CONTENTS

Index

Prologue

Summary

Commercial Pressures on Kids at School

Evaluations

How Great a Problem?

Recommendations

Guidelines for Evaluating SOCAP & IOCU Materials

Ratings Charts

Channel One vs. CNN

"The kids we're reaching are consumers in training."
      --Joseph Fenton of Donnelly Marketing 2

Business and education have a long and sometimes troubling relationship. Schools have had a chronic need of funding for programs and equipment. And local businesses have long played a role in supporting schools with contributions in cash, time, expertise, or even equipment. In exchange for such handouts businesses often get commercial plugs in school yearbooks, newspapers, and events programming or on school uniforms and playing fields. Such arrangements, though self-serving on the part of businesses, have been widely tolerated.

But today, corporate involvement in schools often goes beyond self-serving philanthropy to become commercial opportunism. Limited local boosterism is overshadowed by national marketing or advocacy efforts from major companies that often put corporate logos, brand names, and other messages before school kids. Oil and utility companies, food companies and health providers, banks and credit card companies are among those who look for ways to get their messages to kids while those kids are a "captive audience" in school.

If you are a parent yourself, or if you work in education, you may have witnessed first-hand the rising tide of commercial messages aimed at school children. Many school kids see promotional messages throughout the school day, even when in class.

FORMS OF IN-SCHOOL COMMERCIALISM

Businesses have found many ways of putting their messages before America's captive kids. These are the main forms of in-school commercialism:

In-School Ads

The most apparent form of commercialism in schools is advertising that is displayed in the school itself or on property closely related to the school. Such advertising has become ubiquitous. It's on school buses and scoreboards and on billboards and wallboards in corridors and lavatories. It's on telephone kiosks and book covers. It's on radio programs piped into school corridors and lunchrooms. In addition, hundreds of thousands of product coupons and samples are distributed through schools each year. The list goes on and on.

Ads in Classroom Materials and Programs

Commercialism also takes the form of advertisements in classroom magazines and television programs. Most controversial in this category is the daily classroom news program, Channel One. Each 12-minute news program contains 2 minutes of catchy commercials aimed at school kids.

Corporate-sponsored Educational Materials and Programs

Less obvious than outright ads and commercials are the promotional messages and plugs kids see in classroom teaching materials provided to schools by corporations or trade associations. Known as "Sponsored Educational Materials" (SEMs), these usually free or inexpensive materials may be multimedia teaching kits, videos, software, books, posters, reproducible activity sheets, workbooks, or other teaching aids.

Sponsored educational materials often are welcomed into the classroom because they help teachers augment their supply of teaching materials. Those that contain no commercial messages and offer complete, unbiased explorations of their subject matter can be worthwhile. But, unfortunately, these materials often contain outright plugs for a company or its product, or worse, biased information.

Corporate-sponsored Contests and Incentive Programs

Corporate-sponsored contests and incentive programs gain access to schools with the lure of prizes, from travel or cash to free pizzas. Whether or not they inspire students to excel, they carry brand-names and logos into classrooms.

WHY TARGET KIDS AT SCHOOL?

"School is... the ideal time to influence attitudes, build long-term loyalties, introduce new products, test market, promote sampling and trial usage and --above all-- to generate immediate sales." --Lifetime Learning System ad directed at clients

America's kids represent a large and growing market.

• More than 43 million children attend schools. And the school population is growing. There has been a significant growth in the numbers of children born annually over the last ten years, and as the chart shows, that number is expected to increase across all age and ethnic groups through the year 2005, assuring corporate America an expanding market of youngsters well into the 21st century.3
  
  
• Today's elementary-age children have tremendous spending power --around $15-billion per year, $11-billion of which they spend on a wide variety of products from food, beverages, and clothes to toys and games.4 In addition, they influence another $160-billion of spending controlled by their parents.5
  
  
• Today's teen-agers have even greater economic clout. They spend $57-billion of their own money yearly and $36-billion of their family's money.6
  
  
• America's school kids spend at least 20 percent of their time in school.7 For years, the main way for national marketers to reach kids was in the home --through comic books and television.8 Those avenues remain. But kids are away from home and in school seven to nine hours a day, five days a week, 180-plus days of the year, making alternate marketing channels more important than ever. To reach them, more and more companies see school-based marketing as "the most compelling, memorable and cost-effective way to build share of mind and market into the 21st century."9

These facts have inevitably caught the attention of marketers and have given rise to a marketing subspecialty eager to capitalize on children at school. And in the world of marketing, where establishing and maintaining brand loyalty is paramount, these "rookie consumers"11 represent short- and long-term commercial opportunity. Marketers are looking to build brand loyalty while children are young and impressionable. The prevailing belief is articulated by this 1993 Advertising Age ad from Modern Talking Picture Service, one of the agencies that would-be kid marketers turn to for help in getting their promotional messages to kids at school.

CONTRIBUTING FACTORS

The growing interest in school children as a commercial market comes at a time when educational budgets are strained. Financial pressure on schools may make them more dependent on corporate handouts and willing to open their doors to commercialism. A number of factors may be at play:

• Many schools want and need more instructional equipment, programs, and materials for a variety of reasons. Some have shortages. Some have outdated materials and equipment. Some are looking for more varied or real-world or high-interest materials to enhance their lessons and better capture the attention of kids who are used to the powerful images of television and other media.
  
  
• Many of the instructional materials schools want and need are expensive, and prices continue to rise. Textbook catalogs show prices like $36.93 for a history textbook, $10.95 for a set of language arts posters, and $99 for a computer software program for use in teaching algebra. A 28-minute environmental video costs $149.12
  
  
• Many schools can't afford the instructional materials they need and want. Despite the fact that school budgets have risen over the last decade, the gap between the cost of educational materials and the funds available for them is growing. Here are some figures:
  
  
  Total public school expenditures rose from 1983-84 to 1993-94 by 44.8% (adjusted for inflation). Current expenditures per pupil (excludes payments for capital outlay and other expenses) rose 26.1% (adjusted for inflation).13
  
  
  During 1992-93 the average school districts spent per pupil was $5,378 per student (see graph below).14
  
  
  Figures on how much per pupil schools average on instructional materials are not available, but typically districts spend only 2.7 per cent of their current budgets on books and materials.15 Based on a per pupil expenditure of $5,378, this amounts to $145 per pupil.
  
  
  The situation in some schools is more dire. New York City currently spends an average of $7,918 per student on public education. Of this amount, $4,418 (55.8 per cent), is spent on instruction. But only $44 (.56 per cent) of this goes to instructional materials. The rest goes for teachers' salaries and salaries of school principals, counselors, psychologists, and other personnel.16

  
  
  

• In many schools teachers have less money now for discretionary spending than they used to. Several teachers we contacted for this study said that schools have cut way back on what they give teachers for discretionary spending. Where 10 years ago, a teacher might be allowed $400 to $500 a year to buy extra "goodies" for the classroom --special posters, photo packets, and other supplementary materials, the teacher might now get a fraction of that, or none at all. In many schools teachers make up the difference by dipping into their own pocketbooks, applying for grants, holding fund raisers, or keeping a sharp eye out for "freebies."
  
  

Thomas Moore of U.S. News and World Report sized the situation up this way: "As the youth market has become increasingly rich over the past 20 years, schools have become relatively poor. Budgets have been squeezed between rising costs and taxpayer resistance to keeping pace. While teacher salaries generally have stayed ahead of inflation, school spending on materials and equipment has often been held down. Some districts have extended the shelf life of textbooks far beyond their time..."17

In addition, some of the materials schools need and want today aren't widely available from traditional publishing sources. Most educational publishers just aren't producing specialized and real-world career, health, and life skills materials. Corporations stand ready to fill this void --often with biased or promotional materials.

PROVIDERS OF IN-SCHOOL COMMERCIALISM

"Through these materials, your product or point of view becomes the focus of discussions in the classroom ... the centerpiece in a dynamic process that generates long-term awareness and lasting attitudinal change."
--Message to potential corporate clients from Lifetime Learning Systems

When we last studied in-school commercialism in the late 1980s, Whittle Communications had just begun testing its ad-bearing classroom news program, Channel One, sparking a national debate on the commercial exploitation of "captive kids" in the classroom. At that time, we identified some 234 of the possibly thousands of companies that were trying to get their commercial messages to schools via direct advertising or some kind of sponsorship. The number of companies marketing directly or indirectly in the schools includes Fortune 500 companies (Anheuser-Busch, Dow, DuPont, Exxon, Kellogg, Mobil, Phillips Petroleum, Polaroid, Procter & Gamble, Upjohn to name a few), smaller companies, trade associations, and corporate foundations and institutes.

Often these companies and commercial organizations have their own in-school marketing operations capable of producing materials and programs for schools. But just as often they turn to school-marketing specialists for help in reaching kids at school.

Helping Business Reach School Kids: A Business Itself

The rising interest in school-based marketing has spawned an entire industry of producers and distributors of in-school advertising and independent developers of sponsored educational materials --all ready to help business and industry get their messages to school kids.

Some of these marketing groups and developers have come into the business from the advertising agency world, offering expertise in advertising, direct mail, and media placement. Others are essentially publishers who offer businesses the option of sponsoring their publications or of having new, customized materials created to their specifications. Some are more commercial than others. Here are profiles of some players (listed in alphabetical order):

Channel One Communications (formerly named Whittle Communications Network). Sold in 1994 to K-III, the diverse media company that owns Weekly Reader Inc. and Lifetime Learning Systems, Channel One Communications offers companies an opportunity to show commercials to kids during its Channel One classroom news show. Schools are enticed to show Channel One by an equipment-for-audience offer. Branching out from its now defunct wall media (wallboards displayed in school hallways) operation, Whittle first introduced classroom television advertising in 1989. Channel One Communications also produces P.E. TV, a promotional single-sponsor television program for schools.

Channing L. Bette Company, Inc. This is a publishing company that identifies topics of potential interest to schools, businesses, community organizations, and other agencies. It then develops and publishes booklets, posters, and videos on these topics, marketing them to schools via a direct mail catalog. Materials in the catalog we examined covered health and safety, AIDS, the environment, human resources, current issues, and social studies/cultural diversity.

One of the catalog's suggestions to schools: get local businesses to underwrite the cost of the materials in exchange for having their corporate name, logo, and message imprinted on the materials. Phillips Petroleum Company is one company that does this: its logo is on the back cover of several environment booklets we looked at. (Because its materials had no teaching guides, we did not include any of Bette's materials in our evaluations.)

Cover Concepts Marketing Services, Inc. Public schools require schoolbooks to be covered. That creates a new medium for advertisers. They can place their message on one of Cover Concepts "free" book covers. The covers are presently distributed to 8,000 public schools. The company's stated objective is to put its "free" paper covers (carrying ads from a variety of corporations) on all textbooks in every U.S. elementary and high school.

Cover Concepts' promotional literature to potential advertisers emphasizes the public service messages it accepts, but most of the cover ads we saw were geared to branded products from Nike, Gitano, FootLocker, Starburst, Nestle, and Pepsi.

Cover Concepts' promotional brochure claims that "over 6,000,000 high school, junior high school and elementary school students in our network prefer the trendy Cover Concepts book covers over the traditional 'brown paper bag' look. Students in this age group are responsible for over $95 billion in consumer purchases annually ... Advertisers gain maximum exposure in the students' daily environment."

Cover Concepts also offers a "Grab Bag Sampling Program," which actually places sponsored products into the classroom.

Enterprise for Education. A publishing and fulfillment service for utilities and energy companies, Enterprise for Education produces and distributes two to three million sponsored booklets per year on energy and environmental topics.

Enterprise develops the materials and distributes them to schools, often through the underwriting of local corporations. Says the company's literature, "Our fulfillment service enables you [potential sponsors] to reach all the schools you want to reach in your service territory without the headaches. We do all the work! You and your staff are free to focus on other public affairs concerns." Among its clients are Central Power and Light Company, Exxon Company U.S.A., Lower Colorado River Authority, and Northeast Utilities.

The company insists that its corporate clients do not dictate editorial content and adds this disclaimer to its publications, "Enterprise for Education is solely responsible for the content of this publication which was developed without sponsor funding. Sponsors do not necessarily agree with all statements and views expressed. In particular, sponsors do not make any warranty, express or implied, or assume any responsibility for the accuracy or completeness of the information provided."

We reviewed only one of Enterprise's SEMs, The Greenhouse Effect and Global Warming, one of whose sponsors was Northeast Utilities. We found it not commercial, but with a bias to the fossil fuel industry.

Interactive Design & Development, Inc. Based in Blacksburg, Virginia, Interactive Design & Development, Inc. (IDD) "designs and develops computer-based, interactive, multimedia courseware and information systems." IDD was founded in 1991 by Mary Guy Miller, a former teacher, to develop multimedia learning modules for the classroom. IDD produced 5-A-Day Adventures for Dole Foods, which we found to be unbiased and not commercial. Other clients of IDD include University of North Carolina at Chapel Hill, USDA Extension Service, Thomas J. Lipton, Inc., and Lufthansa German Airlines.

Learning Enrichment, Inc. This not-for-profit company was founded in 1983 by Bruce Barton and Clayton Westland, formerly of Scholastic Inc. The company produces and distributes sponsored teaching materials, including posters, discussion guides, videotapes, and computer programs. The materials are "underwritten by corporations, foundations, and governments" and are distributed free to schools.

Learning Enrichment produced two of the sponsored materials we evaluated in this report including one from Mobil Corporation and one from Procter & Gamble, both of which we found flawed.

Lifetime Learning Systems. Lifetime Learning Systems bills itself as "the nation's recognized leader in the creation and dissemination of corporate-sponsored educational materials." Its promotional materials boast of 1,000 educational programs created since 1978 and used by more than 63 million students every year. Lifetime Learning was purchased in 1994 by K-III Communications, which also owns Weekly Reader and Channel One Communications.

The promotional intent of the company's service is quite evident in its own literature: "Lifetime Learning Systems can deliver your message precisely to the audience that fits your marketing needs. With our mailing lists, you can target any age group, ethnic group, geographical area or income bracket."

Lifetime Learning Systems produced six of the SEMs we evaluated for this report, five of which we rated either commercial or highly commercial.

The Mazer Corporation. In business for 20 years, Mazer's entire focus is the creation of sponsored educational materials. Its stated goal is "to develop and distribute educational materials that serve the communications, philanthropic, or marketing goals" of sponsors that "have a passion for assisting in the education of America's children." Mazer claims that it distributes materials that "... do not promote commercialized or advocacy messages" and is unwilling to work with corporations whose goals are just to promote their products. However, we found the one Mazer-produced SEM that we evaluated, Colonial Iron Kids Path to Health & Safety, highly commercial.

Media Management Services (MMS). Founded in 1977, MMS calls itself a "full-service consulting, marketing and publishing company specializing only in the education market." According to its own promotional literature, MMS specializes in marketing supplemental materials for the science, social studies, and language arts curriculum. Formats include print, film, software, videos, laser discs, on-line information systems, and interactive teleconferences. In addition to creating sponsored educational materials, Media Management conducts market research, direct mail campaigns, special events, and contests for its clients. Its promotional literature does not emphasize in-school product promotion. Rather, its stated intent is to help organizations "develop, market and fulfill programs, products or services to the education market." We found its Straight Talk About School developed for GTE with cooperation from National Association of Secondary School Principals (NASSP) objective and of low-commercialism.

Media Options, Inc. Media Options, Inc. is a public relations firm based in Chicago. It has been producing educational materials for corporate clients since its founding in 1981 and has done educational kits on "fire safety, character, science, working students, and wellness" according to Jon Harris, Vice President. Its clients include "Fortune 500 companies and others." While Harris was reluctant to name any specific clients, he did say they were predominantly in the "restaurant and insurance industries." We reviewed four SEMs produced by Media Options, all but one of which we found to be minimally commercial; Choice, Chance and Control - That's Life, produced for the Insurance Education Foundation, Inc., was found to be incomplete and boosterish for the insurance industry.

Modern Talking Picture Service. An old-timer in the in-school marketing business (over 50 years), Modern develops, creates, and distributes sponsored educational materials to classrooms. The company also conducts product sampling as part of a market research program. Its promotional materials claim a distribution network of more than "14,000 teachers and over two million students," and the ability to finely segment any program to reach particular subsets of the student population --by age, sex, grade level, and subject area. Its stated goal is to build brand loyalty among young people and, by extension, their families. Modern builds its in-school distribution database by offering free video loans and teaching materials. We evaluated an SEM produced by Modern for Armor All Products and found it both commercial and flawed.

Sampling Corporation of America. Glenville, Illinois-based SCA specializes in distributing "goody bags" stuffed with product samples, money-off coupons, and educational pamphlets to school kids and their parents nationwide. According to Linda Mae Carlstone of Crain News Service, in 1994 SCA distributed 110 million samples to 76,000 schools. The president of SCA, Steve Kaplan, states that this type of marketing is successful because "there is an implied endorsement from a trusted institution. There's a lot of credibility attached to that." Major participants in SCA's programs include Procter & Gamble, General Mills, and Hershey.18

The sample bags include "how-to" information packets aimed at specific grade levels or age groups. For example, packets for teens are accompanied by literature about changes that age group faces, how to deal with conflict, and where troubled teens can go for support. Information for older students centers on job seeking and includes guides to resume writing and interviewing. These materials are developed by SCA, with contributions from outside specialists for certain topics. They are then given away at school events, such as open houses, kindergarten orientations, health classes and graduations. Schools receive no payment for allowing the packets to be distributed.

Scholastic Inc. Scholastic got its start in 1920 as a publisher of classroom magazines and today calls itself "the largest youth publishing company in the U.S." Through its Teen Network of magazines, Scholastic offers corporations the opportunity to directly target teen-agers with print advertising. Advertisers pay up to $33,000 to place a four-color, full-page ad in the five magazines in Scholastic's Teen Network. The company's promotional literature boasts of its ability to influence this marketplace: "Scholastic's exciting publication pipeline spans 87 percent of all schools...Your program can reach an audience of up to 23 million kids and teens...Readership of your advertising message is virtually guaranteed, because Scholastic magazines are welcomed, purchased, and used in the classroom --your most non-competitive environment-- by students and teachers."

In addition the company publishes books, textbooks, supplementary educational materials, software, and sponsored educational materials. The company started developing sponsored-educational materials largely at the urging of companies who were advertising in its magazines. Its first sponsored materials were magazine inserts --infomercials, single-sponsor magazines, and corporate-sponsored contest announcements which got bound into the magazines and sent free to schools. Today its sponsored programs include videos, software, print materials, and licensing of Scholastic book characters.

According to Rick K. Delano, Director of Scholastic's Education Marketing Group, the company recognizes the problems inherent in producing corporate sponsored educational materials and has established its own guidelines to make sure that any materials it produces are minimally commercial, educationally sound, and objective. We found this to be true of several but not all of the sponsored materials and programs developed by Scholastic that we reviewed. We found its least commercial effort to be its annual Arts & Writing contest sponsored by a long list of corporate entities; one of its most commercial efforts, a teaching packet developed for NK Lawn & Garden.

CHANNELS OF DISTRIBUTION

Most sponsored classroom materials are distributed free or made available at a nominal cost. Those that aren't are typically less expensive than comparable non-sponsored materials. Teachers often obtain materials directly from sponsoring organizations by responding to offers advertised in educational journals, at educational conferences, or by direct mail. Sometimes, teachers receive the materials unsolicited through the mail, or bound into or polybagged with their professional journals or with bulk shipments of classroom magazines.

Some schools have established procedures for reviewing sponsored materials and weeding out those that are biased and commercial, but many haven't. It is then up to individual teachers to decide if such materials are appropriate for the classroom and up to the standards set for other classroom materials. Leaving such evaluations up to teachers --many of whom haven't been alerted to the potential presence of commercial bias or trained to detect-- poses many problems which we address later in this report.

Sources

² Molnar, Alex. Giving Kids the Business: The Commercialization of American School Reforms. Westview Press (Boulder, CO), 1995: Pre-publication manuscript.

³ Stipp, Horst. "New Ways to Reach Children." American Demographics (August 1993): 50-56.

⁴ McNeal, James U. "Billions at Stake in Growing Kids Market." Discount Store News (February 7, 1994): 41.

⁵ McNeal, James U. "Attention All Shoppers: Consumerism and Kids." Youth Markets Alert (June 1994): N/A.

⁶ 1992 Teenage Research Unlimited poll. Daily News Record (September 6, 1993): N/A.

⁷ Same as #2.

⁸ McNeal, James U. Invitation to youth marketers to attend conference, "Kid Power: Creative Kid-Targeted Marketing Strategies," sponsored by Marketing Advisory Council (MAC) in Chicago, September 19-21, 1994.

⁹ Same as #2.

¹⁰ Same as #3.

¹¹ Same as #2.

¹² a. ($36.93) Addison-Wesley catalog, 1993: 8.
    b. ($10.95) Cottonwood Press catalog, 1994: 12.
    c. ($99) Prentice Hall catalog, 1993: 19.
    d. ($149) Beacon Films catalog, 1993-94: 49.

¹³ 1993-94 Estimates of School Statistics. State Departments of Education, Research Division, National Education Association (Washington, D.C.), 1994.

¹⁴ Robinson, Dr. Glen E. and Nancy Protheroe. "Local School Budget Profile Study." School Business Affairs (September 1993): 33.

¹⁵ Same as #14.

¹⁶ Myers, Steven Lee. "Supplies Cost $44 a Student, Badillo Finds." The New York Times (October 5, 1994): B1.

¹⁷ Moore, Thomas. "The Selling of Our Schools." U.S. News & World Report (November 6, 1989): 34-43.

¹⁸ Carlstone, Linda Mae. "A Lesson in Sample Arithmetic." Advertising Age (January 2, 1995): 22.

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