Article: Kids Market Buoyed by Non-Traditional Categories Upfront Chronicles Part 9

By Jack Myers

Turner, Nick & Disney Bullish on Kids' Upfront Market
With spending power of $78.5 billion annually, kids are an increasingly vital economic force. A growing number of non-traditional advertisers are moving into kids television not only to reach them but to reach their parents in a relevant environment. According to Yankelovich Youth Monitor, 72 percent of kids say commercials influence their purchase decisions and a growing majority of adults admit they are significantly impacted by their children's requests and recommendations.

Until earlier this decade, the "Kids Upfront" market would typically move in February in conjunction with the Toy Market and would offer a telltale sign of what might happen in the general market. But, agree senior executives of Turner Entertainment, Nickelodeon and Disney /ABC Cable Network Group, the kids network television advertising business has changed dramatically and is now moving closer to the traditional Upfront season. In separate interviews Jack Myers Report spoke to David Levy, president of Turner Sports and Entertainment Sales & Marketing; Cyma Zarghami, President of Nickelodeon Television; Jim Perry, SVP Nickelodeon Ad Sales; and Tricia Wilber, SVP Ad Sales & Promotions for Disney/ABC Cable Networks Group.
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Wilber points out "the kids' business is different in two primary ways. First there is a smaller number of players so the competitive environment is different. At the same time, the market — the number of traditional kids advertisers — is smaller. We don't have the depth and breadth of kids advertisers we had in the past."

Credit: Nickelodeon

Levy comments, "products are now marketed to four age groups: birth to three, three to five, six to eleven and eight to fifteen. Manufacturers market products to these age groups and we're programming to them but they still buy media targeted to two age groups, two to six year olds and six to eleven. The growth of hand held gaming, computer gaming and electronic products for kids has resulted in greater market segmentation."

But, says Zarghami, "the kids' market is attracting several new categories. Non-traditional accounts have started to reach out to kids. Their influence on household purchases is significant and marketers are responding." She adds "there are a number of packaged goods advertisers using kids TV as a way to reach moms who are watching TV with kids. More pre-school programming is interactive," she explains, "and we attract more moms in Nick Jr. than many prime time programs."

Credit: Cartoon Network

Perry claims Nickelodeon's business from traditional categories has been steady. "Growth of our toy business isn't aggressive but all the major toy companies are introducing electronics products. The automotive, food and entertainment business has been incredibly strong over the last 18 months. The automotive category has been growing," he claims, with Nickelodeon already scoring campaigns from Ford, Dodge, Toyota, Mitsubishi and Honda and about to announce a sixth automotive partner. "Food manufacturers are reformulating products and coming out with new product introductions, so they have to spend to support them," Perry explains.

Levy agrees food manufacturers may be changing product ingredients and launching new brands. "That's a more positive way to look at the impact of regulatory concerns," he suggests. Wilber confirms the food industry's messages are changing and dollars associated with the category are still strong. She also says "the entertainment business seems to have a good slate of theatrical and DVD releases coming out. Video games are strong." Levy adds "the studios are coming out with more kid friendly and animated movies. The launches and the aftermarket are exploding."

Perry claims travel is also a growth category, with clients like the Cayman Islands, Embassy Suites, and Best Western. (Nick is opening its first Nickelodeon Family Suites by Holiday Inn on Memorial Day Weekend.)

Credit: Cartoon Network

Levy confirms the growing importance of packaged goods, DVD and new studio releases, gaming advertisers, and non-traditional categories, suggesting a key to the growth of this year's kids market will be how big these new categories grow and how much these advertisers spread their campaigns beyond the traditional "hard eight" weeks prior to Christmas and the two weeks prior to Easter.

Zarghami points out "while the Upfront plays a big part in the business, because of integrated promotions, licensing and tie-ins, we are doing business 52-weeks a year. We have a fairly significant percentage of business already wrapped up." Levy agrees "there are new opportunities for marketers trying to extend reach and find new opportunities."

Credit: Nickelodeon

"Levy believes the kids Upfront market should "break" just two to four weeks prior to the traditional Upfront market, meaning there remains six to eight weeks before kids' networks get a clear picture of market demand. "Buyers are not yet showing their cards," says Levy. "When one buyer moves, the whole market will follow. The market moves when toy and gaming advertisers need to get money down for the hard ten weeks." Three agencies, Starcom, Mediacom, and Summit Media are the primary drivers of the traditional kids market, followed by Mindshare.

Zarghami believes the kids Upfront market could be wrapped up by mid-April and says "we expect the market to be up in total revenues in the high single digits. Overall kids' gross rating points are down two percent but demand will be up." "The market is still forming." Wilber confirms. "Budgets are still being formalized, although we see it as a strong marketplace. We will definitely see growth in costs-per-thousand and we're waiting to see where the market will end up."

Nickelodeon and Turner's Cartoon Network are the major players in the kids advertising marketplace. Disney Channel is not a fully commercialized network but Toon Disney is in close to 50 million homes and is becoming a stronger force. Kids WB, which is packaged with Cartoon Network, is the only broadcast network with a strong Monday to Saturday kids presence and ABC Saturday morning continues to attract sizeable audiences. Additional competitors in the kids market are Fox Box and Discovery Kids, but Nickelodeon and Turner are the dominant market forces.

"We look at Cartoon Network as being well positioned for this year's Upfront," says Levy. "Ratings are up year over year. Anytime you can show growth it is a great opportunity. We've had two new hit shows, and we're launching a pre-school block with two hours each weekday from 7 to 9 am. We have identified a great opportunity with Adult Swim from 11pm to 5 am. The demand will be there because ratings are up and supply is tighter."

Zarghami points to the continued leadership of Nickelodeon. We introduced 'Nick Toons' in the fourth quarter and it is already in 32 million households and on its way to 40 million. 'The N' digital network for teens was introduced last year and it's now in 42 million homes. We believe the combination of Noggin, Nick Jr. and the CBS Saturday morning programming is a powerful offering to reach pre-schoolers and moms. Our consumer products business is tremendous. Our sales and marketing groups are closely aligned with our programming groups and our multiple platform pitch has been significant."

Wilber claims the strength of the Disney/ABC kids platforms is the "ability to deliver targeted kids. If they're looking for targeted audiences we offer the most efficient ways to deliver them. We give marketers a place where they can get an incredible concentration of boys on Jetix, which has a 70 percent concentration of boys. Our Saturday morning offers the largest concentration of girls in the marketplace. Plus," she adds, "the uncluttered environment of Disney Channel is a place where marketers are breaking through and making emotional connections with kids."

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