Kids’ ad market on right course

Despite tough economy, parents continue to buy

After two years marked by a difficult advertising economy and the retreat of food advertisers, kids’ TV marketers are finally optimistic about a comeback.

“There’s no doubt that, pre-recession, the kids’ business took a gut punch from governments around the world that were considering or enacting legislation that prevents advertisers from selling fast food or sugar-based products to kids. That caused marketers to sharply reduce, if not abandon, advertising to kids,” says Toper Taylor, president-CEO of Cookie Jar Entertainment, which programs kids’ TV blocks on the CBS-owned stations and affiliates, as well as on Sinclair Broadcast and digital broadcast network This TV.

“That gut punch was followed with a second gut punch, which was the recession and the smaller toy company and video distributors shrinking. What we are seeing as the economy turns around is that for the first time in three years, there’s new money coming into the marketplace.”

Particularly encouraging to kids’ marketers is the strong performance of the recent scatter market, with Hollywood movies, toy manufacturers, game creators and show and clothing makers all increasing their spending on kids’ TV.

“The scatter market in last year’s fourth quarter was the strongest we’ve seen in years,” says John O’Hara, g.m.-exec VP at Cartoon Network. “It all starts with the economy and I think consumer spending was strong in the third and fourth quarter. Parents don’t seem to cut back on toys and movies. Those two categories drove spending in the third and fourth quarter.”

Big Hollywood blockbusters, such as “Toy Story 3” or “How to Train Your Dragon,” have a broad effect on the tyke market. As the box office goes, so goes advertising, marketing and merchandising to kids.

“Kids’ movies are the one baro-meter you can look at to gauge the success of the kids’ marketplace. On the same day a movie comes out, usually a videogame and a toy comes out as well. If there’s a good fit, McDonald’s or Burger King could get into it, and there could be a shoe line or a clothing line. There’s all of this ancillary revenue involved,” says Dan Barnathan, president of ad sales for 4Kids Entertainment. “If these movies are not being released, it impacts the kid marketplace disproportionately.”

With so many the entrants in the kids TV fray — from market leader Nickelodeon with its four networks, to Disney’s multi-net reach (though Disney Channel is not ad-supported), boy-focused Cartoon Network, newcomer the Hub and the broadcast kids’ blocks — the pie is going to need to show some growth if everyone is going to flourish. And while the market may be on the right course, kids’ marketers have to remain extra-vigilant to stay on the right side of kidvid regulators.

“It’s harder to be profitable today as quickly as one used to be, but there’s enough business to sustain a channel like ours,” says Margaret Loesch, president-CEO of the Hub, the joint venture between Discovery and Hasbro. “We don’t have to be No. 1, but we can still be robust and make money while providing programming that kids want to see.”

More from Kids Upfronts
Kids programming more competitive than ever | Kids’ ad market on right course | The Hub learning as it goes

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