The latest target of Jamie Oliver’s epic anti-obesity campaign is junk food advertising. The celebrity chef wants the government to impose a pre-9pm ban on broadcast advertising for fast food restaurants and unhealthy snacks, as well as tightening restrictions on their promotion on the streets, public transport and online.
Celebrities are flocking to endorse the cause (although not, so far, Lineker, Walkers crisps’ brand ambassador of almost three decades standing). And Oliver, along with fellow TV cook Hugh Fearnley-Whittingstall, took his demands to the House of Commons last week.
The campaign has provoked some predictable “nanny state” objections from libertarians. Yet underlying Oliver’s campaign is the assumption that restricting advertising will actually work in curbing consumption of junk food.
Would it? It’s an old joke among company executives that they know half the money they spend on advertising is wasted, they just don’t know which half.
Some argue that more than half of advertising spending actually goes down the drain. This raises the awkward question: what if advertising that Oliver wants to ban actually has a negligible impact on behaviour? That would imply a junk food advertising ban wouldn’t do much good in curbing consumption – a prospect presumably as distressing for advertisers as it would be for Oliver.
Happily we have some evidence. Researchers from the Institute for Fiscal Studies (IFS) looked into the potato crisps advertising market last year. They managed to match up the TV viewing habits of a large sample of people, the adverts they were exposed to and their subsequent junk food spending decisions.
Their conclusion was that a ban on crisp advertising would actually work in reducing demand, cutting crisp sales by around 10 to 15 per cent.
One can presumably read across from this that a ban on all junk food TV advertising would be similarly effective in suppressing overall demand.
Yet that’s not the end of the matter. The IFS researchers stress that the question of whether bans enhance total social welfare hinges on what economic purpose the advertising is performing.
Is it there to persuade us to buy something, by changing our tastes and stimulating consumption desires which we otherwise wouldn’t have had? Fearnley-Whittingstall made it clear he thinks junk food advertising serves this particular function last week when complained that we are all being “manipulated to eat a much less healthy diet than we did 50 years ago”.
But might advertising not instead be informative, giving us useful information about a product to help us make our choices? Think of an advert for a bank which is launching a new higher-interest savings account.
Some have argued, in a related way, that much advertising is a signal of brand quality. The fact that the manufacturer has invested money to produce and broadcast an expensive advert sends a useful message to the consumer that they are unlikely to produce a substandard product and to then disappear when the complaints roll in.
Or is advertising complementary, perhaps not having a direct influence on our decisions, but making us feel good about our existing purchase preferences, and cementing brand loyalty? Think of those glossy adverts for luxury Swiss watches.
These are the three standard theories. So which might apply to UK junk food advertising, on which companies are estimated to spend around £ 140m a year? If it performs the persuasive function, a ban is likely to be effective. Ditto with the complementary function. But if the advertising is informative, perhaps not so much.
Even if we could say with confidence, there would remain tough philosophical questions about how to judge peoples’ “true” preferences and how to weigh the freedom of adults against the welfare of children, who might be watching TV alongside them.
Economic analysis can only take us so far on such issues. In the end, it’s a question of what sort of society we want to live in.