Networks targeting kids and teens have been whacked in recent years by a slowdown in advertising from core categories such as toys and certain types of food. That’s now prompting many of those cable outlets to aggressively chase after brands not typically associated with the prepubescent crowd.
Commercials for cars, full-service restaurants and travel destinations are popping up on Cartoon Network, Toon Disney and other kids networks. Nickelodeon, for example, signed Chevrolet to a multimillion-dollar deal last spring. The network has also lined up sponsors like automaker Kia alongside more-traditional advertisers—such as General Mills, Hasbro and Burger King—for its 19th Annual Kids’ Choice Awards April 1.
Media buyers expect to see more such adult-targeted advertisers in this year’s kids upfront, the annual ad market soon to get under way. Merrill Lynch analyst Jessica Reif Cohen last year estimated that the kids upfront generates about $970 million in ad revenue; other media buyers say the actual amount is closer to $800 million.
“Kids are having much more influence on higher-priced items that the family decides on, whether it’s where to go on vacation, buying cars or where to go eat,” explains Dan Kopec, media director at Starcom USA. “The influence of kids on family purchases is what the vendors see as a stopgap measure for losing revenue.”
Hassles over ads aimed at kids could make children’s TV a tough business. Ad spending on kids programming on broadcast and cable networks amounted to just under $2.1 billion in 2005, up 7% from the year before. But in the the important fourth quarter of 2004, kids advertising was off 1.3%, according to Nielsen Monitor Plus.
The key for networks to attract previously adult-only advertisers is twofold: the influence kids have but also “co-viewing,” a term the cable industry uses to refer to children’s watching TV the old-fashioned way: with their parents. Advertisers sell to both.
Several recent research reports have highlighted the influence of children, including an upcoming study from Disney ABC Kids Networks Group.
In the study, conducted by Strottman International with mothers and their children age 6-14, Disney found that 92% of kids are influential in purchases made at discount stores, while more than 80% influence purchases at specialty stores, malls, and grocery and drug stores.
Disney also found that 38% of mothers say their children are influential in deciding on vacations; 33% say the same about computers; 32%, cellphones; 30%, large electronics; and 28% say kids are influential in purchasing automobiles.
Nickelodeon has conducted similar studies and found in 2004, for instance, that nearly 90% of parents ask for their children’s opinions when purchasing products for the kids. But two-thirds also ask for input on family purchases, and one-third ask for their kids’ opinions when buying products for themselves.
Jim Perry, senior VP of Nickelodeon Integrated Advertising Sales, says the influence of kids on family purchases has led to new ad categories on the network.
“It’s more than a kids’ market to us, it’s a family market, and it’s a parents’ market as well,” says Perry, noting that Nickelodeon has had seven auto advertisers on the air; travel advertisers, such as Holiday Inn, Embassy Suites and Best Western; the Cayman Islands and the Bahamas; and a growing number of technology brands, including Microsoft, Dell, Epson and HP. “We are doing business with these categories because of family co-viewing and the kids’ influence,” Perry says.
Kim McQuilken, executive VP of Cartoon Network ad sales and marketing, agrees that these unexpected advertisers are coming into the market because of kids’ influence on purchases.
“Children have their own discretionary income, but they also have a significant impact on parental spending and grandparent spending,” he says. “We have had automotive migrate to us over the past three years. We also now have a broader base of restaurants because of kids’ influence. And kids also influence their parents on the type of computer to buy.”
Still, the influence of kids alone probably wouldn’t be enough to prompt many of these advertisers to buy time on young-skewing networks if it weren’t also for co-viewing, says Tricia Wilber, senior VP of advertising sales and promotions at Disney ABC Cable Networks Group.
“We have always heard and known that kids influence parents in terms of purchases, particularly for products you would expect kids to have an influence over,” she says. “But when moms watch TV with their kids, they have a conversation about it. That means that advertising is resonating not only with the child but also with the mom.”
Wilber notes that 28% of kids 2-11 who watch Toon Disney do so alongside an adult 18-49 years old. The co-viewing is higher—34%—on Jetix, Toon Disney’s prime time block. And on Disney Channel, which does not accept advertising but does accept sponsors with a positive social message, there are more women 18-49 with kids 6-11 watching movies in prime time than women watching such networks as Lifetime, says Wilber.
Family-focused networks are touting co-viewing and the influence that kids have on purchases just as advertising growth has slowed.
Toy subcategories like cars and dolls posted declines as toy makers struggle to rebound from years of slumping sales. Moreover, movie advertising was down 1.3%, perhaps because the number of G- and PG-rated movies has been trending down. Only about 3% of movies released in 2003, for example, were rated G, compared with an average 7% from 1968 through 2002, according to the International Motion Picture Almanac.
And some food subcategories, including cookies and candy bars, posted dramatic declines, as food companies altered creative messages to focus on healthier products in light of increased awareness of childhood obesity and more-strident calls for tougher regulations.
As a result, the need for new ad categories has become more pronounced.
The networks and media buyers are now gearing up for the kids upfront, and the outlook is for a modest increase in demand from core ad categories, according to media buyers.
“Last year, it was much softer than the year before,” says Starcom’s Kopec. “This year, we’re still collecting our intelligence, but we don’t have any indication that it won’t be soft again.”
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