicopee, Massachusetts.
Giving in to commercial-driven desires on occasion is not such a bad thing, Dr. Gulyn concedes. However, she points out that making snap decisions out of convenience can make it a lot tougher to refuse a child's product requests in the future. "As a parent, it's critical to maintain your ability to say no to products that don't serve the best interests of yoru children."
Tips for Raising Kids in a Commercial Culture
The Center for a New American Dream offers these tips for raising a child in today's commercial culture.
- Consume responsibly. Remember that you're a role model for your child. Speaking wistfully about things you wish you had will reinforce the idea that material goods make for a better life.
- Educate him about ads. By age 6, your child should be able to understand the manipulative purpose of a commercial. Explain the difference between want and need, and ask what he thinks he'll gain by having a product he desires.
- Set limits. If you feel a product is dangerous or wasteful, explain why to your child.
- Cut back on television. The fewer commercials your child watches, the less impact they'll have.
- Talk to other parents. It's easier to resist a child's lobbying efforts when you know how other parents handle similar situations.
- Set an allowance. Encourage your child to stash money in a piggy bank. Your child will appreciate a toy more once she buys it.
- Focus on the nonmaterial. Make time for simple activities that stimulate the imagination, like playing outside, reading, and drawing.
- Take action. Contact companies whose ads you think are inappropriate.
Copyright © 2004 Margaret Magnarelli. Reprinted with permission of Parents magazine March 2004 issue.