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Marketing to Kids: Toy Sellers

Bonanza or Parental Danger Zone?

Dec 05, 2012

Gone are the days when kids raced to the toy sections of old-fashioned department stores to find
items for their holiday wish lists, or parked themselves in front of Saturday morning cartoons,
captivated by a barrage of television commercials for GI Joe action figures, Chatty Cathy dolls and
Easy Bake Ovens.

The Digital Age has changed those rituals. Glossy toy catalogs, TV commercials and eye-level in-store
displays for the four-feet-and-under crowd still exist, of course, but toy companies these days
increasingly use the Internet to connect with young consumers. Through kid-friendly online quizzes
and multimedia games for touch-screen phones and tablets, marketers are blurring the boundaries
between traditional advertising and childrens entertainment.

Some industry watchers say these marketing strategies represent added value for both the consumer
and the marketer: Kids exercise creativity and have fun, while companies reap the benefit of an
extremely effective tool for capturing the attention of the youth customer segment. Butstealth
advertising aimed at kids is also a source of mounting concern for parents and childrens advocates,
who say that children are not mature enough to know the difference between advertising and editorial
content. There are also worries that exposure to these ads which often appear on a childs personal
electronic device are much harder for parents to monitor and control.
Its obviously a huge concern, says Barbara Kahn, director of the Jay H. Baker Retailing Center at
Wharton. Kids cant differentiate between whats propaganda and whats not. And on the Internet,
the regulations havent caught up.

Perhaps the biggest difference between the Internet and television commercials is that the level of
involvement is much more intense and interactive, notes Kahn. TV is a passive medium, she says.
Kids get mesmerized by TV shows, but theyre not engaged. When they are on the Internet playing a
game, its much more involving. So the effect of the ads is probably greater. Another difference
between the Internet and television is the platform: Kids watch television on a bigger screen in an
open room. The Internet involves a smaller, personal screen so its more of a private experience.

While the Federal Communications Commission (FCC) regulates television advertising targeted at
children, there are no federal rules governing how advertising is offered to kids on the web. For now,
it is unchartered territory. The Internet is a new medium, notes Kahn. [Its not entirely clear] how
kids parse what they see and experience online.

Attuned to Technology
The typical American between the ages of 8 and 18 lives in a home equipped with no fewer than three
television sets, three radios, three video players, three portable digital media players such as iPods
or other MP3 devices two video game consoles and at least one personal computer, according to a
report published by The Future of Children, a research group run out of the Woodrow Wilson School
of Public and International Affairs at Princeton University and the Brookings Institution. Those
children spend more than seven and a half hours a day using a smart phone, computer, television or
other electronic device, reported a separate study from two years ago by the Kaiser Family
Cell phone ownership among young children is increasingly prevalent, too. Nearly six out of 10
parents of so-called tweeners children aged 8 to 12 have purchased cell phones for their kids,
according to a survey by the National Consumers League. Only 4% of those tweeners have basic
phones with no Internet or texting access. About half have mobile phones with texting capabilities,
another 20% have non-smartphones with texting and web access and 27% have smartphones.

This is a generation that is attuned to technology, says Ronald Hill, professor of marketing and
business law at Villanova University. This is a generation that believes technology should be
accessible at all times. They seek out marketing. They seek out apps and Twitter feeds that are related
to products and companies that interest them. They are energetically connected to companies that are
relevant to their lives.
Companies, for their part, are taking their cue by spending more money on Internet advertising and
designing ads that go beyond simply pushing products.A study released by Nielsen in October found
that Internet ad spending grew more than any other media in the first half of this year. (Advertising
on the Internet rose 7.2%, radio rose 6.6% and TV increased 3.1% to offset the 1.3% decline in
magazine spending.)

Advertising on the web requires a different strategy from other media, however. Instead of
advertising, the most innovative brands are taking content marketing strategies and applying them to
kids, according to Mark Bonchek, founder of Orbit + Co, a social media strategy company based
outside of Boston. In content marketing, the focus isnt on promotional deals and offers. Instead,
theres some kind of intrinsic value, and the advertising message is embedded within the content or
There are, for instance, immersive advergames video games made specifically to advertise a
product. There are also in-game ads and quizzes where product placements are embedded within a
game narrative. Many of these online marketing strategies revolve around a popular character or
group of characters, which enable toy companies to continually cross-reference and promote TV
shows, branded dolls, T-shirts, action figures and other products.

The Club is an online virtual world run by kid-centric television network Nickelodeon, where users
are invited to create avatars and play Super Spongy Square Games (overseen by Sponge Bob), browse
the Power Rangers Samurai store or join in Dora (the Explorers) Great Big World Game. Disney
offers an array of free apps for kids featuring The Muppets and Mickey Mouse. offers
video games that enable users to design virtual dresses for Barbie and her besties, watch cartoon
episodes of Barbie: Life in the Dreamhouse or play an assortment of princess charm school
games, which are, according to the perky disembodied electronic voice of the website, super glam
and royally fun!

Bonchek says that the most effective advertising approaches are those that establish a partnership
between brands and parents. They create virtual worlds that inspire kids imaginations and help
them get more enjoyment out of the products, but also help parents make better gift-buying
decisions. Its much better than when brands try to turn my children into a new mobile marketing
channel, he notes.

Food companies are especially skilled at content marketing. Kraft has many free kid-friendly apps,
including one that lets users watch a cube of Jell-O dance in time to their favorite songs, and another
in which kids create digital macaroni art a subtle promotion of its Kraft Macaroni and Cheese.
Kraft has long been a leader in content marketing with recipes for grown-ups, so its not surprising
that they have done well in finding innovative approaches to engage kids, says Bonchek.

Innovative, certainly, but do these advertising practice also prey on the innocence of kids? I dont
think any more than they prey on grown-ups, notes Bonchek. Does the 25-year-old guy really think
if he drinks a particular brand of beer that he is going to get that girl? The good news regarding
children, he adds, is that there are gatekeepers in the form of parents. They control the credit card.

Not Just Adults in Teeny Tiny Bodies

Parents may have ultimate control over what their children spend money on, but there
is no doubt that kids have a large say in those decisions. According to a consumer
tracking study conducted by The NPD Group in 2010, nearly half of the total dollars
parents spent on kids went to items specifically requested by them. A 2005 estimate by
James McNeal, professor emeritus of marketing at Texas A&M University, found that
children under 14 influenced as much as 47% of American household spending,
amounting to more than $700 billion that year.
As for 2012, it appears that the holiday shopping season is already off to a rollicking start. Despite the
shaky economy, Americans spent $11.2 billion at stores across the U.S. and a record $1.04 billion
online on Black Friday, according to ShopperTrak and ComScore, both retail and technology research
companies. The National Retail Federations holiday consumer spending survey projects that the
average holiday shopper will spend $749.51 on gifts, dcor, greeting cards and other items, a slight
increase from what they spent last year. The largest share of shoppers budgets this year will go
toward gifts for family members with much of that money going to presents for kids.

During the holiday season, childrens desires for new toys and games reaches a frantic, whiney pitch
familiar to all parents. Its obvious that kids bug their parents so much because it works really well,
says Stephen Hoch, professor of marketing at Wharton. Especially at Christmastime, parents want to
buy something that their kids would like to get.

Desperate children plus eager-to-please parents are a potent combination for toy marketers at
Christmas. There is a reason, after all, that this time of year sees a significant uptick in holiday-
themed advertisements meant to build up expectations around what packages might be arriving from
the North Pole. These ads have an especially powerful effect on kids who have difficulty
differentiating between editorial content and marketing, according to Hoch, a former Walt Disney
executive who used to run the companys childrens music division in the late 1970s. Kids are not as
savvy to the methods and motives of advertisers, he notes. Young kids are more gullible.

Online, even fully-fledged adults cant always tell the difference between marketing and editorial. We
have all accidentally clicked on a display ad that didnt look like a display ad, says Hoch. But as
adults, we set up defenses when we see the intention to persuade. Thats why its more difficult to
persuade an adult of something than it is a little kid. As kids get older, they wise up to this. But when
were talking about kids playing an online game or [being immersed in a] continuous stream of
content on a computer screen, its not clear how vigilant they are.

Research suggests it is unlikely that kids fully grasp the marketing processes at work behind many of
these online advertising strategies. Indeed, evidence points to the fact that until the age of eight, most
children are unable to understand persuasive intent the fundamental basis of marketing, which
makes kids especially vulnerable to an ads techniques.
Children deserve special consideration, according to Susan Linn, director of the Campaign for a
Commercial Free Childhood, a Boston-based advocacy group, and a psychiatry instructor at Harvard
Medical School. Children are not just adults in teeny tiny bodies, she says. They dont have the
same impulse control as adults, and they have a harder time separating reality from hype. Very young
children cant differentiate between a commercial and a program. And even older children are more
susceptible to persuasion.

While the Internet remains a largely unregulated domain, the U.S. regulates marketing for children
less than most other industrialized nations. Canada has very stringent regulations stating that
companies cant market to children on television who are under the age of 12. In Sweden and Norway,
companies cant market to children under the age of 13. In Greece, there are no television
advertisements allowed on until after 10 p.m., and no war-related toys, such as toy guns, are
advertised at all.

The Internet and other new technologies have made marketing to children more pervasive and even
more effective, Linn notes. She says that laws against false and deceptive marketing could be enforced
better and that marketing to kids on the web that is based on television and movie characters should
be limited. Advertising on the web is so much more insidious. For one, kids spend more time with
the ad. For another, with handheld devices, its so much harder for parents to control [what their
child sees and does] once that child has access to the Internet. Its really hard to have parental

Privacy is another area of concern. Online research applications allow marketers to piece together
richly detailed consumer profiles based on the aggregate data gathered from children a
demographic that is otherwise extraordinarily hard to access, according to a study by Sara Grimes, an
assistant professor of childrens literature and new media at the University of Toronto. Her study
appeared in the International Journal of Communications and Law Policy.
Still, its not certain whether regulations that govern Internet advertising aimed at kids are the
answer. Regulators are still finding their way, notes Jonah Berger, professor of marketing at
Wharton. Regulations often chase new technologies, but they often come with a substantial delay
[as] people figure out what the issues are and how best to protect children. Regulators have yet to get
used to this new environment.

At a time when nearly one in three children is overweight, makers of salty snacks and sugary drinks
are already under scrutiny for their advertising practices. Many food and beverage companies have
signed on to the Childrens Food and Beverage Advertising Initiative, part of the Better Business
Bureau, which encourages voluntary commitments to advertising healthier dietary choices and
healthy lifestyles. The Federal Trade Commission soon plans to publish a report describing the ways
in which food companies market their products to children.

For now, it is up to parents to monitor what their child sees and does online. We live in an age where
advertising is pervasive, says Bonchek, the social media strategist. Parents have a responsibility to
educate their children about marketing and advertising. We need to lean into it. You cant protect
them from everything.