I had an interesting question this week – asking why beer companies won’t advertise on radio stations with younger demographics.  Was it a law or just a marketing decision?  What I found is that it is a little of both.  While there are no laws specifically prohibiting the advertising of beer on radio stations with younger audiences, the Federal Trade Commission and Congress have been very concerned about all alcohol advertising, especially advertising that appears to encourage under-aged drinking. Thus, to avoid regulation, the Beer Institute has adopted voluntary standards that require its members to advertise only on radio stations which have an audience that is at least 70% comprised of those older than the legal drinking age. 

The FTC has periodically issued reports on advertising for alcoholic beverages, the last report having been issued in 2003.  Appendix D to that report contains the Beer Institute guidelines.  As set forth in those guidelines, the industry looks to audience demographics, by daypart, in deciding whether or not its members should buy time on a particular station.  If the Arbitron or similar ratings data shows 30% or more of a station’s audience in a given daypart is under 21, then there will be no advertising in that daypart on the station.

The FTC retains the power to regulate advertising that is false or deceptive, or otherwise constitutes an unfair trade practice.  In making decisions on what advertising constitutes an unfair trade practice, the FTC often looks to industry standards, such as those adopted by the Beer Institute.  For instance, in one case, the FTC entered into a Consent Decree with a beer advertiser who had ads that appeared to promote unsafe activities while drinking – also a violation of the Beer Institute guidelines, and the Commission cited those guidelines in determining that the ads constituted an unfair trade practice  Thus, while not adopted by the government, the guidelines practically have a significant deterrent effect on advertisers, and virtually have the force of law.

So, while there is no formal law or government rule adopting the standard that 70 per cent of a station’s audience must be 21 or above for the beer companies to be interested in buying ads on the station, practically, the self-regulation guidelines impose that limitation.  So don’t expect Britney and a beer ad to be running back to back on your favorite station anytime soon.