We are often told that corporate social responsibility and profitability are intertwined in the 21st century business model. Pledge to make the world a better place and expect those margins to swell in return, goes the modern axiom.
It can apply to the public sector, too. In the case of Transport for London (TfL) – the operator that runs the tube, as well as train and tram services in and around the capital – this set of principles is impacting upon its relationship with the advertising industry.
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In November, it was announced that adverts promoting junk food will be banned on TfL services, coming into effect in February 2019. The prohibition includes the advertising of sugary drinks, hamburgers, chocolate bars and salted nuts across the entire TfL network.
The order has come from London mayor Sadiq Khan, as part of City Hall’s attempt to bring down childhood obesity rates in the capital, which are believed to be some of the highest in Europe. While fast food chains are not automatically banned from advertising on the tube, they can only do so under the proviso that they spruik healthy products.
Quite understandably, the ban has been welcomed by Public Health England – not to mention various notable individuals within the fields of paediatrics, nutrition and gastronomy – as a vital measure in tackling a serious issue.
And if City Hall is to be believed, the ban is also widely supported by Londoners. Following a public consultation launched in May, over 82% of respondents to the Mayor’s Talk London Platform, which allows people to have their say on prevalent issues affecting the capital, gave their support to the proposals.
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By GlobalData“Obesity is the greatest medical problem facing the country and TfL is quite right to put the health of its passengers above its narrow commercial interests,” says Christian Wolmar, a rail expert and author. “That is why it is important that TfL is a publicly-owned organisation with a wider remit than merely a focus on the profit and loss in its accounts.”
Can TfL afford to turn down advertisers?
Try telling that to the wider advertising industry, whose response to the new measure has been one of incredulity. According to Outsmart, a trade body which represents outdoor advertising firms, TfL could be set to lose out on a revenue stream of around £27m a year; City Hall, meanwhile has the figure much lower at £13m.
Given a huge percentage of its annual income comes from advertising (£140m according to the latest figures), Outsmart argues TfL is at risk of shooting itself in the foot – particularly as the operator struggles to balance the books. As revealed in its annual accounts earlier this year, TfL’s total deficit stands at almost £900m, with government cuts and delays to the opening of Crossrail responsible for squeezing finances.
“The historical relationship between the advertising industry and TfL has always been a strong one,” says Tim Lumb, Outsmart’s insight and effectiveness director. “The revenues from advertising contribute to investments in TfL, from renewing bus shelters to the the provision of free WiFi and helping to maintain the fare price freeze.”
Will banning posters be enough?
Indeed, TfL’s market share of the outdoor advertising space within London is around 40%. As Lumb points out, much of the revenue made from this is channelled into maintaining and modernising its transport. Outsmart’s central gripe, though, is that the ban will be effectively useless in tackling obesity rates in the capital.
“The proportion of TfL users who are aged under 16 is estimated to be around 3%,” says Lumb. “All the research shows that advertising bans in isolation are ineffective. Plus unhealthy food is still sold in shops across the TfL estate and it is still advertised in free papers like The Metro and Evening Standard. We are not advocating for further advertising restrictions in any medium – but it shows that only focusing on posters is daft.”
Lumb also takes issue with the following clause contained within the policy published by City Hall in November: “Incidental images, graphical representations and references to food and/or non-alcoholic drinks that promote the consumption of foods high in fat, sugar and salt will not be permitted”.
“This means, for example, an advert for a credit card, using creative that features people eating pizza and ice cream in a restaurant, could be subject to the ban,” he says. “Depending how TfL applies the ‘incidental’ rule, the £27m might actually be low.”
City Hall, says Lumb, are also “ignoring the body of scientific research that shows nutritional education and the provision of physical activities are far more effective in reducing childhood obesity. The ban will be ineffective”.
Why advertisers may need to suck it up and adapt
It is unlikely the mayor’s office will be moved by such remonstrations. Outsmart’s own consultation proposals, focussing on using advertising to instead drive education around obesity and promote activities in the community, “have fallen on deaf ears”.
There is, nonetheless, some evidence to suggest that financial dire straits and banning certain advertisers on the grounds of ethics are not mutually inclusive. Last year, TfL actually reported a 20% increase in annual advertising revenue, which also coincided with the operator revising its advertising policy to implement a ban on adverts promoting unhealthy and unrealistic body images.
Neither is London alone in its crackdown on what it deems to be unhealthy advertising, with Amsterdam also implementing a ban on junk food ads on its metro system in January.
Public transport services – particularly in a city as large and diverse as London – might indeed be seen as the hallowed ground for outdoor advertisers, but the latter may need to change tack if they are to be allowed to continue to promote their wares.
