Channel hopping: How the kids' sector can take advantage of digital marketing

Robert Hutchins

By Robert Hutchins

August 16th 2017 at 4:51PM
UPDATED August 24th 2017 at 1:02PM
Channel hopping: How the kids' sector can take advantage of digital marketing

The transition from linear TV to digital is in effect and the kids' marketing space is evolving. Robert Hutchins explores.

Last month saw the online video streaming service Netflix hit a new record high, as it celebrated its 104 millionth subscriber.

The obvious assessment is that this is a lot of Netflix and chilling, and not just within the US. The overseas audience has now pipped the domestic, accounting for 4.14 million of its total of 5.2 million new users acquired in Q2 2017.

Spurred by the results, the VOD platform has now pledged $6.6bn to making and acquiring TV shows and films this year, with a bill of $15.7bn committed over the next five years. 

It’s a worrying premise to some of the platform’s closest rivals; namely Amazon and Hulu, as well as its linear TV competitors, and cements the vision that digital is here to stay.

Likewise, the BBC made its own – albeit far more modest – commitment to the space, offering a £34m injection into its digital kids’ services under the promise of delivering more original British made content, as well as greater investment in its online kids’ offering.

It may not arrive with the swagger of its US competition, but the statement remains: the focus for children’s content consumption is making the shift to online. 

“The kids’ sector is in the process of making a structural shift towards digital, with budgets growing at 30 to 50 per cent year-on-year,” Dylan Collins, CEO of the digital kids’ marketing platform, SuperAwesome (left), tells ToyNews.

“However, the sector is still years behind the mainstream media market, where digital spending exceeded TV last year for the first time.”

To quantify, take a look at Netflix’s content output over the last year. Its adult-focused original content – the likes of Stranger Things, House of Cards and The Crown – far outstrips its kids' offering.

It’s one reason why children’s brands have been far more tentative towards ploughing their marketing spend into the digital realm, TV has always taken president. But is the tide turning and are the sharks circling the likes of YouTube, Amazon and even Netflix, closer than ever?

"In five years time, over 50 percent of kids’ marketing activities will be digital,” continues Collins. “That’s a huge step-change from today, but it’s absolutely happening. Companies across the ecosystem will have to rapidly retool and rethink how they engage with kids.”

Often billed as vanguards in the independent online children’s space, SuperAwesome offers a platform that allows brands to reach an audience of half a billion youngsters each month. And, having developed many of the most commonly used tools in the kids’ digital media ecosystem (including PopJam), it's reasonable that SuperAwesome is at the forefront of that movement.

So, is TV dead? 

At a time in which children’s app-gaming is on the rise, YouTube dominates the short-form, free video space and animated gifs are as much a toy as a Nerf Blaster, has TV’s role in the kids' marketing space become obsolete?

Absolutely not, say analysts – but what other choice than to keep up with the obvious trend does the toy industry have?

“Toy companies have been relatively and correctly conservative in their media investment online, primarily due to two reasons,” Generation Media’s CEO, Dean Weller (right) tells ToyNews. 

“TV advertising is fairly costed in the UK and Ireland and highly measurable, whereas online advertising is still unmeasurable to the degree the industry would like, and is dominated by Google and Facebook.”

In January, Google’s Americas president, Margo Georgiadis made the move to Mattel, taking up the mantle of CEO at the global toy company. Since her appointment, Georgiadis has made no secret of her plans to help the faltering company return to strength through a restructured approach to digital.

In five years time, over 50 per cent of all kids' marketing will be digital.

Dylan Collins, SuperAwesome

Meanwhile, Spin Master acquired the app-maker Toca Boca in April last year, while Hasbro’s cosying to the video and app-gaming market has been duly noted.

None are examples of conservative moves from the world’s largest toy and children’s entertainment companies.

“From the level of mergers and acquisitions and other activity which is going on in the toy market, it’s clear that the major toy companies are thinking very seriously about this,” argues Collins.

But despite the odds, linear TV is still holding up and Generation Media’s Weller insists it remains the most powerful medium for the under six audience. Much higher than this threshold and the power of digital creeps in.

“Above the age of six, the most powerful combination is linear TV advertising blended with online activity, whether that is VOD, social or display. It is simplistic but true to say that the older the child, the need to increment the budget to the online space becomes de rigeur,” says Weller.

While the idea of children’s TV viewing figures giving way to online is arguable, the level of investment in children’s programming isn’t. If it wants to maintain its position for children across the age and gender spectra, it needs to stay in the game.

“We need a strong CITV, Turner, Viacom, Sky and Sony to continue to invest in new and exciting programming content to keep our target market involved, at all ages,” explains Weller.

“Worryingly, apart from the BBC, we are seeing a reduced investment in quality children’s content. As an agency, we are continually applying pressure on the commercial broadcasters to do their bit and produce and place shows with commercially viable and tradeable TV audiences. They need to try harder.”

Where TV falters, YouTube, Facebook and the like, are ready to pounce.

“Traditionally, if your brand is anything to do with toys, stories or characters, and if your target audience is children – your most effective form of marketing would be TV content,” says Gary Pope, co-founder of Kids Industries.

“But with the success of the Kids iPlayer and the expected further investment into digital platforms by the BBC, this may not be enough going forwards. There’s only one direction of travel for TV advertising and it’s not a traditional 30 second slot. And the likes of Google, Facebook and YouTube are all waiting for their moment.”

So, what’s the underlying message? Simple. The toy industry needs to prepare for the inevitable future and the legislation that the new frontier will meet.

But what are these?

In the US, under-13 digital engagement is regulated by COPPA. GDPR heads Europe.

“Brands in Europe have been able to use regular ad networks or game sites to engage with kids,” explains Collins. “That’s all changing. Your digital team will be experts in compliance too, otherwise you’re going to get fined. Heavily.”

Elsewhere, with kids having access to an almost infinite amount of digital content, more focus will be put on creating  communities to engage them. Of course, this will be around the clock, keeping kids engaged with brands outside of product releases.

“Kids are still kids and like to play, but the definition of play in digital terms means giving them creation tools to allow them to express,” continues Collins.

It’s a different future to the one the toy industry is attuned to, but it doesn’t have to be a daunting one, insists Collins, whose SuperAwesome platform is ready to assist firms eyeing the transition.

We need broadcasters to invest in exciting TV for kids in order to keep the medium buoyant.

Dean Weller, Generation Media

“SuperAwesome was founded specifically to ensure that 100 per cent kid-safe technology is available to all companies operating in the under-13 market.”

As for the future for children’s marketing, it's surely one of opportunity for the toy market. But it’s going to take work, particularly with so many unknowns surrounding Brexit.

 “The passion I feel for being involved with great children’s marketing tells me to be optimistic as the digital online world releases opportunities not yet considered,” says Generation Media’s Weller.

“But we must be prepared, alongside our media partners, to defend our right to market ‘our product’ to children on TV, cinema, out of home, in print and online in the face of possible future negative legislation that might hamstring us and of course, whatever comes out of post-Brexit Britain,” he concludes.