Number 88 September 29, 2000

This Week:

Quotes of the Week
Children = Markets
Journalism? Or Advertising?
The Pharmaceutical "Marketing Machine"


In order to understand the modern world of business, perhaps the best place to start is to look at the advertising industry. Advertising increasingly shapes not only our perception of the products it advertises, but also shapes our perception of the world itself. So this week I present a trilogy of reflections on advertising, drawn from articles that have appeared in my three favorite newspapers within the past three months.

Alert reader Aaron this week gives me the opportunity to apologize yet again for a careless error, this time an inoffensive one. When I said in my editor's note last week that the Notes would be "A little shorter, a little lighter, a little je ne c'est pas," of course I meant "je ne sais quoi." My face is red, and I thank Aaron for pointing out the error. I thought my high-school French might finally come in handy, but instead I've learned an important lesson: Stick to English.

In response to popular demand, next week I plan to give some ideas and resources for people to use in relating to the current election campaigns. At best, you might use it to do some actual work in favor of the candidate or cause that moves you. At least, it should make you more interesting to talk to at parties over the coming month.

‘Til next week,


"Quotes" of the Week:

Two quotes from the September 22nd rally in support of the Green Party presidential bid of Ralph Nader and Winona LaDuke, attended by 12,000 Minnesota supporters:

"Quote" #1, from vice-presidential candidate Winona LaDuke: "We will not write public policy for the rich, because they're fine. We'll write public policy for the poor, because they're the ones who need public policy."

"Quote" #2, from presidential candidate Ralph Nader: "This campaign is not about leaders producing more followers. This campaign is about producing more leaders."

Bonus Ralph "quote," included because of amusement value: "George W. Bush is really a major corporation running for office, disguised as a human being."

Children = Markets

"Snack Foods Become Stars of Books for Children." That was the headline of a fascinating article on the front page of the September 22nd New York Times ("All The News That's Fit To Print!"). This well-written article by David Kirkpatrick reported on the growing phenomenon of producing books for toddlers that are built around products being marketed to children. Many readers are familiar with the plastic-coated kids' books that contain simple counting exercises, or introduce letters along with their sounds, designed to help toddlers begin to understand symbolic written language. The brand name versions use well-known cereals and snack foods as the theme.

The first book in the genre was "The M & M Brand Counting Book," which asked children to insert pieces of the candy in cut-out holes in the pages, after which they would get to eat them. The M & M Book was a runaway best-seller, so it will surprise no one to discover that we now have similar books based on Cheerios, Froot Loops, Pepperidge Farm Goldfish, Skittles, Hershey's Kisses, Oreos, and Necco Sweethearts.

The publisher of the children's book division at Random House says, "It's not just that these books resemble advertising; they are advertising. They are P.R. for the food manufacturer and as such are vaguely reprehensible. Now just watch me get a deal with one of them." That final comment was "added with a laugh," according to the Times, hopefully indicating embarrassment. The fact that this woman has risen to a position of great power and responsibility by being willing to seek out opportunities to perform "reprehensible" acts (nothing "vague" about it, really) speaks volumes about modern corporate culture.

In the days before "children" became "markets" there used to be places where you might expect your kids to be free from commercial images. Like, for example, in your textbooks. These cultural boundaries are seen by the modern corporation as nothing more than challenges to be overcome, as was pointed out by Meghan Parkhurst, a spokeswoman for Kellogg's, in talking about the new kid's books: "It is a great way to get the Froot Loops brand equity into a different place, where normally you don't get exposure – taking it from the cereal aisle and into another area like learning." Kellogg's also provides Froot Loops book covers to schools. One might think that the corporations would pay a hefty fee for all of this free advertising to children, but actually the authors pay the corporations a fee – up to one-half of the author's royalties - for use of their trademark.

And why stop with toddlers? The corporations are now producing books for elementary-school kids, as well, with titles like "Reese's Pieces: Count by Fives," the "Hershey's Milk Chocolate Bar Fractions Book," and "Skittles Math Riddles." The "Oreo Cookie Counting Book" teaches children to count down from 10 little cookies to "one little Oreo...too tasty to resist."

The even-handed Times article does quote outraged parents and pediatricians who point out some problems. "Building positive associations [in little kids] with foods of little nutritional value that might damage children's teeth" is one obvious problem that's cited. For parents and pediatricians the building of such "positive associations" is a problem, but for the corporations this is exactly the point of the advertising, which is a great illustration of the difference between corporate interests and human interests. A less obvious problem is mentioned by pediatrician Miriam Bar-On, who points out that such advertising encourages parents to reward their children with treats, "which creates a psychologically fraught relationship with food."

The article explains the origins of such books in a chilling passage that reveals a crucial truth about corporate power and how it permeates U.S. culture. The first "brand-name-snack book" was developed by a nursery school teacher in Massachusetts, Barbara McGrath. Ms. McGrath "discovered in 1982 that her students' interest perked up at brand names they recognized from advertisements." Having worked with toddlers myself, I have complete sympathy for a hard-working teacher trying to hold the attention of pre-schoolers. What is chilling about this passage is the fact that, in the year 2000, the easiest way to get kids to "perk up in recognition" is to dangle corporate advertising images in front of them. That is real power, and will be the subject of a future Nygaard Notes.


Journalism? Or Advertising?

My curiosity was piqued when I saw an article in the Variety section of the August 3rd Star Tribune (Newspaper of the Twin Cities!) with the headline, "Youths Embrace Patriotism In Their Attitudes, Dress, Music." This sure doesn't sound like the "youth" I know, but this was a reprint of a New York Times "Special Feature," so I figured maybe it was one of those East Coast things that we provincial Midwesterners just can't understand. Anyhow, I read it, and it was just chock-full of useful information about the younger generation. "Reporter" Jane Rinzler Buckingham (I'll explain the quotation marks below) informs us, for example, that "The new patriots include both Generation Xers and Generation Whyers. They want to embrace things that are made in America. They want the country to do well. There's nothing about the country that they feel they need to object to." They obviously don't read Nygaard Notes.

The article acknowledges that "many young people don't have a good sense of international politics, but they see America as a strong and prosperous country – and a country that roots for the underdog. As Americans, they want to make sure that people everywhere are protected and taken care of. They see it as our responsibility to protect the oppressed. They inherently trust that we're doing the right thing." Imperialism never sounded so good!

When I had read to this point, I began to wonder why this article was in the paper at all. I suppose it could be worth reporting that ignorant people will believe all sorts of crazy things, just in case somebody doesn't know that, but somehow this didn't seem to be the main point of this article.

"There was a period when it wasn't so cool to be pro-America," Buckingham points out, but "now, American designers such as Michael Kors, Miguel Androver and Katayone Adeli are seen as style setters, and American music – from Eminem, No Doubt, Macy Gray and others – is regarded as innovative." Why do we care how "American designers" are "seen?" By this time I was REALLY curious about why this was in the paper.

"Part of this wave of patriotism is about a return to simpler values," we read. [and I am NOT making this up!] "Gen Xers and Whyers want to recapture a time when America looked good to the rest of the world, and no one had to worry." No one had to worry?!?

Not until the end of the article does one learn that this "reporter" is not a reporter at all, which perhaps explains at least the horrid writing, if not the reliance on impossible-to-substantiate generalities and nonsense. Jane Rinzler Buckingham "is president of Youth Intelligence, a market-research firm specializing in the 7-to-35-year-old market."

And you thought advertising and journalism were two different things? Welcome to the 21st century.


The Pharmaceutical "Marketing Machine"

Neither of the "major" party candidates can bring themselves to propose a system of universal national health care, so the "health care" debate in this campaign season has come to consist almost entirely of arguing about the best way to allow our elderly citizens to get the prescription drugs they need. It's not unimportant. Increasing numbers of Americans are upset that the large private pharmaceutical companies ("LPPC's") continue to price their products out of the reach of many Americans (not to mention sick people in other countries; see "The News, Inc." in last week's Nygaard Notes).

This past July 6th the Wall Street Journal ran a front-page article headlined, "Drug Firms, Stymied in the Lab, Become Marketing Machines; The Strategy Could Prove Politically Dicey in Era of Expensive Medicine; Following the Hollywood Model." This single article does more to explain the problem with drug prices, and indirectly the problem with our health care system, than all the candidate debates ever will. I therefore will quote it at length.

There was a time when the LPPC's (which weren't quite so "L") made money primarily by investing in research and development. In those days, profits came from creating drugs that were clearly helpful in addressing health problems. If the drug was truly useful, doctors would prescribe it, consumers would pay for it, and there you had your profits. Those days are gone. Despite huge research budgets in the pharmaceutical industry, far fewer new drugs are coming to market these days, largely because many of the hoped-for new drugs have hard-to-predict toxic interactions with the thousands of already-existing drugs being taken by Americans. The result is that the LPPC's are only creating a fraction of the new drugs that they would need to sell to maintain their double-digit profit growth, which "has become the norm in the industry, which is among the most profitable" in the country.

"Simply accepting lower profits isn't an option for pharmaceutical executives, since doing so could bomb their share prices and make them vulnerable to takeover," the Journal points out matter-of-factly. Despite their failures in the lab, a spokesman for one of the largest of the LPPC's, Pfizer, says that they are "very optimistic about the future." How can this be? The answer is: Advertising. As the Journal puts it, the industry now "relies not only on launching new medicines but increasing the sales of old ones." And the best way to do that is "boosting marketing budgets." The idea is to advertise directly to sick people (which sometimes includes convincing us that we are in fact sick) so that we ask our doctor to be sure to give us prescriptions for the most profitable drugs around.

That's why you've been seeing so many TV ads for the allergy drug Claritin, for example. Claritin owner Schering-Plough Corp. spent $136 million advertising it in 1998 alone, more than Coca-Cola spent advertising Coke. "Claritin's success [$1.7 billion in sales] has been a revelation to industry executives: Buy ads, watch sales soar," according to the Journal. And soar they have. "The industry's marketing and administration expenses are generally more than twice those of research and development," the Journal informs us. And it works: Since 1993, when television advertising of prescription drugs became common in the U.S., sales of prescription drugs have doubled, to $101 billion in 1999. 11% of all health care spending in the U.S. now goes to purchase prescription drugs, up from 8% in 1993.

By proposing that we deal with unaffordable prescription drug prices by expanding publicly-financed programs (i.e. Medicare) to pay the high prices set by profit-hungry megacorporations, candidates Bush and Gore are essentially proposing that we use public tax money to pay the marketing and administration costs that are part and parcel of a health care system dominated by private corporations. Although the details of their proposals differ, both are textbook illustrations of the phenomenon known as "corporate welfare."